Failed Conciliation Report Cannot Be Basis For Deciding RERA Complaints: Maharashtra REAT

The Maharashtra Real Estate Appellate Tribunal (REAT) on 5 August held that once conciliation between a promoter and homebuyers fails, the conciliation panel's report cannot form the basis for deciding their complaints because the panel's role is confined to facilitating an amicable settlement.

A Bench comprising Chairperson S.S. Shinde and Member Dr. Rajagopal Devara partly allowed Supreme Construction & Developers Pvt. Ltd.'s stay applications and permitted the Maharashtra Real Estate Regulatory Authority (MahaRERA) to decide the complaints afresh on their merits without relying on the Special Conciliation Panel's report. It held:

“Bare perusal of the said provision would make it abundantly clear that, said provision is to facilitate amicable conciliation of dispute between the promoters and the allottees through dispute settlement forums set up by the consumer or promoter associations. If there is no amicable conciliation of the dispute between the promoters and allottees through a dispute settlement forum, in that case, accepting such report and findings would be contrary to the legislative mandate and intent reflected in said provision.”

The dispute concerns Clan City, formerly known as Hex City, at Village Rohinjan, Taluka Panvel, Raigad, comprising nine separately registered phases or towers. The project comprises approximately 1,700 to 1,820 flats. Bookings commenced around 2010 and construction began around 2013.

Under several Agreements for Sale, Supreme Construction promised possession on or before 31 December 2017. The homebuyers alleged that the project remained incomplete despite several buyers having paid 95 per cent of the consideration.

All nine project registrations lapsed on 29 March 2024. As the project remained stalled, MahaRERA, through a Roznama dated 30 April 2025, directed the constitution of a Special Conciliation Panel under Sections 32(g) and 37 of the Real Estate (Regulation and Development) Act, 2016. Section 32(g) requires the Authority to facilitate amicable conciliation between promoters and allottees through dispute settlement forums.

The Panel subsequently held several rounds of conciliation involving Supreme Construction, the associations, the Mumbai Metropolitan Region Development Authority and the Panvel Municipal Corporation. It submitted its report on 5 January 2026.

After considering the report, MahaRERA passed an order on 30 January 2026 directing the initiation of proceedings under Section 8 of the Act for the takeover and completion of the project through an association of allottees.

Supreme Construction challenged the order through appeals and sought interim protection. The developer argued that the Act did not contemplate a Special Conciliation Panel making observations and recommendations. It also contended that the inclusion of builders, developers and persons from the construction industry in the Panel created a strong apprehension of conflict of interest.

The associations opposed the applications, highlighting the prolonged delay and the grievances of the homebuyers. They argued that MahaRERA's intervention was necessary to protect the allottees and facilitate completion of the stalled project.

The REAT found that MahaRERA had “substantially relied upon” the Special Conciliation Panel's report and that the report had, in substance, formed the basis for deciding the complaints. It also noted that MahaRERA's directions had virtually prevented other complainants from filing or pursuing similar complaints pending before it.

Referring to Section 32(g), the Tribunal held that the provision only facilitates amicable conciliation between promoters and allottees. Once conciliation fails, MahaRERA cannot use the Panel's report and findings as the basis of its adjudicatory order and must independently examine and decide the complaints on their merits. It observed:

“The MahaRERA ought to have undertaken research to find out, whether the said builders/developers who are part of the said panel, are in any way directly or indirectly connected/interested in the activities of the said project or to take over said project. The MahaRERA ought to have examined the rival contentions raised by the complainants and respondents thereunder and should have given independent findings, rather than substantially relying upon the conciliation panel report.”

The Bench modified its earlier ad interim order dated 8 May 2026 and clarified that MahaRERA may entertain the complaints referred to in its order and decide them afresh by recording independent findings on their own merits, uninfluenced by the Special Conciliation Panel's report.

Accordingly, the REAT partly allowed Supreme Construction's stay applications.

Appearances for appellant (Supreme Construction & Developers Pvt. Ltd.): Advocates Varun Nathani, Ankit Lohia, Nitin Parkhe, Supriya Chauhan.

Appearances for non-applicant/respondents (Clan City Welfare Association, Clan One City & Ors.): Advocates Godfrey Pimenta, Harshad Bhadbhade.