Mumbai: ‘Ex-partners’ promises to buyers must be honoured’

The Maharashtra Real Estate Appellate Tribunal recently ruled that current partners must honour contractual obligations made by former partners even after their departure Notably this decision highlights the significance of cash transactions in real estate considering cash received as a crucial component of the total sale consideration ldquoEstablishing proof of the cash component in flat sale transactions can be challenging putting home buyers in a difficult position in many cases but this judgment has duly taken this part too into considerationrdquo said Advocate Godfrey Pimenta who represented the flat buyers in the caseThe appeal Aditya Enterprises Pvt Ltd and Satyendra Vishwakarma a construction partnership in Mulund contested a MahaRERA order from October 30 2019 at the MahaRERA Appellate Tribunal The appellants involved in land development and property sales opposed the order alongside Mrunmai and Mahesh Phadke the allottees Respondent 1 and 2 while Respondent 3 S D Bhalerao an expartner also had a stake in the matter ldquoThe appellants firm grievance was that the authority MahaRERA has violated the principles of natural justice by not extending an opportunity to the promoters of being heardrdquo Adv Pimenta saidFacts of the caseOn January 1 2021 Mrunmai and Mahesh booked a 687 sq ft flat in Shree Sandesh Heights for Rs 6453 lakh paying Rs 10 lakh by cheque and Rs 12 lakh in cash to S D Bhalerao a partner of appellant no 1 firm Despite receiving over 20 per cent of the total price the promoters failed to execute a sale agreement MahaRERA directed appellant no 1 to execute a registered agreement within 30 days but they challenged this order before the MahaRERA Appellate TribunalAlso Read Mumbai Homebuyers seek relief from MahaRera woesAppellants argumentIn challenging the MahaRERA order Adv Nesarikar representing promoters appellant 1 and 2 argued that the Authority failed to provide adequate opportunity for the promoters to respond to the complaint and passed the order hastily based on oral submissions He claimed the authority overlooked key aspects including the legal notice stating the cash payment of R12 lakh to respondent no 3 S D Bhalerao for urgent needs The argument emphasised discrepancies in receipts asserting the R12 lakh receipt as sham with no Ms Aditya Enterprises logo incorrect spelling different addresses and signed by an unauthorised person Additionally it was highlighted that appellant no 2 became a partner after S D Bhaleros resignation as per the Deed of RetirementcumAdmission on February 25 2017Refutes claimAdv Godfrey Pimenta representing the allottees countered the promoters arguments by saying that during the flat booking respondent no 3 was a partner in appellant no 1 firm a fact undisputed by the promoters The payment of Rs 10 lakh to the firm and the issuance of a corresponding receipt was acknowledged by the promoters While the promoters disputed the receipt dated January 22 2014 they did not contest the payment of Rs 12 lakh in cash to respondent no 3 Pimenta noted that the allottees before filing the complaint issued a legal notice asserting the cash payment to respondent no 3 to which the promoters didnt provide any documented reply creating an obligation for the promoters to address and contest the contentionslsquoMahaRERA was correctrsquoAdv Pimenta highlighted that the appellants in their written submission didnt contest the payment of Rs 12 lakh in cash to respondent no 3 He referred to Section 4 of MOFA stressing the obligation on promoters not to accept deposits exceeding 2037 without executing an agreement for sale Despite accepting Rs 22 lakh over 2037 of the total consideration the promoters failed to execute the agreement violating Section 4 of MOFA Pimenta supported MahaRERAs directive for the promoters to execute the agreement and urged the dismissal of the appeal with compensatory costslsquoHad already left firmrsquoAdv Rupali Padgulekar representing respondent no 3 S D Bhalerao argued that while respondent no 3 was a partner during the transaction at the time of the complaint he was no longer associated with appellant no 1 firm Additionally she pointed out that the promoters registered the project with MahaRERA and the webpage doesnt list respondent no 3 as a promoter Consequently she contended that respondent no 3 is not obligated to execute any agreement for sale as he is no longer a partner Padgulekar urged the dismissal of the appeal with costs based on these pointsTribunal order observationIn their written order dated February 28 Shriram Jagtab Member J and Dr K Shivaji Member A examined the pleadings rival submissions and documents presented The key consideration was whether the impugned order warranted interferenceThe Tribunals findings were negative leading to the dismissal of the appeal with a cost of Rs 20000 imposed on the appellants Any pending miscellaneous application was also disposed of and the order is to be communicated to MahaRERA and the respective parties in accordance with Section 444 of the RERA Act 2016