Maharashtra Real Estate Appellate Tribunal (MahaREAT) Sheds Light On Interest For Delayed Possession Of Flat In The Absence Of Registered Sale Agreement

Posted On - 27 July, 2022 • By - Shilpi Pandey

MahaREAT, in the case of Jervis Anthony Creado & Anr. v. Aishwarya Light Construction Company[1], passed an Order on June 17th 2022 which has shed light on the payment of interest on the amount paid to the promoter in case of delay in possession wherein the parties have not signed a registered agreement for sale.

In February 2017, potential homebuyers had signed an unregistered agreement for sale to purchase a flat in the project ‘Aishwarya Heights’ from the respondent. The terms and conditions of the said agreement stated that the respondent would deliver possession of the flat by December 2017.

However, the respondent failed to hand over possession of the flat and to register the agreement for sale, which forced the appellants to file a complaint with Maharashtra Real Estate Regulatory Authority (MahaRERA). However, MahaRERA denied the appellants’ request for interest/compensation under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA) for the delay in possession, citing the fact that the agreement for sale had not been registered.

The appellants challenged the order of MahaRERA and filed an appeal in MahaREAT.

The Tribunal observed that the respondent had committed to providing the appellants with possession of the flat by December 2017 in accordance with an unregistered agreement for sale. In the absence of a formal agreement signed by the parties, any other documents specifying the date of possession, such as an allocation letter, a brochure, a pamphlet, email communications, etc., may be taken into consideration for the purpose of calculating a delay in possession.

The Tribunal relied on the unregistered agreement for sale signed by one of the partners of the respondent which specified that the respondent would hand over possession of the flat by December 2017. Section 18 of the RERA gives an option to the allottees to either continue with the project while claiming interest on the delayed period of possession or to withdraw from the project and get a full refund of the sum paid along with interest including compensation if the promoter fails to hand over possession on or before the due date.

After examining various facts and arguments from both parties of the case, the Tribunal, in 2022, concluded that Section 18 of the RERA does not mention the term “registered” therefore, relief of interest for delayed possession cannot be denied merely because there is no registered agreement for sale between the promoter and homebuyer. As a result, the promoter/respondent was ordered to pay interest for the delay in possession from January 2018 until the actual date of possession.

[1] Appeal (VC). No. AT-006-52415 (2022)