Maharashtra RERA Imposes ₹10 Lakh Penalty On Developers For Failing To Allot Flat

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has imposed a ₹10 lakh penalty on Sai Enterprises and Super Construction for failing to comply with an earlier order directing them to allot a flat to two homebuyers.

Adjudicating Officer R.K. Malabade found that the developers had also failed to pay interest on ₹17.49 lakh received from the homebuyers. The authority directed recovery of the interest from June 24, 2012, along with ₹20,000 in complaint costs.

“However, there is non compliance in the directions of the final order passed by the Hon'ble Authority, committed by the respondents,” the adjudicating officer observed.

The dispute concerns Flat No. B07, measuring 795 square feet, in Wing B of a project originally known as Sun Gates and later renamed Sethia Imperial Avenue.

The homebuyers booked the flat from Super Construction under an allotment letter dated May 29, 2010, for ₹43,72,500. They paid ₹17,49,000 towards the purchase price, with possession promised by June 23, 2012.

The homebuyers told MahaRERA that Super Construction had failed to execute a registered agreement for sale. In a letter dated March 23, 2018, the developer expressed its inability to continue construction and asked them to approach Sai Enterprises, which had acquired development rights, for a refund.

The homebuyers refused the refund and insisted on receiving the flat.

On October 31, 2025, MahaRERA directed both developers to allot a flat measuring 795 square feet of carpet area and execute a registered agreement for sale within 45 days, subject to payment of any outstanding consideration under the original allotment letter.

The authority also directed both developers to pay, jointly and severally, simple interest on ₹17.49 lakh from June 24, 2012, until possession, at the rate prescribed under Rule 18 of the Maharashtra RERA Rules. Sai Enterprises was separately directed to pay ₹20,000 towards complaint costs.

When the developers failed to comply, the homebuyers approached MahaRERA seeking enforcement of the order and a penalty under Section 63 of the Real Estate (Regulation and Development) Act, 2016.

They alleged that the developers had sold flats after the original order to defeat their claim. They also submitted that the developers had not paid the ordered interest.

Sai Enterprises argued that it had no contractual relationship with the homebuyers and that no flat matching the specified dimensions existed in its registered project. It also contended that it had not received any money from them.

Super Construction relied on an architect's certificate dated January 19, 2026, which stated that the corresponding carpet area was approximately 480 square feet and that 795 square feet referred to the saleable or super built-up area. It sought to defer the execution proceedings until its review application was decided.

After examining the original order, the developers' replies and the documents on record, the adjudicating officer found that the flat had not been allotted within the stipulated 45-day period.

The adjudicating officer noted that all flats had been sold and none had been allotted to the homebuyers. In these circumstances, the officer observed that a fit and proper person could not be appointed under MahaRERA Circular No. 50 to execute the agreement for sale.

“Since all the flats are sold by the respondents and none of the flat is allotted to the complainant, the fit and proper person cannot be appointed as per circular No. 50 of MahaRERA,” the order recorded.

The adjudicating officer held that the developers had failed to comply with the original order and had not paid interest on ₹17.49 lakh from June 24, 2012, at the rate prescribed under Rule 18.

MahaRERA directed both developers to pay a lump-sum penalty of ₹10 lakh under Section 63 within two months and deposit the amount with the authority. Failure to pay would lead to the issuance of a recovery warrant under Section 40(1) of the Act.

The authority also directed the issuance of a recovery warrant for accrued interest on ₹17.49 lakh from June 24, 2012, along with ₹20,000 in complaint costs.

The concerned District Collector was directed to recover the amounts for payment to the homebuyers and submit a compliance report to MahaRERA.

For Complainants (Madhu Alvani and Bina Kamal Khiani): Advocate Manish Gala.

For Respondent No. 1 (Sai Enterprises): Advocate Abir Patel.

Appearances for respondent No. 2 (Super Construction): Advocate Vinod Talreja.