Bombay HC upholds Rs 5 crore compensation awarded by the Maharashtra RERA Adjudicating Authority [Read Order]

The Bombay High Court recently affirmed the dismissal order of Maharashtra RERA Appellate Tribunal. The Court directed compliance with Maharashtra RERA Adjudicating Authority order directing payment of Rs. 5 crores compensation payable to a party who had not been handed over the possession of certain property even after a delay over around 80 months.

. The order was passed by Justice SC Gupte , who dismissed a second appeal in the matter filed by Renaissance Infrastructure Ltd . i.e. the promoters, who were represented by Senior Advocate Prasad Dani along with Advocate Sachin Pawar.

. The dispute arose after Renaissance failed to give possession of the premises in 2010, as agreed by them in an agreement for sale between Renaissance and the purchasers.

. The RERA authority calculated the compensation, as per the clauses in the agreement, as amounting to Rs. 5.04 crore. Ruling in favour of the purchasers, the RERA authority ordered Renaissance to pay Rs. 6.3 lakhs per month and to hand over possession of the property to the purchasers.

. Renaissance challenged this order before the appellate Tribunal. The appellate Tribunal asked Renaissance to deposit 50% of the compensation amount as per Section 43(5) of the RERA Act for entertaining the appeal.

. However, when Renaissance failed to pay the pre-deposit, the appellate Tribunal dismissed the appeal. Therefore, Renaissance filed a second appeal in the Bombay High Court.

. Before the High Court, Senior Advocate Dani submitted:

That the agreement between Renaissance and purchaser was in lieu of a partnership, hence Renaissance was not a promoter.

That original claim of the purchasers was devoid of merits.

That the challenged order was in the nature of liquidated damages, which the authority has no jurisdiction over.

. Justice Gupte, however, found no infirmities in the orders passed by the RERA Authority and the RERA Appellate Tribunal. He held that the orders do not give rise to any substantial question of law for the consideration of the High Court.

. Among other reasons, Justice Gupte observed that Renaissance was developing plots and was liable to hand over the property as agreed to, regardless of whether the purchaser was a former partner.

. He remarked that “ under this agreement, termed as 'agreement for sale', the Appellant was bound to hand over possession of the suit premises to the Respondent within an agreed period ” and thus the agreement is “ nothing less than an agreement for sale. ”

. The Court added,

" Afterall, consideration of an agreement for sale, instead of money, may well be any valuable consideration, including satisfaction of the allottee’s share in the promoter’s partnership. ”

. Further, it was observed that none of the other grounds pleaded by Dani “ call for dispension of pre-deposit ” before the appellate Tribunal under Section 43(5) of the RERA Act, which is mandatory.

. Therefore, the High Court dismissed the second appeal and ordered as follows:

. "The Appellant is given four weeks’ time to pay the amount ordered by the adjudicating authority, RERA. …if the amount is not paid within four weeks, the Tehsildar may proceed with the sale of the attached property.” Bombay High Court . Dani applied for a stay of this Order. However, it was rejected by the Court.

. The purchasers in the case were represented by Advocate Rubin Vakil with Advocate Prashant Ghelani, Ankul Kalal and Vinay Shingada briefed by Markanda Gandhi & Co .

. Read the order here.

. *Corrigendum: The headline earlier read that the compensation upheld by Bombay HC was awarded by the Maharashtra RERA Appellate Tribunal. However, the compensation has been awarded by the Maharashtra RERA Adjudicating Authority.

Bombay HC upholds Rs 5 crore compensation awarded by the Maharashtra RERA Adjudicating Authority [Read Order]

Neha Joshi

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