Summary of this article
Mumbai builder ordered to pay landowners over Rs 1.22 crore.
Commission directs payment of Rs 88 lakh with 8 per cent interest.
Developer must register flat agreement and clear pending redevelopment dues.
A flat was handed over, but the financial terms of a redevelopment deal were still unsettled. Two landowners from Mumbai’s Matunga approached the Maharashtra Consumer Disputes Redressal Commission after their developer failed to clear payments promised under agreements signed for the redevelopment of their property. The Commission has now directed the builder to pay them more than Rs 1.22 crore, apart from interest on part of the amount.
Unpaid Dues Led To A Consumer Complaint
The dispute concerns Magan Vihar, a property in Matunga in which Sejal Pravin Shah and Monal H Mehta, along with their late mother, held an undivided share. They transferred their development rights to a builder in March 2010.
As part of the deal, the developer agreed to provide a 1,395 sq. ft. flat and two car parking spaces. Agreements signed in February 2015 also covered financial payments, temporary accommodation rent and compensation for delayed possession.
The family received possession of the new flat in May 2018. However, the landowners approached the Commission over payments that they claimed had not been made.
Their claims included Rs 88 lakh for additional floor space, Rs 6.60 lakh in unpaid rent for temporary accommodation between December 2017 and April 2018, and Rs 16.50 lakh as a penalty for delayed possession. They also sought Rs 10 lakh for raw materials purchased by them.
The builder had also not completed registration of the permanent alternate accommodation agreement or paid the stamp duty and registration charges it had agreed to cover for 1,000 sq. ft. of carpet area.
In June 2022 the developer demanded Rs 30.26 lakh from the landowners towards alleged construction expenses.
Commission Rejects Builder's Demand
The Consumer Commission had found that the developer did not fulfil its obligations under the redevelopment agreements. It also held that the demand for Rs 30.26 lakh amounted to an unfair trade practice.
The builder did not appear before the Commission despite receiving notice, and the matter was heard in its absence.
Under the order, the developer must register the permanent alternate accommodation agreement within 60 days of receiving the order. It must also pay Rs 88 lakh in compensation for additional floor space, with interest at 8 per cent from the date of default until the amount is paid.
The remaining directions cover Rs 6.60 lakh in rent, Rs 16.50 lakh for delayed possession and Rs 10 lakh for raw material expenses. The builder must also pay Rs 1 lakh for the hardship and mental distress suffered by the landowners, along with Rs 50,000 towards legal costs.
Signed Agreement Supported Landowner's Claim
The Commission accepted the landowner's claims based on the redevelopment agreements and the evidence of unpaid dues. It also recognised that handing over development rights in return for a flat amounted to consideration for housing services.
Under the Real Estate (Regulation and Development) Act, 2016, eligible complainants can approach the relevant authority under Section 31 and file a complaint. Section 18 provides for interest on delayed possession or a refund with interest and compensation when the conditions specified under the law are met.
