MahaRERA strikes down builder’s unilateral cancellation clause, orders interest for delayed possession in Pune project

Gade had booked a flat in August 2021 and paid around Rs 42.65 lakh against the total consideration of Rs 44.90 lakh.

Under the registered agreement for sale, possession was to be handed over by September 30, 2023. The deadline, however, was not met.

A key issue before the Authority was Clause 7(G) of the agreement, which authorised a builder’s employee, acting as the buyer’s Power of Attorney holder, to execute and register a cancellation deed if the developer alleged a breach of contract by the allottee.

Representing the complainant, Advocate Rahul Kankariya argued that the clause had been incorporated without informed consent and amounted to an unfair contractual term.

“MahaRERA accepted the contention and held the clause to be illegal and unenforceable, observing that it bypassed the statutory procedure for termination laid down under the RERA Act and MahaRERA Order No. 38/2022,” he said.

The developer argued before RERA that the project timeline had been revised on the MahaRERA portal and also alleged payment defaults by the buyer. RERA rejected the submissions, Kankariya said.

MahaRERA directed the developer to pay interest for the delay from October 1, 2023, until lawful physical possession is handed over along with a valid Occupancy Certificate.

The Authority also ordered the developer to form a co-operative housing society in accordance with Section 11(4)(e) of the RERA Act and awarded Rs 20,000 towards litigation costs.