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5-Crore Compensation Awarded by the Maharashtra RERA Appellate Tribunal Upheld by Bombay HC

By Meghna Mishra      29 September, 2020 03:45 PM      0 Comments
Maharashtra RERA Bombay HC

The INR 5 Crore compensation that was to be given to a party who had not been handed over the possession of a certain property even after a delay over around 80 months was upheld by The Bombay High Court. Justice SC Gupte passed the order and dismissed the second appeal. The present matter was filed by Renaissance Infrastructure Ltd. i.e. the promoters, who were represented by Senior Advocate Prasad Dani along with Advocate Sachin Pawar.

In the current dispute, Renaissance failed to provide possession of the property in 2010. This violated the terms of the contract between the Renaissance and the purchasers. The compensation was calculated by the RERA Authority in accordance with the agreement. The Authority valued the compensation to be amounting to INR 5.04 Crore. The decision was taken in the favour of the purchases.

This decision was challenged by the Renaissance before the appellant Tribunal which ordered the Renaissance to deposit 50 % of the compensation. This was ordered in accordance with Section 43(5) of the Real Estate (Regulation and Development) Act, 2016

Section 43(5) of the Real Estate(Regulation and Development) Act, 2016 reads as “Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:

Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal at least thirty percent. of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be before the said appeal is heard.” 

The appeal was dismissed on non-payment of the pre-deposit

Senior Advocate Dani presented the following points before the High Court

“1. That the agreement between the Renaissance and the purchaser was in lieu of a partnership, hence Renaissance was not a promoter.

2. That original claim of the purchasers was devoid of merits.

3. That the challenged order was in the nature of liquidated damages, which the authority has no jurisdiction over.” 

However, Justice Gupte did not find any infirmities in the orders of The RERA Authority and the RERA Appellate Tribunal. The Bench also held that the Renaissance was developing plots and that it was liable to hand over the property, regardless of the purchaser being a former partner.

The Bench stated, “under this agreement, termed as 'agreement for sale', the Appellant was bound to hand over possession of the suit premises to the Respondent within an agreed period” and thus the agreement is “nothing less than an agreement for sale”. 

Senior Advocate Dani applied for a stay of this order but it was rejected. 


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