Buyer challenges MahaRERA circular allowing 6-month extension to developers

A flat buyer has filed a petition in the Bombay high court (HC), challenging the May 18 order of the Maharashtra Real Estate Regulation Authority (MahaRERA), in

A flat buyer has filed a petition in the Bombay high court (HC), challenging the May 18 order of the Maharashtra Real Estate Regulation Authority (MahaRERA), in which it had extended the validity of all registered projects by six months, whose completion, revised completion or extended completion dates expired on or after March 15. The petitioner has claimed that MahaRERA’s decision favoured certain defaulting promoters at the cost of thousands of flat purchasers. The court will hear the petition on Tuesday.

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The petitioner, Sagar Sarjerao Nikam, had purchased a flat on January 12, 2017, for which he had paid around 95 % of the total amount to the promoter. In his petition, filed through advocates Manish and Nilesh Gala, Nikam has stated that the promoter had promised to deliver the possession by December 2017, but failed to do so as an occupancy certificate (OC) for the flat was rejected owing to a default. The petitioner and his family have been staying on leave-and-license basis, paying rent, owing to which he has been suffering financial difficulties.

Nikam’s petition has further stated that on April 2 this year, MahaRERA had extended the registration validity of projects by three months. The authority further extended the validity by three more months on May 18 by invoking the ‘force majeure’ (unprecedented event) clause, stating that the Covid-19 outbreak is a calamity which is adversely affecting the regular development of real estate projects.

The petition further added that MahaRERA’s order has also exempted errant developers from paying compensation in case of failure to deliver the property under the law, even for those cases that had lapsed before March 15. The plea said that the decision was taken arbitrarily and would lead to hardships and losses to allottees, who have invested in real estate projects and have been waiting for years together to get possession.

Nikam has claimed that the decision illegally granted extensions and relaxations to errant promoters, depriving purchasers of their statutory rights of being heard. In view of this, the plea has sought direction from the court to declare MahaRERA’s decision to invoke force majeure and to treat it as a ‘moratorium period’ to calculate the interest under RERA law, as illegal and be quashed. The plea has also submitted that the decision was completely arbitrary and violative of the mandate of the RERA law.

As the bench led by chief justice Dipankar Datta could not hear the case owing to paucity of time on Friday, the petition will now be heard on Tuesday.