HC asks MHADA if MahaRERA can help in choosing developers for stalled cessed buildings

Mumbai: The Bombay high court recently sought to know from the Maharashtra Housing and Area Development Authority (MHADA) whether the Maharashtra Real Estate Regulatory Authority (MahaRERA) could be roped in to identify and appoint private developers for completing stalled redevelopment of cessed buildings due to default on the part of the developers

Mumbai: The Bombay high court recently sought to know from the Maharashtra Housing and Area Development Authority (MHADA) whether the Maharashtra Real Estate Regulatory Authority (MahaRERA) could be roped in to identify and appoint private developers for completing stalled redevelopment of cessed buildings due to default on the part of the developers.

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The court noted that an informed decision needed to be taken by the MHADA and the societies to ensure that persons and housing societies in cessed buildings who entered into agreements with developers, who defaulted on their commitments, are safeguarded.

The division bench of justice Gautam Patel and justice Neela Gokhale had suo motu taken up the issue while hearing a petition filed by a housing society which sought directions to the MHADA to take over the redevelopment projects abandoned after being partly constructed. The court was informed that there were many such cessed buildings, construction of which had been stalled, as the developer abandoned the project and the flat owners were left without transit rent or without a roof over their heads.

In light of many such projects languishing, the HC had directed the MHADA and the Brihanmumbai Municipal Corporation (BMC) to respond.

Advocates PG Lad and Sayli Apte representing the MHADA informed the bench that an amendment was done in the MHADA Act which permitted the authority to undertake construction and redevelopment which was contrary to its previous responsibility of merely repairing the cessed buildings.

The HC was informed that the amendment received the Presidential assent in December 2022 and the state government had notified the same through a gazette.

With a view to ensure that future projects do not face the same fate as the petition before it, the bench sought to provide assistance to the society and for the MHADA which the bench broadly called pipeline cases. “The dilemma before the society and MHADA is not just about the structural audit and engineering technicalities, but about now making a proper, informed choice of a developer.”

The bench then asked the state government whether an authority such as the MahaRERA could identify, classify or rate developers according to such measures or metrics that it deems appropriate. The bench said this would be to the benefit of the society and the MHADA, and would minimise the risk to a considerable extent in project completion. “With a developer database accessible, both the society and the MHADA would be able to make a better-informed decision about the choice of developer.”

The bench then clarified that it was not issuing any directions or orders to MahaRERA but just wanted to know whether there exists a database of developers, whether MahaRERA has a rating system and if not, whether MahaRERA was willing to consider developing one.

“We have outlined one particular advantage to having such a system. There may be other benefits. Equally, there may be issues or pitfalls that we have not foreseen or considered. We, therefore, approach MahaRERA not just as a statutory authority, but as a body with specialised knowledge, expertise and data, seeking its assistance,” the bench observed and posted the hearing of the matter to March 3.