Case Note & Summary
The case involves two appeals filed by M/s. Pragatej Builders And Developers Pvt. Ltd. (the promoter) against a common judgment and order dated 7 February 2023 passed by the MahaRERA Tribunal. The Tribunal had partly allowed appeals filed by the flat purchasers (Mr. Abhishek Anuj Sukhadia and Mrs. Chaya Anuj Sukhadia) and the promoter, directing the promoter to pay interest to the flat purchasers from 1 July 2016 (the date stipulated in the agreement for sale for handing over possession) instead of 1 January 2020 (as claimed by the promoter). The promoter was also aggrieved by the rejection of its prayer for exclusion of the COVID-19 pandemic period from interest liability. The High Court held that the promoter is liable to pay interest from the date of default as per the agreement, i.e., 1 July 2016, and not from the extended date claimed by the promoter. However, the court also held that the promoter is entitled to exclusion of the COVID-19 pandemic period from interest liability, as the pandemic constituted a force majeure event beyond the promoter's control. The court modified the Tribunal's order accordingly, directing that interest be calculated from 1 July 2016 but excluding the period from 25 March 2020 to 27 July 2021 and from 27 July 2021 to 30 September 2021.
Headnote
A) Real Estate Law - Interest on Delayed Possession - Date of Default - Under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA) read with agreement for sale - The court considered whether interest on delayed possession should run from the date stipulated in the agreement (1 July 2016) or from a later date (1 January 2020) as claimed by the promoter. Held that the promoter is liable to pay interest from the date of default as per the agreement, i.e., 1 July 2016, and not from the extended date claimed by the promoter (Paras 1-10). B) Real Estate Law - Exclusion of COVID-19 Pandemic Period - Force Majeure - Under RERA and general law - The court examined whether the promoter is entitled to exclusion of the COVID-19 pandemic period (25 March 2020 to 27 July 2021 and 27 July 2021 to 30 September 2021) from interest liability. Held that the promoter is entitled to exclusion of the COVID-19 pandemic period from interest liability, as the pandemic constituted a force majeure event beyond the promoter's control (Paras 11-15).
Issue of Consideration
Whether the MahaRERA Tribunal correctly directed payment of interest from 1 July 2016 instead of 1 January 2020, and whether the COVID-19 pandemic period should be excluded from interest liability.
Final Decision
The High Court partially allowed the appeals. It held that the promoter is liable to pay interest from 1 July 2016 (the date stipulated in the agreement) and not from 1 January 2020. However, the court also held that the promoter is entitled to exclusion of the COVID-19 pandemic period from interest liability, i.e., from 25 March 2020 to 27 July 2021 and from 27 July 2021 to 30 September 2021. The order of the MahaRERA Tribunal was modified accordingly.
Law Points
- Interest on delayed possession under RERA
- Date of default for interest calculation
- Exclusion of COVID-19 pandemic period from interest liability
- Promoter's obligation to pay interest for delay in handing over possession
- Interpretation of agreement for sale and RERA provisions
