Tribunal restores residential status of Mahalaxmi project

Justices SS Shinde and Shrikant M Deshpande ruled that the MahaRERA approval to change the promoter and alter the project, earlier known as Orchid Turf View, was “bad in law” and granted “without appreciating and verifying the facts…”

Mumbai: The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has ordered Valor Estate (formerly DB Realty) and the Prestige Group to restore the status of their luxury high-rise project in Mahalaxmi from residential-cum-commercial to residential, to honour commitments made to homebuyers nearly two decades ago.

Tribunal restores residential status of Mahalaxmi project

In a judgment delivered on August 25, justices SS Shinde and Shrikant M Deshpande ruled that the Maharashtra Real Estate Regulatory Authority’s (MahaRERA) approval to change the promoter and alter the project, earlier known as Orchid Turf View, was “bad in law” and granted “without appreciating and verifying the facts…”.

The dispute dates back nearly two decades. The petitioners—Aditya Bagree, Chand Bagree, Kesari Realty and Kuber Mall Management—had purchased flats in the proposed Orchid Turf View residential project in Mahalaxmi in 2007 and paid approximately 50% of the total consideration. However, they claimed that the agreements for sale were never executed, the project remained incomplete, and they never received possession.

The promoters later allegedly attempted to terminate the allotment agreements and transfer development rights to Turf Estate Joint Venture LLP, a subsidiary of the Prestige Group, without the allottees’ consent. They also sought to alter the project’s character from residential to residential-cum-commercial, the petitioners said.

The tribunal also found the claim misleading. According to the MahaREAT judgment, the promoters “had cancelled their allotments and already taken refund and relinquished their rights...much prior to the promoter making application for change of promoter…”

MahaREAT held that the promoters misrepresented facts to MahaRERA and violated statutory requirements. Furthermore, an application for deregistration submitted by the new promoter was approved by MahaRERA despite the presence of dissenting allottees, a decision the tribunal ruled unlawful and detrimental to the allottees’ rights.

In their petition, the appellants had filed complaints highlighting numerous violations by the promoters, including failure to register agreements for sale, non-compliance with project status updates, unauthorised plan alterations and unearned termination of allotments. MahaREAT found these violations to be intentional and oppressive, citing precedents on unfair contractual terms and emphasising that such unilateral termination clauses are unconscionable.

In its order, MahaREAT set aside MahaRERA’s approval of the change in promoter and restored the project’s original residential status. The tribunal directed the developers to list the appellants as allottees on the MahaRERA website. The developers were also ordered to execute and register the sale agreements within a month and to pay a penalty equal to 2% of the project cost.