2024-03-15 03:33:18
New Delhi: Bombay High Court recently gave an important decision which has created a stir in the real estate industry. During the hearing of a case, the court ruled that the co-promoter is responsible for the refund along with interest for the delay in the flat. While interpreting the term promoter, the court has said that it also includes co-promoters. Even if he has not received the money from the flat buyers, under the Real Estate Regulatory and Development Act (RERA), he is liable for a refund along with interest in case the flat is delayed. The court said that in RERA, which came into effect from the year 2017, a detailed definition of promoter has been given and every person associated with the construction of the building has been included in it. Therefore, it is not necessary to have an agreement between every buyer and promoter. The court said that if a person has invested in the project with the promoter and has benefited from it, then he also comes under the purview of the promoter. The court said this during the hearing on an appeal by Wadhwa Group Housing Private Limited. This company had challenged an order of the RERA Appellate Tribunal in the High Court. The tribunal did not relieve the company from the responsibility of refund. This decision of the High Court on 26th February has created a stir in the real estate industry. Lawyers say that this decision has answered a question for which many people were waiting. Experts say that this decision will impact many redevelopment projects of Mumbai.
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what was the question
The question before the court was whether a promoter can be held responsible for refund under Section 18 of RERA if he has not received any money from the allottee. Wadhwa Group Housing was the co-promoter in the SRA project in Andheri. In 2012, two builders had divided the constructed area among themselves in a joint agreement. This area was to be sold. Vijay Choksi, a flat buyer, had complained about this to Maharashtra RERA and co-developer SSS Escatics demanded a refund of Rs 1.2 crore. He was supposed to get this flat by 2019 but the builder delayed it. The RERA Appellate Tribunal said in its decision that Wadhwa Group Housing also bears responsibility in this.
Wadhwa Group Housing had challenged the decision of the RERA Appellate Tribunal in the High Court. Company lawyer Naushad Engineer said that Choksi had given money to Escatics and the responsibility of refund also falls on him. The engineer said in his argument that the builder cannot be held responsible for the payments made in the earlier rounds of RERA. The court said in its decision that while deciding the joint liability, it does not matter in which account the promoters had received the money.