The Maharashtra Real Estate Appellate Tribunal (MREAT) has dismissed an appeal for payment of interest filed by a corporate buyer alleging delay in the handing over of an apartment in Mumbai’s Worli area worth more than Rs 3.5 crore, saying that the buyer consciously waived any claims against the developer at the time of taking possession.
The tribunal said that since the waiver was given in writing, the case cannot be considered for relief. In its judgment, MREAT also said that the buyer settled the matter by accepting the amount for rentals, and hence the demand for interest and compensation did not hold well.
The buyer booked flat No. 6001 in B-Wing of the project known as Lodha Park at Worli, Mumbai, for a total consideration of Rs 3,77,85,528. According to the buyer, the agreement for sale was executed on April 5, 2013, and the flat was to give possession on or before December 31, 2017. The buyer also paid 97 percent of the amount before 2017, according to the judgment.
The developer got a part occupancy certificate (OC) on June 13, 2019, and issued a possession demand letter (PDL) dated December 27, 2019, asking the buyers to pay the balance amount to take possession of the flat.
However, alleging that the developer failed to hand over possession as agreed, the buyer filed a complaint with Maharashtra Real Estate Regulatory Authority (MahaRERA) in February 2020 under several sections including Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA), saying it wanted to withdraw from the agreement and seeking a refund of money plus taxes, stamp duty paid towards the flat along with interest from April 5, 2013, to January 31, 2020.
However, the developer challenged the maintainability of the complaint filed in February 2020 terming it premature, and claiming that the possession date as per the agreement was December 2020. The developer said it was the buyer, who needed accommodation in Mumbai for one of its partners, who took possession on October 21, 2020, by paying the balance 3 percent.
The developer argued that at the time of handing over the possession, the buyer executed a key handover letter (KHO) letter that read, “In accordance with the possession demand letter, rental offset amounting to Rs 15,42,667 has been offered and accepted by you and the unit has been delivered in accordance with the Agreement. Accordingly, you have no outstanding grievances against the company and waive any claims against the company in respect of or in connection with the handover of possession of your Unit. We request you to sign this letter confirming your acceptance of the terms and conditions mentioned above.”
What after taking possession?
After taking possession, the buyer dropped the relief for refund plea sought in the complaint but still pressed for relief of interest for the alleged delayed possession for 33 months from December 31, 2017, to October 21, 2020, alleging that the flat was not handed over by December 2017. The buyer also contended in the complaint proceeding that possession was taken under protest.
The buyer also said that by signing the possession letter, the buyer never agreed to withdraw the complaint or relief sought therein for interest and compensation.
However, the developer argued before the MREAT that the buyer had expressly waived rights against the developer by signing the KHO letter, adding that the buyer had accepted the rental offset and had no grievance outstanding against the developer.
The MREAT order
The MREAT in its judgment dated July 15, 2022, that was uploaded on the MahaRERA website on July 22, stated, “To determine the controversy on hand with regard to entitlement of Allottee to interest and compensation on account of delay in possession, it is necessary to examine whether the manner in which possession is taken by Allottee amounts to a conscious waiver of its rights under Section 18 of RERA.”
It added, “It is seen that the letter signed by Allottee (buyer) is not a pre-drafted and standard letter which is often seen executed in the real estate market by the parties without there being necessarily any conscious indulgence on the part of Allottees (buyers) to give up or waive the claims against Promoter at the time of taking possession. The mention of acceptance of rental offset amount, preceding the event of taking possession and waiving the claims against Promoter (developer) makes the letter different from the letters routinely signed possession letters to signify that parties have settled the ongoing dispute between them and possession is delivered/taken for consideration.”
The order said that with a specific amount as mentioned, signing the letter denotes a prior understanding between the parties reflected in waiver of claims/grievance which can be termed as a conscious and well-considered act only and “not an unconscious or unintentional act as Allottee (buyer) is trying to make it to be. The buyer has waived any claim specifically in respect of the handover of possession of the unit. Therefore, in the aforesaid facts and circumstances, it can be safely concluded that Allottee has consciously waived its claim against the Promoter towards delay in possession.”
Buyer asked to pay Rs 20,000 in costsIn the judgment, the tribunal added, “Allottee (buyer) had settled the matter regarding delay by accepting the amount for rentals, therefore, nothing survived actually in the complaint for considering interest and compensation under Section 18 of RERA. Accordingly, the complaint was actually rendered infructuous. In view thereof, there is no infirmity in the view taken by the Authority and the complaint has been rightly dismissed as being infructuous. Appellant/Allottee (buyer) to pay costs of Rs. 20,000 to Respondent / Promoter (developer).