MahaRERA tribunal ruling to 'greatly disadvantage flat purchasers'

The ruling states that Adjudicating Officer does not have the power to pass refund orders, this may lead to further delay in grievance redressal

Thousands of refund and/or interest orders passed by the Adjudicating Officer of MahaRERA in the past three years have now become a matter of concern for both litigants and their lawyers, after a recent order by the Maharashtra Real Estate Appellate Tribunal, Mumbai. It has stated that the Adjudicating Officer does not have the power to pass refund orders.

Earlier Adjudicating Officers would not only decide compensation, but also grant refund to flat buyers

Legal experts are of the view that this will have serious repercussions for litigants. "Litigant homebuyers will be affected by this decision as orders passed by the Adjudicating Officer (AO) allowing refund and/or interest are now likely to be remanded for reconsideration, leading to a further delay in grievance redressal," explained advocate Akash Menon.

Also Read: Mumbai: 'Registration with RERA no guarantee project is perfect' say legal experts

The Appellate Tribunal in its order dated November 4, cited numerous judgments including an October 16, 2020 order by Punjab and Haryana High Courts, which stated that the Adjudicating Officer is appointed under section 71 and 72 of RERA Act for the purpose of granting compensation only, and does not have jurisdiction to decide on issues pertaining to refund and interest. The power is solely vested with the RERA Authority to decide on the same (refund and interest).

Advocate Menon added, "Under sections 71 and 72 of the Act, the AO only has the jurisdiction to grant/determine compensation and not refund and/or interest. Thus, in a composite complaint with claims for refund, interest and compensation, the authority would first have to determine whether the developer is liable to refund the deposited amount and pay interest thereon. It is only after such determination that the matter can be transferred to the AO to determine the limited aspect of 'compensation'."

'A limited role'
Chartered Accountant Ramesh Prabhu, who is also the founder chairman of MahaSEWA, interpreted the order stating, "The Real Estate Regulatory Authority has all powers to book the promoters /developer for any violation of provisions of RERA, however the adjudicating officer has limited role of determining only compensation, this was not envisaged by RERA across India and therefore, all orders passed by Adjudicating Officers across India, will have serious repercussions."

"As per RERA, the Adjudicating Officers are retired district judges, who look only into cases pertaining to compensation for the loss caused to the flat buyer or the real estate agent or the developer, due to various factors. Earlier the Adjudicating officers would not only decide on compensation, they would also grant refund, and even execute the same," Prabhu said.

MahaRERA has three members, two adjudicating officers, and a secretary. "In the past three years, the total number of complaints filed before MahaRERA was 12,659 cases, of which 8,724 cases have been decided by it. Nearly a thousand of these cases were decided by the AO and are now a cause of concern," said Prabhu. Prabhu suggested that in order to protect the larger interest of the common man, MahaRERA should approach Bombay High Court, challenge the Appellate Tribunal order and get appropriate clarity on the earlier orders passed by the AO.

'Flat buyers disadvantaged'
Advocate Godfrey Pimenta, who also practices in MahaRERA said, "Flat purchasers will be greatly disadvantaged since the Adjudication Officer cannot determine the compensation. For the purposes of determining the compensation the matter has to be referred to the chairperson who will either hear the matter himself or transfer/assign the case to a member of MahaRERA," Pimenta concluded.

Advocate Vinod Sampat, founder of Co-operative Societies Residents' Association said, "This order may be used as an arm-twisting measure by the builder community. The irony is that three years after formation of RERA to bring transparency in the Real Estate industry, there are glitches, which will hit flat buyers harder."

Sampat further opined that the need of the hour is to clarify various clauses in the MahaRERA Act. "Moreover, the noble objective of rendering justice in favour of the flat buyers, as mentioned in MahaRERA Act of disposing complaints within 60 days, as well as, disposing appeals within 60 days, is literally not possible, in fact, there are complaints pending for more than two years, which have not been disposed of," he said.

Sampat said, "The MahaRERA tribunal is now like a typical tribunal whereby it is dominated by professionals and complicated procedures are followed to delay justice to common man. The preamble of RERA Act of regulating and promoting real estate sectors and resolving the disputes related to real estate has become an illusion. Retrospective amendment should be introduced to MahaRERA, so that orders passed by Adjudicating Officers can have validity. It should be ensured that the flat buyers are not involved in complex litigations over technicalities."

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