MahaRERA denies relief to Palais Royale flat buyers
The Palais Royale project, promoted by Shree Ram Urban Infrastructure Ltd (SRUIL), was stalled due to multiple PILs. The promoter mortgaged the land to Indiabulls Housing Finance Ltd (IHFL); subsequently, IHFL e-auctioned the land and under-construction building to Honest Shelters Pvt Ltd on June 26, 2019.
MUMBAI: Housing regulator MahaRERA has dismissed as not maintainable two complaints filed by home buyers who purchased apartments in Palais Royale, a luxury housing project in Worli in 2011 and 2013, and denied key reliefs sought on the ground that the new promoter of the project could not be held liable.
The Palais Royale project, promoted by Shree Ram Urban Infrastructure Ltd (SRUIL), was stalled due to multiple PILs. The promoter mortgaged the land to Indiabulls Housing Finance Ltd (IHFL); subsequently, IHFL e-auctioned the land and under-construction building to Honest Shelters Pvt Ltd on June 26, 2019.
In November 2019, a corporate insolvency resolution process was initiated against SRUIL. On March 24, 2021, MahaRERA approved the change of promoter and Honest Shelters Pvt Ltd became the new promoter. The proposed completion date of the project of June 30, 2022 was revised to December 31, 2022 and further extended by a year.
Two flat purchasers, who had booked flats in 2011 and 2013 after paying ₹12.61 crore and ₹27.50 crore, had approached MahaRERA in 2022 seeking multiple reliefs. Their advocates had sought withdrawal of demand letters by Honest Shelters and possession of their apartments. They had also argued that the project was taken over with liabilities by the new promoter under Section 15 of RERA and hence interest for the delay in possession at 24 per cent rate since 2014 should be paid to the buyers.
Advocate Mayur Khandeparkar, appearing for Honest Shelters, argued that RERA’s provisions were retroactive, not retrospective, and hence the liability under Section 18 for handing over possession along with interest on delayed possession would arise only after the expiry of date of completion. He also contended that MahaRERA has not revoked the registration of the project but allowed it to continue by accepting a new promoter.
After hearing the arguments, MahaRERA chairperson Ajoy Mehta observed that the two complainants had filed their complaints in 2022 though their cause of action arose in 2014-15 when the former promoter was in place. He noted that the complainants had chosen not to file the complaints against the former promoter.
Mehta noted that the transfer had been triggered by the due process of law under circumstances wherein the monies advanced by IHFL were to be protected. He said the auction sale certificate made it clear that the promoter-allotee relationship with the former promoter continued up to the date of handing over the project to the new promoter.
“In effect, the execution of the mortgage deed by the lender IHFL to recover its dues and the subsequent sale to the new promoter… has simply transferred the mortgaged property in question with the existing pre-sold premises to the new promoter from the erstwhile promoter. The Authority here would have to make a difference between the transfer of property and the transfer of liabilities and obligations under RERA,” he said in the order dated March 20.
He said all the liabilities and obligations which accrued prior to the handover were, thus, clearly the liability of the former promoter and all actions relating to RERA after the handover would be binding on the new promoter. He said December 31, 2023 would be treated as the completion date, and hence reliefs under Section 18 were not applicable.