Change In Partners Of Allottee LLP Does Not Justify Builder's Termination Of Flat Agreement: Maharashtra REAT

The Maharashtra Real Estate Appellate Tribunal has held that a change in partners of a limited liability partnership (LLP) does not amount to a transfer of a flat owned by it. It set aside Honest Shelters Pvt. Ltd.'s termination of an agreement for sale and directed it to hand over a flat in the Palais Royale project at Worli.

A Bench of Chairperson Justice S. S. Shinde and Administrative Member Shrikant M. Deshpande observed:

“The legislature in its wisdom has given perpetual succession and separate legal entity status to the LLP which is distinct and separate from its partners. The individual partners are not involved in the said purchase transaction in their personal capacities, but the rights of the appellant LLP i.e. "M/s, Amit Gharkul Builders LLP" only are involved. Therefore, the contention of the promoter that change in partners would result in transfer of rights and interests in the said flat in favour of the new partners is not legally sustainable"

Amit Gharkul Builders LLP purchased a flat on the 30th floor for ₹33.75 crore under a registered agreement for sale dated July 5, 2012, with Shree Ram Urban Infrastructure Limited. It paid ₹21.95 crore, with the remaining ₹11.80 crore payable upon possession. The promoter failed to deliver possession by December 31, 2013.

After the developer defaulted on its loan to Indiabulls Housing Finance, the Bombay High Court ordered its winding up. Honest Shelters acquired the project through a SARFAESI auction in June 2019, but 142 flats already sold to homebuyers, including the disputed flat, were excluded.

In December 2023, the Supreme Court held that these flats were not part of the insolvency estate and made Honest Shelters responsible for completing the project. The official liquidator handed them over to the company in January 2024.

Honest Shelters later terminated the agreement, alleging that the LLP had changed its partners without consent and failed to pay ₹3 crore in transfer charges.

The tribunal held that the LLP remained the allottee and that a change in its partners did not transfer the flat. It also found that the balance ₹11.80 crore was payable only upon possession, which had not been validly offered.

Setting aside MahaRERA's interim order, the tribunal directed Honest Shelters to hand over possession within 30 days, subject to payment of the outstanding amount and applicable charges.