20:80 Subvention Scheme covered under Section 18 if Agreement for Sale is Executed

By Dr. Sanjay Chaturvedi, LLB, Ph.D.

Naman Agarwal & Others V/s Reliance Enterprises and Dewan Housing Finance Ltd (CC006000000001788) Order dated: 28th March 2018

The complainants have filed this complaint u/s. 18 of Real Estate Regulation and Development, Act 2016 (RERA). They contend that they booked Apartment No. 904, A-Wing of Respondent s Hill View project situated at Chembur for Rs. 1, 21,00,000/-. Their apartment is in the sale Component the Respondent’s SRA project. The Complainants contend that they agreed to purchase the flat under 20:80 scheme, wherein they were required to pay 20%, of the total value of the flat at the time of booking and balance 80% was to be paid at the time of handing over the possession of the said apartment. The respondents agreed to deliver the possession of the flat by December 2015. The Agreement for Sale to this effect has been executed on 31.07.2013.

Respondent replied thus: complainants were aware of the fact that the project was being developed under SRA scheme and therefore the possession of their flat was likely to be delayed beyond the agreed date of possession December 2015. Not only that, this was the tentative date depending upon the availability of the building materials and the possession was likely to be delayed because of tl.re Govt. Rules, orders, regulations, etc. They admit that they have not handed over the possession of the flat to the complainants by the end of December 2015 because the letter of intent required them to seek various permissions and approvals mentioned in it.

Maha RERA observed: At this sta8e it is necessary to keep in mind that Maharashtra
Ownership of Flat Act, 1963 is in force and Section 88 of RERA permits its application. The agreement for sale has been executed in accordance with the provisions of Maharashtra Ownership of flat Act. Section 8 of the said Act provides a remedy of refund of the allottees’ amount on promoter’s failure to give possession in time. Its clause (b) provides that if the promoter for reasons beyond his control is unable to give possession of the flat by the date specified and a period of 3 months thereafter or a further period of 3 months, if the reasons still exist, then promoter shall be liable on demand to refund the amount already received by him with simple interest @ 9% p.a. from the date he received the same till they are refunded.

It is brought to my notice that since respondent No.1 stopped payment of interest on loan taken in the name of the complainants, respondent No. 2, a Finance Company issued a legal notice to the complainants under section 138 of Negotiable Instrument Act and put the hanging sword of the prosecution on their heads.

Respondent No.2 is the financial company from whom the loan is taken by respondent No.1 in the name of the complainants. Section 31 of the RERA Act provides that the complaint can be filed against Promoter, allottee or real estate agent for any violation, contravening of the provisions of the Act. Therefore, the complaint filed against respondent No.2, the financial institution, is not maintainable under Section 31 of the Act and it needs to be dismissed.

Credits: Landmark Judgements of RERA (Book)

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