Promoters Cannot Evade RERA, MOFA Obligations By Terming Flat Payments 'Interest-Free Deposits': Maharashtra RERA

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that purchasers of two flats in the "Godrej Avenue Eleven – Tower B" project were entitled to be treated as allottees and claim interest for delayed possession, even though no agreement for sale had been executed in their favor.

Member Ravindra Deshpande held that the erstwhile promoter, co-promoter, and successor promoter were jointly and severally liable for obligations arising from the project.

"The continuous acknowledgment of the complainants' booking, acceptance of substantial consideration, and identification of specific flats in favour of the complainants sufficiently establish the jural relationship of promoter and allottee under section 2(d) of the Act. In the circumstances, both captioned complainants are held to fall within the definition of 'allottee' under the provisions of the Act," authority observed.

The dispute arose from bookings made in 2010 for Flats B-3903 and B-4203 in a project then known as "Orchid Heights".

The complainants contended that allotment letters dated June 15, 2010 were issued in their favour. They further contended that they paid more than ₹2.11 crore each towards flats priced at ₹7.22 crore apiece.

The project was subsequently known as "One Mahalaxmi Phase 2". It was later taken over by Godrej Residency Private Limited and rebranded as "Godrej Avenue Eleven – Tower B".

The complainants contended that agreements for sale were never executed despite substantial payments and years of correspondence. They also contended that possession was never handed over.

Letters issued on January 27, 2018 and February 2, 2018 informed the complainants that the project had been registered under MahaRERA and that a co-promoter had been inducted. The letters further represented that possession would be handed over by December 31, 2022.

The project, however, has not received an occupancy certificate.

The complaints were filed before MahaRERA on April 20, 2021. Although the complainants initially sought refund of the amounts paid, the complaints were subsequently amended to seek interest for delayed possession and directions for execution of agreements for sale.

During the proceedings, Godrej Residency issued termination letters dated August 7, 2025 alleging that the complainants had failed to come forward for execution of agreements for sale.

The complainants contended that they had paid more than 20% of the consideration. They further contended that the successor promoter had stepped into the shoes of the original developer.

Godrej Residency contended that no agreement for sale existed and that the complainants were not allottees. It further contended that the amounts paid were "interest free deposits". The developer also argued that the complaints were premature because the project's revised completion date stood extended to December 31, 2028.

Rejecting those submissions, the Authority held that transfer of the project to a new promoter did not extinguish liabilities owed to existing purchasers. It held that Neelkamal Realtors Tower Private Limited, Indo Global Soft Solutions and Technologies Pvt. Ltd., and Godrej Residency Private Limited remained jointly and severally liable for obligations arising from the project.

The authority further held that, "Any inter se arrangement between respondent nos. 1 and 3, and any contractual clause or document purporting to waive the promoter's liabilities or statutory obligations cannot defeat the rights of the allottees nor override the mandatory provisions of MOFA and the RERA Act. The statutory obligations under MOFA and the RERA Act cannot be defeated merely by describing the amounts received as an 'interest free deposit'."

The Authority also rejected the contention that the complaints were premature. It held that, although no agreement for sale had been executed, letters issued in January and February 2018 represented that possession would be handed over by December 31, 2022. The Authority therefore treated December 31, 2022 as the agreed date of possession.

"The conduct of the respondents-promoters in accepting substantial consideration without executing an agreement for sale and failing to deliver possession amounts to deficiency in service and violation of statutory obligations under the Act," Deshpande observed.

Allowing both complaints, the Authority directed Godrej Residency Private Limited to execute and register agreements for sale in favour of the complainants within 60 days.

The Authority further held that the complainants were entitled to interest under Rule 18 of the Maharashtra RERA Rules. The interest is payable on the amounts paid towards the flats, excluding taxes, stamp duty, registration fees and other amounts paid to statutory authorities. The interest will run from January 1, 2023 until handover of possession with an occupancy certificate.

The Authority also held that the promoters were not entitled to claim the benefit of the Covid-19 moratorium period. It further directed payment of costs of ₹20,000 to each complainant.

For Complainants/homebuyers: Advocate Aman Arora.

For Respondent (Godrej Residency Private Limited): Advocate Abhijeet Mangade.