The main legal point established in the judgment is the liability of the promoter to pay interest to the flat purchasers under the Real Estate (Regulation and Development) Act, 2016 (RERA) and the effect of the date of completion declared at the time of registration of the project.

JUDGMENT :

1. These two Appeals are filed by the Promoter challenging common Judgment and Order dated 7 February 2023 in Appeal No.AT0006000000053317 of 2021 filed by the Respondents/flat purchasers and in Appeal No.AT0006000000093905 of 2022 filed by the promoter. Both Appeals were filed by the Respondents/flat purchasers and the Appellant/promoter challenging the order dated 27 July 2021 passed by the Maharashtra Real Estate Regulation Authority, Mumbai (‘MahaRERA’). The Appellant/Promoter is aggrieved by the MahaRERA Tribunal’s decision in directing payment of interest to the Respondents from 1 July 2016 instead of 1 January 2020. The Appellant is also aggrieved by rejection of prayer for exclusion of COVID pandemic period from 25 March 2020 to 27 July 2021 and 27 July 2021 to 30 September 2021 for interest liability.

2. Briefly stated, facts of the case are that the Appellant/Promoter undertook construction of building by implementing Slum Rehabilitation Scheme on Plot No.21/5, 21/6 (pt), South Estate Scheme No.57, Rafi Ahmed Kidwai Marg, Wadala (West), Mumbai, under which it is expected to accommodate 182 eligible slum dwellers. It is Appellant’s case that it has constructed the building made for rehabilitation of slum dwellers and Occupancy Certificate of that building was issued in the year 2013. That, the Appellant thereafter commenced construction of sale component building and clubhouse on the plot.

3. By registered Agreement for Sale executed with the Respondents, the Appellant agreed to sell, transfer and assign Flat No.901 admeasuring 68.41 sq.mtrs. carpet area on the 9th floor of the building ‘Vishnuchandra Sky’ together with 2 car parking spaces for total consideration of Rs.2,02,40,000/- plus taxes and other amount. Out of the said agreed amount of consideration, Respondents paid Rs.1,49,40,000/- to the Appellant with Rs.53,00,000/- remaining payable towards balance consideration. It is Respondents’ case that as per the agreement, possession of the flat was to be handed over on or before 31 December 2015 with a further grace period of 6 months i.e. by 30 June 2016.

4. It appears that the building could not be constructed and possession of the flat could not be handed over to the Respondents before 30 June 2016. Real Estate (Regulation and Development) Act, 2016 (RERA) came into force with effect on 1 May 2016 with 61 of 92 sections notified. The remaining provisions came into force on 1 May 2017. The Appellant registered its ongoing project with MahaRERA under the provisions of Section 4 of RERA Act by indicating the date of completion of building as 31 December 2019. Since possession of the flat was not handed over, the Respondents filed Complaint No.CC006000000023718 of 2018 before MahaRERA, Mumbai. When the complaint came up for hearing, the Appellant made a statement before MahaRERA that the project could not be completed due to financial issues and that financers were arranged and it committed to hand over possession of the flat to the Respondents by 31 December 2019. On account of the statement so made by the Appellant, the Respondents did not insist for payment of interest at that stage and accordingly the complaint was disposed of directing the Appellant to hand over possession of the flat to the Respondent before 31 December 2019 grating liberty for the Respondents to demand interest at an appropriate stage as per Section 18 of RERA.

5. Despite committing before MahaRERA, Appellant did not hand over possession of the flat to Respondents by 31 December 2019. Respondents therefore approached MahaRERA once again by filing Complaint No.CC006000000195842. The complaint was disposed of by MahaRERA vide order dated 27 July 2021 directing the Appellant to pay interest from 1 January 2020 at the rate prescribed under Rule 18 of Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rate of interest and Disclosures on website) Rules 2017 (‘Mahar