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Journalism of Courage
In a major relief to the joint buyers of a property who had executed an agreement for sale in 2006 to purchase an apartment in a Bandra-based project but were denied possession by the developer, the Maharashtra Real Estate Appellate Tribunal, Mumbai recently asked the developer to pay an interest of 2 per cent on the amount paid by the buyers. The amount is to be calculated from 2008 till the actual possession of the flat.
The amount of interest can be made adjustable at the time of possession against the balance amount to be paid by the homebuyers. The developer was also asked to pay Rs 20,000 to the homebuyers.
At the time of the execution of the sale agreement, the flat was priced at Rs 44.76 lakh. The developer had denied possession of the flat on the grounds that project cost had escalated owing to the cessation of construction work for 10 years and had sought the buyers to pay the ‘escalated price’.
The project was issued a stop work notice by the Brihanmumbai Municipal Corporation (BMC) following directions of the forest conservator in 2006. The land under the project was declared a forest. Thereafter, the developer and several other affected developers filed a plea in the Bombay High Court. However, no relief was granted and, therefore, they approached the Supreme Court. The apex court vacated the stay on the construction in 2014.
The developer resumed the construction work in 2015-16. Claiming that the price of the project increased substantially owing to the delay in construction, the developer asked the purchasers to pay an additional amount.
The homebuyers declined to pay the additional cost and on the contrary demanded interest along with compensation for the delay in handing over the possession of the flat.
The homebuyers argued that it was the responsibility of the developer to take all steps to have a clear title of the land before starting the work and it cannot charge the buyers for the delay.
Whereas, the developer contended that the delay caused was beyond its control and it further alleged that the homebuyers had defaulted in payment.
The appellate tribunal dismissed the developer’s plea.
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