MahaRera directs builder to refund cash component over delay in possession to buyer

Maharashtra Real Estate and Regulatory Authority (RERA) recently directed a builder to repay with interest Rs 25 lakh including a cash amount of about Rs 4.5 lakh paid four years ago by a buyer of a flat in Virar who now wants to cancel his booking as the possession was delayed by four years. The order underscores the importance of keeping copies of every document, including uncashed cheques, while buying property.
For, Pradeep Bedre, a person who had booked a flat in ‘Shree Shakun Greens’ it was a photocopy of a cheque that partly helped him before RERA when he knocked at its door for a refund.

Faced with a dispute regarding the cash payment, with the builder, M/s Shree Shakun Realty Pvt Ltd denying cash payment, MahaRera member and adjudicating officer B D Kapadnis, relied on photocopies of cheques, given for the same amount which were meant to be shred once cash was received.

Kapadnis also relied on Bedre’s and his wife’s statements to accept that he had paid over Rs 4 lakh in 2014 in cash. The buyer said that the builder had “insisted on the cash amount before entering into agreement for sale.” The builder had taken an undertaking from the buyer and also two cheques for the amount promising to destroy both when cash was received, the buyer contended. The Rera member held that the buyer was entitled to recover payment he had made with 10.05 per cent simple interest from March 2015 and also Rs 20,000 as cost. The order observed that the buyer’s contention of having paid cash was “corroborated’’ by documentary evidence of photocopy of uncashed cheques and his bank statement which showed withdrawals of over Rs 3 lakh during the relevant time.

The buyer had moved for refund and compensation as he wished to withdraw from the project since he said that the builder failed to deliver possession on or before December 2014 as agreed while booking. The Builder said that Bedre had booked the flat under a tripartite agreement in a 20:80 scheme. The builder said that he had paid interest on loan till February 2015 to Bedre.

The RERA law provides for refund with 2 percent more interest than the highest marginal cost of lending rate in SBI.

Kapadnis did not accept the builder’s case that completion was not possible for “reasons beyond their control’’ but added even if there was a delay, the law provided for six month extension under Maharashtra Ownership of Flats Act which is still in existence and the builder could have applied for extension of time, under RERA.

The Rera Member said that grounds of delay given by the builder, could be treated as mitigating factors to refuse buyer’s claim for compensation.

The builder had said that with green clearance delayed as the environment department did not permit operation of sewage treatment plant. The builder said that though applied for, an occupancy certificate was awaited since the Vasai Virar Municipal Corporation did not have proper infrastructure to grant a required NOC for a ‘high rise’. The Builder said only about Rs 21 lakh was received from Bedre through a bank loan which he had taken and not the cash amount he claimed. The authority
 The buyer however pointed out that the environmental clearance was issued in July 2010 for the project and valid for five years, yet the builder had not completed the project in time. Kapadnis in his order said, “I find no reason to disagree with the complainant.
 The Rera Member in his February 2018 order observed that “VVMC which approved the plans for the high rise building ought to have set up proper infrastructure…’’ But added that the state Urban Development Department had in January 2017 issued directives requiring corporations and councils to “provide services regarding OC within 8 days from receiving applications.’’

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