Mumbai: MahaRERA Tribunal Sends 3 Developers to 3-Month Jail for Not Paying Interest on Delayed Possession
Mumbai: MahaRERA Tribunal Sends 3 Developers to 3-Month Jail for Not Paying Interest on Delayed Possession
The Maharashtra Real Estate Appellate (MahaRERA) Tribunal has sentenced the three promoters of Neptune Ventures and Developers to three months of civil imprisonment for not complying with its 2021 orders to pay interest for delayed possession to Lower Parel resident Atul Prabhu regarding their Bhandup project.
According to the orders, the developers were instructed to pay nearly Rs 5 lakh in interest to Prabhu from July 1, 2017, until possession was granted, in accordance with Rule 18 of the Maharashtra Real Estate (Regulation and Development) Act. The tribunal also noted that Rs 4,32,697, which the promoter had adjusted as rent, could not be considered valid compensation under the Maharashtra Ownership Flats Act (MOFA) or RERA. In this case, the allottees had initially paid Rs 51,000 in 2009, and the project received a commencement certificate (CC) in 2013. After making additional payments, the final sale agreement was executed in September 2013, which promised possession by December 2016 with a six-month grace period. However, possession was not delivered by June 2017, and the promoters could not provide a valid justification for the delay.
The promoters attributed the delay to factors like securing permissions from authorities, financial difficulties, and modifications in the Development Control and Promotion Regulations (DCPR). However, the court pointed out that these justifications were inadequately supported and lacked evidence. Additionally, the court remarked that the changes in the DCPR were prospective and should not have affected the initial completion timeline.
The regulatory tribunal dismissed the developer’s assertion that possession was offered in October 2018, considering it unfounded and lacking evidence. In contrast, the allottees demonstrated that possession was never actually provided, and the promoters only backdated a possession letter in November 2018, which was ruled as fraudulent. Advocate Nilesh Gala pointed out that, despite the tribunal’s order, the collector (Mumbai suburban) has not submitted a compliance report concerning the attachment of movable and immovable properties.
The tribunal noted that a new attachment warrant was issued on September 27, 2024, instructing the collector to attach the properties and provide a compliance report. However, the collector did not submit any report despite these clear directives, leading the tribunal to request an explanation from the collector for the inaction.
