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AT0060000000s2511

BEFORE MAHARASHTRA REAL ESTATE APPELLATE TRIBUNAL


MUMBAI

APPEAL NO. AT005000000052611


IN
coM PLAINT NO.CCo060000000497 47

(1) Pradip M. Mehta l


Mehta
(2) Nlrudula Pradip l
Both havlng address at 29-C,74th floor, l
Ushakiran CHSL, [41 Dahanukar Marg, ]
Cumballa Hill, l4umbai- 400 026. l Appellants

Sylvanus Propefties Ltd. l


having address at 16th floor, Indiabulls l
Finance Centre, Tower No.1, Senapati l
Bapat Marg, Prabhadevi (West) l
Mumbai- 400 013. l Respondent

Adv. Mr Manish Gala y'b Law Square for Appellants.


Adv Mr Mr Nirman Sharmd a/w Adv Mr Abir Patel i/b Wadia Ghandy
& Co., for Respondent.

CORAM : SHRIRAM R. JAGTAP, MEMBER (J) &


S,S. SANDHU, MEMBER (A)

DATE : loth August, 2022,

(THROUGH VrDEO CONFERENCING)

JUDG M ENT

IPER : SHRIRAM R. JAGTAP, MEMBER (J)l

This appeal emanates from the order dated 20th February


*P in
2020 passed by learned Chairperson, MahaRERA Complaint

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AT005000000052511

No.CC006000000089747 filed by allottees (original complainants) to

raise grievances that impugned order has not satisfactorily granted the

reliefs as sought by appellants in their complaint

2) Appellants and respondent will hereinafter be referred to

as 'Allottees' and 'Developer' respectively.

3l The facts, which are necessary for disposal of the present

appeal, are that the developer launched a project by name "lndiabulls

Savroli-l" situated at Khalapur. To attract the allottees the developer

depicted rosy picture of the project by representing that the project

has remarkable features that developer will provide Golf course with 12

holes and Club-house admeasuring 50,000 sq.ft. The Allottees

succumbed to the allurement of developer and booked an apartment

bearing No.401-C in the subject project of the developer for total

consideration of Rs.1,17,00,000/- (Rupees One Crore Seventeen Lakhs

Only) and made part payment of Rs.17,00,000/- (Rupees Seventeen

Lakhs). The developer promised to hand over possession of the subject

flat by February 2018. However, the developer unilaterally changed/

revised date of possession to 28th February 2019 on MahaRERA Project

Registration webpage. Even after the revised date of possession, the

r^,&1 developer had failed to complete the project. Moreover, all amenlties

I more particularly Golf course with 12 holes and Club-house as promised

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are not provided. The developer has failed to adhere to the

commitments and therefore the allottees by email dated 6th March 2019

intimated the developer that they have cancelled the booking and

asked developer to refund the amount paid by them together with

interest. Allottees by several oral communlcations asked the developer

to comply with its statutory obligation. However, the developer has

failed to reply to the same.

4l Thereupon, allottees filed the complaint and in reliefs, the

directions were sought to developer viz. (i) to pay compensation of Rs.5

lakhs to complainants for not providing amenities, (ii) to refund the

amount paid by the complainants with interest from 2"d July 2014. (iii)

to pay maximum penalty as per the provisions of RERA and (iv) to pay

Rs.1,00,000/- (Rupees one lakhs only) towards cost of the litigation.

5l The defence of the developer which emerged from the

impugned order is that developer had asked allottees to come forward

to execute and register the agreement for sale on various occasions,

however, the allottees have failed to do so. The subject flat is still

available for possession and the developer is willing to execute and

register the agreement for sale in respect of subject flat. The developer

has fudher contended that in case allottees want to cancel booking,

then such cancellation must be guided by Clause 16 of the booking

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form (i.e. application for provisional reservation) as no agreement of

sate has been executed between the parties. It was fufther contended

that brochure relied upon by the allottees is not issued by the

developer, but by third party and therefore the allottees cannot claim

misrepresentation by the developer.

6l After hearlng the parties, the learned Authority passed the

order under challenge in this appeal. For convenience, the relevant

part of the order is reproduced as follows :-

"In view of the submtssion of the learned counsel for the


Respondent that the said apartment is still available and
the Respondent is willing to execute and register the
agreement for sale for the same, the Complainants are
advised to execute and register the agreement for sale as
per the provisions of Sedion 13 of the Real Estate
(Regulation and Development) Act, 2016 and the rules and
regulations made thereunder withtn 30 days from the date
of thls Order

In case, the Complalnants are still firm on thetr decision to


cancel their boking and their intention to withdraw from the
said project, then refund, if any, shall be guided by the
terms and conditions of the booking form.

Consequently, the matter is hereby disposed of"


7l We have heard Adv, f4r. l'4anish Gala for allottees and Adv.

lulr. Nirman Sharma for develooer,


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8l Learned counsel for allottees while assailing impugned


order has invited our attention to the lmpugned order and submitted

that impugned orders dated 24th December 2019 and 20th February

2020 are illegal, perverse and unsustainable in law. He further argued

that to lure home buyers, the developer has represented allottees that

project has unique features. The developer will provide Golf-course and

Club-house admeasuring 50,000 Sq.ft. The allottees succumbed to said

representation and booked flat in the respondent's project for

consideration of Rs.1,1200,000/- and made part payment of

Rs.1200,000/- to the developer The developer issued receipt dated 2nd

July 2014 to allottees. At the time of booking of the said flat, the

developer promised to hand over possession of the subject flat along

with occupation certificate on or before February, 2018. The developer

registered the project with [4ahaRERA wherein promised date of

possession was mentioned as 1* July, 2017 which was unllaterally

extended to 28rh February 2019. The developer failed to complete the

project within stipulated period and therefore allottees vide email dated

6th March 2019 informed the developer that they have cancelled the

booking and asked developer to refund booking amount with interest.

9] It is further argued that it is not in dispute that despite

repeated extensions granted to the subject project, the developer failed

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to obtain occupancy certificate for the said project upto 31st l4arch 2021

and the possession of the subject flat was offered to allottees for the

flrst time on 4th May 2021. However, impugned order traversed beyond

the scope of complaint without appreciating the facts and incorrecfly

recorded in paragraph 5 of the impugned order that developer had

obtained part occupancy certificate of the buildings in which contained

the subject apartment on llth January 2018, much before the


complaint has been filed. The learned Authority incorrectly recorded in

the order that part occupation certificate has been obtained prior to

email dated 6th March 2019 sent to developer for cancellation of subject

flat. These observations would clearly indicate that the impugned order

came to be passed without application of mind.

101 Adv. |\.4r. Manish Gala for appellants has sorely submitted

that when there is no delivery period stipulated in the document then

promoter is expected to hand over possession within a reasonable

period and period ofthree years is a reasonable time. It is not in dispute

that allottees have booked flat in June 2014, therefore, developer was

supposed to hand over possession of the subject flat to appellants by

June 2017. The allottees cannot be made to wait indefinitely.


Admittedly there is no agreement specifying the date of possession,

but the developer mentioned the date of possesslon on MahaRERA

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portal as lstJuly 2017. The developer in his reply for the first time

admitted that the developer has received part occupation certificate on

3lst lularch 2021. The developer has violated the provisions of RERA.

Under sub-section 3 of Section 11 of RERA, the developer is obliged to

discharge any other obligations imposed under the Act of 2016 and in

the event of failure thereto would be liable to pay compensation.

Appellants have placed their reliance on following citations :-

(1) Prakash Corporates Vs. Dee Vee Projects Ltd.


[Judgment dated 14th February 2022 of Hon'ble
Supreme Court in 1318 of 2022].

(2) K. Sulaiman Vs. K.P. Nafeesa


[Judgment dated 18th November 2021 of Hon,ble
Kerala High Court in R.C. Rev. t44 ol 2O2L7.

(3) M/s Essjay Erriccson Private limited Vs. M/s


Frontline (NCR) Business Solutins h .
lorder dated 10th January 2022 passed the Hon'ble
National Company Law Tribunal in Company Appeal
(AT Insolvency) 936 of 2021.

(4) H.S, Goutham Vs Rama Murthy & Anr,


IHon'ble Supreme Court in Civil Appeal No.1844 of
2010 dated 12th February 2021.

(5) Mangesh Tukaram Sawant Vs. M/s Sailee Developer


IMaharashtra Real Estate Appellate Tribunal in
Appeal No.AT0060000000527ss dt.10.12.20211.

(6) Nadakerappa since deceased by LRs & Ors. Vs.


Pillama since deceased by LRs & Ors,
[31st March 2022 passed by the Hon'ble Supreme
Court in civil Appeal Nos.7657-7558 of 2018.

P (7) Bhavini Chirag Shah & Anr. Vs. Neminath


Construction & Anr.
lJudgment dt. 1.4.2O2L by Maharashtra Reat
Estate Appellate Tribunal in Appeal No.AT
/ /21
B
4T0060000000s2611

00600000003r7221.

(8) Pioneer Urban Land & Infrastructure Ltd. Vs.


Govindan Ragahvan
lSupreme Court judgment dt.2.4.2019 in Civil
Appeal No.12238 of 2018.1

(9) Ireo Grace Real Tech. Pvt. Ltd. Vs. Abhishek


Khanna.
[]udgment dt.11.1.2021 passed by Hon'ble Supreme
Court in Civil Appeal No.5785 of 20191.

(10) M/s Dosti Corporation Vs. Sea Flama Co,Op.


Housing Society.
lJudgment dt. 7.4.2OL6 passed by Hon'ble Bombay
High Court in Appeal from order No.117 of 20161.

(11) Shekhar R. Prasad Vs. Moongippa Realty Pvt,Ltd.


[]udgment dt.28.1.2021 passed by Maharashtra
Real Estate Regulatory Authority in
cco06000000044128 & cco0600000001819s71.

(12) Judgment dt. 25,3.2022 passed by Maharashtra


Real Estate Appellate Tribunal in Appeal No.
4T006000000053065-53066.

(13) Sahyog Homes Ltd. Vs. Arif Yakub Ansari


[]udgment dt.27.7.2020 passed by Maharashtra
Real Estate Appellate Tribunal in Appeal No.
AT006000000021325 of 20191.

(14) Kolkata West International City Pvt. Ltd. Vs.


Devasis Rudra,
[]udgment dt.25.3.2019 of Hon'ble Supreme Court
in civil appeal No.3182 of 2019].

(15) Fortune Infrastructure Vs. Trervor D'Lima


[Judgment dt.13.3.2018 by Hon'ble Supreme Court
in Civil Appeal Nos.3553-3554 of 2017.

(16) Mrs. Shikha B. canguli Vs. Bhupesh Babu Karappan


Niliparambil.
[Judgment dt.22.7.2021 passed by Maharashtra
Real Estate Appellate Tribunal in Appeal No.
AT00600000o0s28481.

(17) Shree Shakun Realty Pvt. Ltd. Vs. Mr. Vijay Solanki
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AT006000000052611

[Judgment dt.16.2.2021 passed by Maharashtra


Real Estate Appellate Tribunal in Appeal No.
AT0060000000212631.

(18) Sridhar Krishna Mani & Anr. Vs. Lucina Land


Developer Ltd.
[Order dt.19.4.2022 passed by Maharashtra Reat
Estate Appellate Tribunall.

(19) Bombay Dyeing Vs, Ashok Narang


lJudgment dt 30.8.2020 passed by Hon'ble
Bombay High Coud in Second Appeal (st.) No.
4996 of 20201.

(20) M/s Newtech Promoters And Developer pvt.Ltd.


Vs. State of U.P. & Ors.
lJudgment dt.11.11.2021 passed by Hon,bte
Supreme Court in Civil Appeal Nos.6745-6749 of
2O2Ll.

(21) Mr. Harpreet Singh Jasjit Singh Tibb Vs.


Sylvanus Properties Ltd.
lJudgment dt.2.2.2022 passed by Maharashtra Real
Estate Appellate Tribunal in Appeal No,
AT0060o0o000109s01.

111 Since developer has failed to hand over possession of the

subject flat within stipulated period and even after revised date of

possession, indefeasible right to claim refund of amount paid together

with interest has accrued to appellants. With these submissions Adv.

lv'lr. lYanish Gala for appellants prayed to grant reliefs in terms of prayer

clause of the appeal and complaint

t21 An abridgment of arguments of learned Advocate Mr.

Nirman Sharma for developer is that there is no basis on which the

allottees are claiming the date of possession as February 2018.


Allottees have failed to produce any document which indicates that
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agreed date of possession is February 2018. Parties have executed

application for provisional reservation dated 30th lune 2014. Except this

document, no other document is executed by the parties. A careful

examination of application for provisional reservation would show that

the date of possession shall be the date of intimaUon of grant of

occupation certificate, and this date governs the parties until execution

of agreement for sale. This is the only date of possession which is

committed by the developer. Parties are governed by terms and

conditions contained in the application for provlslonal reservation dated

30th June 2014 owing to allottees'deliberate failure to execute and

register agreement for sale. There is email communication between

allottees and developer to that the developer promised to deliver

possession of subject flat by 31st l'4ay 202f.

13I Learned Adv, Mr. Nirman Sharma has vehemently

submitted that allottees have avajled of a 10:90 subvention Scheme,

whereby the allottees were to pay only 100/0 upfront and the balance

90yo on possession. Since the booking was made much prior to coming

into force of the RERA, law did not require the developer to execute

and register agreement for sale until 20% of the conslderation is


tu#-
"r received. After registration of project with MahaRERA, accordingly in

terms of requirement of Section 13 of the RERA the developer called

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upon allottees to execute and register the agreement for sale on

30.09.2018, 02.02,2019, 30.07.2020, 09.09.2020, 06.01,2021,

11.05.2021 and 72.05.202t. Though allottees had, as per terms of

booking form, agreed to execute and register the agreement for sale

when called upon, they failed to do so, and thereby allottees have

violated the provisions of Section 4 of MOFA and Section 13 of RERA.

t41 It is further argued by the developer that according to

allottees the developer promised to deliver the possession of subject

flat in 2018 but, the allottees did not take action by filing any
proceedings when the said date had passed. The allottees only raked

up the entire belated case of delay in possession after approximately

17 months after alleged possession date of February 201g had passed.

It is fufther contended that the allottees have specifically pleaded in

para-4 of the appeal memo that they have invested in the subject flat

for earning rental income. The allottees are seeking an exit since they

are losing out the rental income. This conduct of allottees clearly

indicates that the allottees are certainly not genuine home buyers, but

investors who are now taking the advantage of the provisions of RERA

to make return on investment.

151 It is further argued that after receipt of occupation

ceftificate, the developer called upon the allottees for registering the

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agreement for sale and also offered possession of the subject flat.

However, the allottees did not come fonvard to execute agreement for

sale. Moreover, the allottees failed to make payment of final installment

of Rs.7,77,92,297 to developer and thereby deliberately breached the

provisions of Section 19(6) of the RERA which require the


allottees to

make final payment. Section 19(10) of RERA mandates every allottee

to take possession withjn two months on recejpt of occupatjon

certificate.

161 Adv. Mr. Nirman Sharma has strenuously submitted that

allottees have no grievance till respondent asked them to execute

agreement for sale. By email dated 6th N4arch 2019 the allottees

expressed their desire to withdraw from the project for no reason. The

project is complete in all respects. The occupation certificate is received

by developer. Why allottees are not ready to take possession is not

explained by allottees. Allottees in fact never intended to execute sale

agreement by paying final installment and unceremoniously and

unilaterally cancelled the booking to claim refund of the amount


without offering any valid reasons therefor. Learned counsel has placed

his reliance on the following citations :

W (1) Ashok Kapit Vs. Sana U[ah (Dead) & Ors


[(1996) 6 sCC 342].
(2) Sachin Patil Vs. Manish Khandetwat
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IOrder dt,20.11,2017 passed by Maharasht]a


Real Estate Regulatory Authorityl.

(3) National Thermal power Corporation Ltd.


Vs M/s Ashok Kumar Singh & Ors.
[(201s) 14 SCC 2s2].
(4) Union of India Vs, N. Murugesan & Ors.
[2021 (4) SCr 287 (SC)].
(5) Pioneer Urban Land and Infrastructure
Ltd. & Ors, Vs. Union of India & Ors.
[2019 (8) SCC 416].

With the above submissions Adv [4r. Nirman Sharma has

submitted that appeal be dismissed with costs.

17) We have given thoughtful consideration to the submissions

advanced by learned counsel for respectjve pafties. On conslderation

of the pleadings of the parties, documents relied upon by the parties

and impugned order, following points arise for our consideration :

Sr. No, Points for determination Findinqs.


(1) Whether complainants/allottees
are entitled to relief as prayed for par y yes.
due to delay in possession ?

(2) Whether impugned order calls In the


for interference in the Appeal ? affirmative

(3) What order ? As per final

w 181
Order.

We answer the aforesaid points as above for the reasons

to follow :

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REASONS AND CONCLUSION

191 The allottees have sought relief of refund of amount

together with interest primarily on two grounds viz. (i) delay in

delivering possession of subject flat and (ii) not providing amenities i.e.

(a) Golf course with 12 holes and (b) Club-house admeasuring


50,000

sq.ft.

2Ol It is not in dispute that allottees have booked subject flat


on 3oth June 2014 and made part paymet of Rs.17,00,000/_. It is atso

not in dispute that no agreement for sale has been executed by the

parties. According to appellants the developer promised to deliver


possession of subject flat by February 201g, whereas according to
developer the date of possession was the date of intimation of grant of

occupation certlficate and this date governs the partjes until execution

of agreement for sale.

2l) For the purpose of working out the date of delivery of

possession, any oither documents such as allotment letter, brochure,


pamphlets, email communications etc. specifying the date of
-fl possession can be considered in the absence of formal agreement
for
sale executed by pafties. Only document i.e, application for provisional

reservation dated 30th June 2014 is placed on record by the developer

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for the purpose of worklng out the date of possessjon. However, there

is no mention of specific date of delivery of possession of


subject flat
in the said application. We are, therefore, of the view that this
document does not help in determining promised date of possession
of
the subject flat.

22J When the date of possession is not specifically mentjoned

in the application for provisional reservation dated 30th June 2014


and

there is no other document on record to demonstrate the specific date

of possession, then in that case, the date of completion of prolect

mentioned on MahaRERA project Registration website is to


be upheld.

It is not in dispute that after coming into force of RERA 2016, the

developer has registered the project with MahaRERA wherein the

respondent promised to complete the project by 1* July 2017. It has

been held by the Apex Court in a case M/s Fortune Infrastructure


(now known as M/s Hicon fnfrastructure) & Ann Vs. Trevor

DZima & Ors. [Civil Appeat Nos.3gjj-Zgg4 of 2Ot7 dated t$h

March 2O78J that "moreover a person cannot be wait indefinitely for

the possession of the flat allotted to them and they are entifled to seek

refund of the amount paid by them, along with compensation. Although

we are awaTe of the fact that when there was no delivery period

stipulated in the agreement, a reasonable time has to be taken into

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consideration. In the facts and circumstances of the case, a time period

of three years would have been reasonable for completion of contract

i.e. possession was required to be given by last quarter of 2OL4:,

231 It is not in dispute that allottees have booked flat on 30th

June 2014. In the light of the above ratio laid down by the
Hon,ble

Supreme Court, the date of possession can be deciphered to be


1s July

2017, which is also mentioned on l.4ahaRERA project Regishation

website by the developer and therefore we are of the considered view

that the date of detivery of possession of the subject flat was 1,t July

2017.

241 It is not in dispute that the period of limitation to comptete

the project was extended to 28h February 2019 by MahaRE&q. Despite

extension, the developer failed to complete the subject project. It is

also not in dispute that allottees by email dated 6th March 2019

informed the developer that they have cancelled booking and


asked

the developer to refund the booking amount with interest on account

of delay in possession.

25I It is not in dispute thatthe developer has completed project

and obtained occupation certificate for the subject project on 31st

March 2021. The developer has not offered explanation for delay
in

completing the project. The due date of handing over possession


of

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subject flat is fixed by the developer after ascertaining all favourable

and unfavourable circumstances for completing construction of the

project and post compliance i.e. for obtaining occupation certiflcate. So

the developer is required to fix due date in anticipation of such adverse

circumstances to complete the project. We reiterate here that the


developer has not offered explanation for not completing the project

within stipulated period

26) Section 18(1) of RERA spells out the consequences if


promoter fails to complete or is unable to qive possession of an

apartment, plot or building either in terms of agreement for sale or to

complete the project by the date specified therein on account of

discontinuation of his business as a developer either on account of

suspension or revocation of the registration under the Act or for any

other reason, the allottee/home buyer holds an unqualified right to

seek refund of amount with interest at such rate as may be prescribed

in this behalf. If the allottee does not intend to withdraw from the

project, he will be paid interest by the promoter for every montht delay

in handing over possession at such rate as prescribed

P 27) It is now settled law that if the delay is not attributable to

allottees, they are entitled to claim relief provided under Section 18 of

RERq. In this regard, it would be appropriate to reproduce the

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oibservations made by the Hon'ble Supreme Court in para 25 of the

case of M/S Newtech Promoters & Anr, Vs. The State Of Uttar

& Others [Civil Appeal Nos.5745, 6749 and 6757 it ZO2L)

hereunder:

' 25 The urutudlilicd right oj thc alkntee k) seek re/irnd re.ferretl under
Sectian l8(1)(a) and Section l9(1) o/ lhc Act is not dependent on any
contingencies ar stipulati()N lheruo/- It appedrt thttt the legitlature hus
consciously providcd this right of lei)nd on demand as an unconditional

absolute right to the dlloftee, if the promoter.fails to gite possession of the


dpdrlment, plot or building*ithin the time stipulated uttder the terfis oJ the
agrecment regordlest of unforeseen erents ot stay orders of the
Court/Tribunal, which is in either way tot aflributable to lhe nllo ee/lrome
buyer, lhe ptumoler is under in
ohligalion to ref ntl the amount on
den and with ihterest nt the rote prcsctibetl bt the St|te (;oyerntue l

incl ding couipcnsation in tlle manner provided under thr Act \t,ith the
ptoriso that il the allottee Lloes n(rt y'ish to ttithdrav /iom the projecl, he
shall be entitled for intcre.i lL'r lhe periad of delay titt handing otcr
posscssion at the rate prescribed."

281 As per l4ahaRERA Project Registration website, the

developer committed to complete the project on lst July 2017. However,

in spite of extension of the said period from time to time, the developer

failed to complete the project within reasonable period and thereby

falled to hand over possession of the subject flat to Allottees. Therefore

Allottees are entitled to refund of amount with interest on their


investments under Section 18 of RERA

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291 Adv. l4r. Nirman Sharma for respondent has vehemently

submitted that any exit by the Allottees from the subject project will

entail huge loss to the developer as allottees have blocked the subject

flat for last eight years and the developer has even in relative terms

bore 900/o amount out of total consideration for constructing the

subject flat against the contribution of the allottees. Allottees' unilateral

exit from the project when there is no violation of provisions of RERA

on the part of the developer will entail forfeiture of the amount in terms

of clause 16(c) of the applicatlon.

30] We do not find substance in the said submissions. We have

already observed that the developer has failed to hand over possession

of the subject flat to allottees by due date i.e. 1.t luly 2017 mentioned

in lvlahaRERA Project Registration website. There is no express

provision in the RERA, 2016 by which promoter is entifled to forfeiture

of the amount in the event of cancellation of booking on the part of

allottees especially when allottees are not at fault or instrumental in

causing delay. Besides the Act is silent on the point of permissible

deduction lf allottee sou motu/unilaterally for whatsoever reason

cancels booking. It is not in dispute that allotees have paid earnest

money of Rs.17,00,000/- to developer on 30th June 2014 and the

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developer has utilized the said amount slnce 30th June 2014 till

completion of the project for his commercial purposes. Therefore walre

of the view that interest can be awarded to the allottees on their

investment from 1* July 2074. After considering the overall

circumstances of the case, we are of the view that allottees are entiUed

to refund of the amount paid together with interest without any


deduction or forfeiture.

311 Therefore the appellants are entitled to interest only on the

amount paid from 1$ July 2014 till realisation of entire amount, For the

foregoing reasons we have come to the conclusion that impugned order

requires interference in this appeal. Consequently, we proceed to pass

the following order :-

ORDER
ll Appeal No.AT0060000000526L1 of 2O2O is partly altowed.

iil Impugned order dated 20th February 2020 passed in

Complaint No.CC006000000089747 is set aside.

iiil Promoter/Respondent is directed to pay interest @ State

Bank of India's highest I\4arginal Cost of Lending plus 2olo

on the amount paid by the allottees from 1st July, 2014 till

w ivl
the realisation of the entire amount.

Pafties to bear their own costs.

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AT006000000052611

vl Copy of this judgment be sent to both the parties and


MahaRERA as per Section 44(4) of RERA.

G'&t
o
\.-'
(sH RIBAM R. JAGTAP)

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