MahaRERA Orders Refund of ₹1.46 Crore Forfeited, As Kalpataru Later Resold Flat

The Maharashtra Real Estate Regulatory Authority has held that Kalpataru Property Ventures LLP could not forfeit over Rs 1.46 crore from two homebuyers after accepting more than the legally permitted 10% without a registered agreement for sale and then sell the same flat to a third party while retaining the money.

MahaRERA said the promoter could not be permitted to take advantage of its own statutory breach. “No party can benefit from its own wrong,” the Authority observed.

The order was passed by MahaRERA Member Ravindra Deshpande. The Authority held that once the flat was sold to another buyer, the developer's right to retain the complainants' money stood extinguished. “Once the flat has been sold to a third party, the Respondent cannot simultaneously retain the Complainants' money and the benefit of resale.”

Such conduct, it held, amounts to unjust enrichment, which the Act seeks to prevent.

The dispute concerns a flat booked in 2017 in the Kalpataru Yashodhan project at Andheri West, Mumbai. The complainants, Sanjay Navinchandra Choksi and Hina Sanjay Choksi, paid Rs 14,651,375, about 20% of the total consideration.

They said possession was promised by December 2018, with the balance amount payable only after the Occupation Certificate was obtained. Despite receiving more than the permissible 10%, the developer did not execute or register an agreement for sale.

The buyers said construction progress remained slow and documents were not provided, making it impossible to secure a bank loan. Despite this, the developer issued payment demand letters from 2017 onwards. By a notice dated February 12, 2020, the entire amount was forfeited. The flat was later sold to a third party.

The buyers approached MahaRERA seeking a refund, alleging violations of the Real Estate (Regulation and Development) Act. The developer claimed the buyers were investors and said it had suffered losses after selling the flat during the pandemic at a lower price.

Rejecting these submissions, the Authority held that any person to whom an apartment is allotted for consideration is an allottee under the Act, irrespective of execution of an agreement for sale.

“Mere allegations of investment intent, without proof of speculative resale or commercial dealing by the Complainants, cannot divest them of statutory protection under RERA. Therefore, the Complainants are held to be allottees entitled to invoke provision of RERA.”

The Authority noted that Section 13 prohibits acceptance of more than 10% without a registered agreement. It held that forfeiture beyond this limit, followed by resale of the flat, was illegal. Calling RERA beneficial legislation, the authority said the complainants had been wrongfully deprived of their funds for several years.

MahaRERA directed Kalpataru Property Ventures LLP to refund Rs 1,46,51,375 within 30 days. Interest is payable from January 1, 2019, at the rate of SBI's MCLR plus 2%. The developer was also directed to pay Rs 20,000 as costs.

For Complainant: Advocate Dharmendra Damani 

For Respondent: Adv. Sumeet Tyagi