Maha RERA Appellate Tribunal Rejects Expat Vida Homebuyers' Notional Claims, Says Proof Of Loss Needed

The Maharashtra Real Estate Appellate Tribunal (MREAT) has recently held that compensation cannot be awarded to homebuyers in the absence of proof of actual loss, ruling that notional claims such as loss of property appreciation, time value of money, missed investment opportunities, EMI burden, inflation, and increased cost of living are insufficient to determine compensation under the Real Estate (Regulation and Development) Act, 2016.

Holding that the appellants had failed to establish any actual loss, the Tribunal observed that “compensation cannot be awarded on the basis of notional losses” and requires clear evidence of damages arising from delay in handing over possession.

A Bench of Chairperson S.S. Shinde and Member Shrikant M. Deshpande, however, partly allowed the appeals by modifying the refund order passed by the Goa Real Estate Regulatory Authority in favour of homebuyers who had booked flats in the “Expat Vida Phase-II” project developed by Expat Projects and Development Private Limited.

While upholding the direction to refund the amounts paid by the allottees due to delay in handing over possession, the tribunal modified the interest component, holding that interest would be payable from the respective dates of each payment made by the homebuyers until realisation, instead of from June 30, 2021.

The dispute arose from agreements for sale executed between 2017 and 2019, under which possession was to be handed over by June 30, 2021. The project remains incomplete, and possession has not been delivered.

Aggrieved, the allottees approached the Goa Real Estate Regulatory Authority seeking a refund with interest, compensation, and revocation of project registration. By orders dated September 28, 2022, the Authority directed a refund with interest from June 30, 2021, imposed a penalty on the promoter, and referred the issue of compensation to the Adjudicating Officer.

The allottees challenged these orders before the Appellate Tribunal, seeking enhanced relief, including compensation on grounds such as loss of appreciation, investment value, EMI payments, inflation, and opportunity costs.

Opposing the appeals, the developer cited COVID-19 lockdowns, financial stress, and defaults by other allottees, contending that the delay was beyond its control and that refund obligations would jeopardise the project and affect other buyers.

Rejecting these contentions, the tribunal held that failure to hand over possession within the agreed timeline entitled the allottees to relief under Section 18 of the Act, which confers an unqualified right to seek refund with interest.

Referring to settled law, it quoted that “the right so given to the allottee is unqualified, and if availed, the money deposited by the allottee has to be refunded with interest.”

The tribunal also declined to accept the promoter's force majeure defence, observing, “Even if the force majeure factors as demonstrated by the promoter are given some consideration, we are of the view that the promoters are not entitled to get benefit of the same for the reasons that the same are not attributable to the appellants nor is the case of the promoters that the appellants, in any way, have caused delay in possession.”

Accordingly, the tribunal partly allowed the appeals and modified the interest component of the refund, while holding that compensation cannot be granted in the absence of proof of actual loss and cannot be based on notional claims.

For Appellants (Jessica Arun Naidu & Ors.): Appellants in person.

For Respondents (M/s Expat Projects and Development Pvt. Ltd.): Advocate Dr. Sanjay Chaturvedi.