Case Note & Summary
The case involves an appeal under Section 58 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act) filed by Satyam Developers, the promoter of a project called 'Swaroop Harmony' in Santacruz (East), Mumbai, challenging the order of the Maharashtra Real Estate Appellate Tribunal dated 22nd July 2022. The respondents, Sama Mohamad Sharif Dalvi and another, were allottees of a flat in the project. On 2nd June 2010, the respondents booked the flat for a total consideration of Rs. 51,00,000 by paying a booking amount, and an agreement for sale was executed in 2011. The agreement stipulated that the promoter would hand over possession within 30 months. However, possession was not handed over despite the respondents paying a substantial amount of Rs. 46,83,788. The respondents filed a complaint with the Regulatory Authority under Section 18 of the RERA Act claiming interest for delayed possession. On 20th February 2020, the Regulatory Authority directed the promoter to pay interest from the date of booking till the date of possession. The promoter appealed to the Appellate Tribunal, which upheld the order but also suo motu set aside the termination of the agreement by the promoter, holding that the agreement was still subsisting. The promoter then filed the present second appeal. The High Court framed two questions of law: (1) whether the Appellate Tribunal was justified in upholding the order on payment of interest under Section 18(1), and (2) whether the Appellate Tribunal was justified in adjudicating the issue of termination without any application. The appellant argued that the interest should be payable only from the due date of possession, not from the date of booking, and that the termination of the agreement was valid. The respondents contended that the interest under Section 18(1) is payable from the date of booking and that the termination was not proved. The High Court held that under Section 18(1) of the RERA Act, the promoter is liable to pay interest from the date of booking till the date of possession, and the Appellate Tribunal correctly upheld the Regulatory Authority's order. However, the High Court found that the Appellate Tribunal exceeded its jurisdiction by suo motu adjudicating the termination of the agreement without any application or pleadings by either party, and set aside that part of the order. The appeal was partly allowed, upholding the interest order but setting aside the finding on termination.
Headnote
A) Real Estate Law - Interest for Delayed Possession - Section 18(1) RERA Act - The Appellate Tribunal upheld the Regulatory Authority's order directing the promoter to pay interest to allottees for delayed possession from the date of booking. The High Court held that the interest under Section 18(1) is payable from the date of booking till the date of possession, and the promoter cannot avoid liability by alleging termination of agreement without proof. (Paras 1-10) B) Real Estate Law - Jurisdiction of Appellate Tribunal - Termination of Agreement - The Appellate Tribunal suo motu adjudicated the issue of termination of the agreement without any application by either party. The High Court held that the Appellate Tribunal exceeded its jurisdiction by setting aside the termination without any pleadings or application, and such finding is without jurisdiction. (Paras 11-15)
Issue of Consideration
Whether the Appellate Tribunal was justified in upholding the order of the Regulatory Authority on payment of interest under Section 18(1) of the RERA Act, and whether the Appellate Tribunal was justified in adjudicating the issue of termination of the agreement without any application by any of the parties for setting aside the termination.
Final Decision
The High Court partly allowed the appeal. It upheld the order of the Appellate Tribunal regarding payment of interest under Section 18(1) of the RERA Act from the date of booking. However, it set aside the part of the Appellate Tribunal's order that adjudicated the issue of termination of the agreement, holding that the Tribunal exceeded its jurisdiction by doing so without any application or pleadings.
Law Points
- Interest under Section 18(1) RERA Act is payable from date of booking
- Appellate Tribunal cannot suo motu adjudicate termination of agreement without application
