Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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BEFORE THE MAHARASHTRA REAL ESTATE REGULATORY AUTHORITY, MUMBAI

1. Complaint No. CC005000000208211

1. M/s Vijayalaxmi Developers & Anr

2. Mr Dilip Chordiya


.... Complainants

Versus

1. River Residency Developers AOP

2. Ishwar Construction Pvt Ltd

3. Trade Centre Developers and Builders Pvt Ltd
.... Respondents

MahaRERA Project Registration No. P52100012745

Along with

2. Complaint No. CC005000000208213

1. M/s Vijayalaxmi Developers & Anr

2. Mr Dilip Chordiya


.... Complainants

Versus

1. River Residency Developers AOP

2. Ishwar Construction Pvt Ltd

3. Trade Centre Developers and Builders Pvt Ltd
.... Respondents

MahaRERA Project Registration No. P52100015059

Along with

3. Complaint No. CC005000000208214

1. M/s Vijayalaxmi Developers & Anr

2. Mr Dilip Chordiya


.... Complainants

Versus

1. River Residency Developers AOP

2. Ishwar Construction Pvt Ltd


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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3. Trade Centre Developers and Builders Pvt Ltd
.... Respondents

MahaRERA Project Registration No. P52100024063


Coram: Shri. Mahesh Pathak, Hon’ble Member – I/ MahaRERA

C.A. Ashwin Shah along with Ld. Adv. Reema Desai appeared for the
complainants.
Ld. Adv. Khushboo Asrani appeared for the respondent no. 1.

ORDER
(Monday, 10th July 2023)

(Through Video Conferencing)


1. The complainants above named have filed these 3 online complaints
before the MahaRERA on 01-02-2023 seeking various reliefs against the
respondents - promoter as prescribed under the provisions of the Real
Estate (Regulation & Development) Act, 2016 (hereinafter referred to as
‘RERA’) in respect of the respondent no. 1’s three registered projects
known as “River Residency Phase IV Building N” bearing
MahaRERA
project registration No. P52100012745
, “River Residency Phase Iv
Building S” bearing
MahaRERA project registration No. P52100015059
,
“RR Business Centre” bearing
MahaRERA project registration No.
P51800012208
, located at Moshi, Dist. Pune.

2. These complaints were heard on 03-04-2023 as “First Hearing Matter” as
per the Standard Operating Procedure dated 12-06-2020 issued by
MahaRERA for hearing of complaints through Video Conferencing. Both


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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the parties have been issued prior intimation of this hearing and they
were also informed to file their written submissions if any. Accordingly,
both the parties appeared and made their submissions. The MahaRERA
heard the arguments of both the parties and also pursued the available
records.

3. After hearing the arguments of both the parties, the following Roznama
was recorded in this complaint -
“The complainant is present. The respondent no. 1 is present.
At the outset, MahaRERA has pointed out that the complainant has
filed a complaint before the Economic Offences Wing (EOW) in April

2022. Moreover, an application has also been filed for initiation of
arbitration
proceedings
between
the
complainant
and
the
respondents in January 2023 before the Civil Court, Pune. Therefore,
the prayers of the complainant arose from the development
agreement signed between the complainant and the respondents on
11-05-2010 which are already part of the complaint before EOW as
well as the arbitration proceedings. Therefore, the MahaRERA has
pointed out to the complainant that to file a pursis regarding the
maintainability of these complaints within the next one week i.e. by
10-04-2023. The respondents may file their reply to the said pursis
within the subsequent one week i.e., by 17-04-2023.
The matters are reserved for order on the issue of maintainability
suitably after 17-04-2023 based on the arguments made today by both
the parties as well as the pursis, reply filed by the respondent. The
future course of action in these complaints will be decided once such


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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an order on maintainability is issued.”

4. Pursuant to the aforesaid directions, the complainants have uploaded
their written submissions regarding the maintainability of these
complaints on record of MahaRERA on 11-04-2023. The respondents
have also uploaded its preliminary reply on maintainability of these
complaints on record of MahaRERA on 20-06-2023. The same are
accepted and taken on record.

5. On the issue of maintainability of these complaints, the complainants
have stated that they are the landowners who have entered into a Joint
Venture Agreement dated 11-05-2010 and supplementary Joint Venture
Agreement dated 30-08-2016 with the respondent nos. 2 and 3 for
development of the land admeasuring about 23 Hectors 10 Acres situated
at village Chikali, Taluka Haveli, District Pune in four phases. The project
was to be known as “River Residency” (“JV entity”). The complainants
further stated that these complaints were filed regarding the illegalities
perpetrated by the respondents towards 3 Phases of the development of
the said property. Under the said Joint Venture Agreements, the said
respondents undertook to develop a portion of the property. In terms of
the Joint venture, they were entitled to raise bridge finance for the said
project by mortgaging the phase of the said property in their possession
for construction. As per clause 4 (B) (u) of the said Joint Venture
Agreement , the said respondents could not avail bridge finance in excess
of the balance refundable security deposit amounting Rs. 11,00,00,000/-.


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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If any finances were raised, these finances were to be paid by the
respondents alone. In compliance with the obligations under said Joint
Venture Agreement, the complainants executed a general Power of
Attorney dated 11-05-2010 in favour of respondent nos. 2 and 3, granting
them the powers to raise bridge finance for the said project for sole
purpose of construction and completion of the project. Subsequently,
upon insistence on part of the said respondents, the complainants
executed a specific power of attorney dated 03-08-2017, authorizing them
to avail loans and finances in the name of the “JV entity” for the project.
The prior permission was also mandated of the complainants. The said
respondents were entitled to raise finances only in the name of the “JV
entity” and not to the fraudulent of AOP being respondent no. 1. The “JV
entity” comprises of the landowners (complainants) as well as the
respondents. However, the fraudulent AOP being respondent no. 1
comprises of only the developers and its directors. The complainants
further stated that, the respondents misused the Specific Power of
Attorney dated 03-08-2017 and in breach of the said Joint Venture
Agreement, availed loans from L&T Housing Finance Limited and LIC
Housing Finance Limited. The complainants informally learnt that the
said respondents had availed project finance from L&T and in doing so
had encumbered the project land. After several inquiries with the
respondents, on 16-08-2018, the complainants received an email from one
of the developers’ erstwhile director attaching the “Term sheet/ Sanction
Letter” dated 09-03-2017, which disclosed the respondents fraudulently
availed loan facilities from L&T even prior to execution of the said


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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specific power of attorney dated 3-08-2017. The L&T sanction letter
revealed that, out of availed loan of Rs. 80,00,00,000/- only Rs.
34,00,00,000/- was utilized towards the project. The remaining portion of
Rs. 31,00,00,000/- was to utilized to pay liabilities of the respondents
arising out of a loan availed from one M/s. Reliance Home finances Ltd.
The balance amount of Rs. 15,00,00,000/- was availed by the respondents
towards investment in other companies owned by the respondents. The
respondents created an unlawful mortgage vide “Mortgage Deed” dated
06-04-2017 on the project land and all the receivables to secure the L&T
loan. After various discussions between the parties, the respondents
assured the complainants that they would refrain from encumbering the
project land or the premises to be constructed and the revenue generated
from the said project without the express consent of the complainants.
However, around 2019, upon conducting online search, it came across a
deed of reconveyance dated 12-10-2018 executed between L&T and the
respondents, whereby the L&T had issued a no dues certificate in the
name of one “River Residency Developers” (fraudulent AOP) which
comprised of the developers and its directors. The said AOP has no
nexus with the complainants but bears a similar name to the “JV entity”.
The complainants contended that, the illegalities perpetrated by the
respondents and their erstwhile directors were further borne by the fact
that after creating the fraudulent AOP, they projected the PAN card of
the “JV entity” to be that of fraudulent AOP, solely to avoid any personal
liability. Further, to avail finances the respondents have used PAN card
of the “JV entity” without the consent of the complainants. This shows


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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that the respondents have fraudulently and through misrepresentation
obtained finances in the name of fraudulent AOP, while trying to portray
it to be a loan availed towards the said project by the “JV entity”.

6. The complainants further contended that an erstwhile director of
respondent nos. 2 and 3 provided a sanction letter of LIC dated 18-09-
2018, loan agreement dated 05-10-2018 and amended sanction letter and
loan agreement dated 15-10-2018, wherein it was clearly visible that, the
loan of Rs. 95,00,00,000/- was availed by fraudulent AOP, out of which
Rs. 45,64,00,000/- was utilised towards taking over the loan granted by
L&T and the balance amount was utilised towards the development of
the said property. This entity was not connected in any manner to raise
funds in the name of the said project. The respondents have illegally and
fraudulently created a mortgage by executing an indenture of mortgage
dated 25-10-2018, where this AOP acted as the mortgagor and the
respondents, and their directors acted as co-mortgagor. The respondents
have no right to create or execute any charge on the project land. By the
said illegal act of the respondent clearly shows that the respondents had
siphoned off the funds received from LIC. The ill intentions of the
respondents are also evident by several complaints filed by the allottees
which reveals the respondents misuse of the funds, wherein the reliefs
sought by the allottees also included forensic audit of the entire project
in order to ascertain that, how the respondents have siphoned the funds.
The perusal of the said agreements also reveals that, the landowners had
no role in the development of the said project and it was solely the


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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respondent’s responsibility of the development. The complainants
contended that, if the reliefs of the complainants are not granted and the
forensic audit is not conducted, the illegal purported encumbrance
created by the respondent in favour of LIC will prejudice the rights and
interest of the bona fide purchasers. The RERA being a welfare legislation
enacted with a view to safeguard the interest of the home buyers it can
grant investigation and call for information under section 35 of the
RERA. The powers granted to MahaRERA are in addition to the
provisions of any other statute and not in derogation of the provisions of
other statues as per Section 88 of the RERA. The complainants have also
filed complaint before District Court of Pune and before Economic
Offence Wing of PCMC. Further, a petition under section 9 of the
Arbitration and Conciliation Act, 1996 has been also filed by the
complainants which are on different grounds and do not have any
commonality with these complaints. The only remedy of the
complainants is to ascertain as to where the funds were utilised by the
respondents. The respondents have used unfair means to promote
themselves and made false promises to lure the public to invest their
money in the said project. The complainants have also relied upon
several judgements passed by Hon’ble Delhi High Court in Ankur
Exports Pvt. Ltd vs Monopolies and restrictive Trade Practices
Commission. Further, in the

JUDGMENT

passed by The Hon’ble Supreme
Court in Transcore vs Union of India wherein it specifically observed the
doctrine of election of remedies. Therefore, the complainants stated that
these complaints are maintainable under the provisions of RERA and


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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the facts set out with respect to the said project and siphoned off monies
and diversions of funds are evident of the respondents’ illegality. Hence,
in order to ascertain the veracity and validity of the purported third-
party rights over the said project, forensic audit of the entire project
should be ordered. Hence, the complainants prayed to hear these
complaints on merits.

7. The respondents on the other hand refuted the contentions of the
complainants and uploaded a preliminary reply on maintainability on
20-06-2023 on record of MahaRERA. They have contended that, these
complaints are not maintainable on various ground nor sustainable in
the eyes of law, which is not in accordance with the provisions of law.
There was no cause of action which ever arose to the complainants to file
these complaints and therefore the same are liable to be dismissed for
want of cause of action. The respondents further contended that,
respondent no. 1 was formed collectively by the respondent nos. 2 and 3
which is an “Association of Persons” of the said project. The respondent
nos. 2 and 3 are the companies. The respondents and the complainants
executed a Joint Venture dated 11-05-2010 and further supplementary
Joint venture agreement was executed dated 30-08-2016 wherein
promotership and development rights were delivered to respondent no.

1. The relationship of the complainants and the respondents is of
“Promoters” and “Co-Promoters” and disputes between the same were
not covered under the ambit of RERA. Accordingly, the complainants
have no locus standi and the MahaRERA is not in a right position to hear


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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the present complaints, due to lack of jurisdiction to entertain these
complaints in the present form to provide reliefs sought by the
complainants. The complainants have filed these complaints with a mere
intention to vex them as it is very perspicuous as per the Act and law that
the issues forming the subject matter of these complaints alleging the
frauds such as Power of Attorney, transactions of the promoter
organization with a third party and siphoning of the funds answerable
to a joint venture are not triable under RERA. Hence, these complaints
should be dismissed with costs. The respondents further contended that,
assuming the arguments of the complainants that the complaint being
maintainable and the MahaRERA is well within jurisdiction holds
authority to deliver the reliefs. Further, the complainants before
reproducing any of the clauses of the said Joint Venture agreement,
should ideally have applied their ordinary diligence and referred to the
clause no. 24(a) of the said agreement which perspicuously provided for
amicable resolution wherein the parties to the said agreement shall
appoint a representative through which disputes arising out of the said
agreement shall be resolved amicably. The said clause 24 is reproduced
herein “ a) Amicable Resolution: In the event of any dispute or difference
between the owner and the developer in respect of or concerning or connected
with the interpretation or implementation or arising out of this Agreement or
any clause or provision hereof, or relating to the termination hereof, then such
dispute or difference shall in the first instance be resolved amicably by the
nominated representatives of the Parties”. Therefore, the complainants as per
the said agreement cannot initiate any legal proceedings under any Act


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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or law against the respondents without complying with the clause 24(a)
of the said agreement. The respondents therefore stated that these
complaints in the present form are neither maintainable nor admissible.
Therefore, the respondents prayed for dismissal of these complaints
with costs.

8. The MahaRERA has examined the rival submissions made by both the
parties on the issue of maintainability of these complaints raised by the
MahaRERA during the course of hearing held on 03-04-2023. Hence, the
MahaRERA before going into the merits of these complaints has to
decide the same being a preliminary issue.

9. The complainants who are the owners of the project land have
approached MahaRERA mainly agitating their grievances with respect
to 3 separate projects bearing Nos. P52100012745, P52100015059, and
P51800012208, located at Moshi, Dist. Pune. All these 3 projects are
located on the same layout, but same is registered in 3 different phases.
The complainants are mainly seeking following reliefs in these
complaints:-
“a. that this Ld. Authority be pleased to appoint a Forensic Auditor to
inquire into the affairs of Respondent Nos. 1 to 3;
b. that without prejudice to prayer clause (a) and in addition thereto,
this Ld. Authority, direct Respondent Nos. 2 & 3 to disclose on oath and
furnish information details of all third-party dealings and statement of
disbursement and utilization of funds so disbursed by M/s. Reliance
Home Finances Ltd., L&T and LIC, books of accounts in relation to the


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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said Project within two weeks from the date of an order to this effect;
c. that without prejudice to prayer clauses (a) and (b) and in addition
thereto, this Ld. Authority direct Respondent Nos. 2 & 3 to disclose on
oath Respondent No.1’s statement of accounts, as well as the receipt and
utilization of funds by Respondent No. 1 including but not limited to
bank statements of the escrow account and other bank accounts opened
in the name of Respondent No. 1, within two weeks from the date of an
order to this effect;
d. that without prejudice to prayer clauses (a) to (c) and in addition
thereto, this Ld. Authority direct the Respondents to disclose on oath the
quarterly report of completion and construction and annual audit
statement of accounts of the said Project in compliance with Section 11
of the Real Estate (Regulation and Development) Act, 2016;
e. that without prejudice to prayer clauses (a) to (d) and in addition
thereto, this Ld. Authority be pleased to freeze the escrow account in the
name of Respondent No.1 i.e., Riverside Residency Developers AOP
bearing no. 57500000241150 with HDFC bank, Boat Club Branch Pune
and restrain the members of the AOP viz. River Residency Developers
from operating the aforesaid account;
f. that this Ld. Authority in addition to all the above prayers be pleased
to renew and extend the registration of the said Project for a period of
one year as per the provisions of the Section 5 and 6 of the Real Estate
(Regulation and Development) Act, 2016.
g. that this Ld. Authority direct the Respondents to pay and reimburse
all legal cost, advocates’ fees, out of pocket expenses, incurred and to be
incurred in future by the Complainants towards the pursuit of legal


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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remedies and enforcement of its rights under law and in equity;
h. for such further and other reliefs as this adjudicating authority may
deem fit and proper in the facts and circumstances of the case.
i. that ad-interim reliefs in terms hereof to be granted.”

10. The respondent no. 1 is the “Association of Persons”(AOP), which has
registered these projects with the MahaRERA (in phases) and the
respondent nos. 2 and 3 are the members of the respondent no. 1 , AOP
(hereinafter referred to as the respondent). The complainants have also
been shown as co-promoter of these projects having revenue sharing in
these projects as per the web page information uploaded by the
respondent on MahaRERA website.

11. Admittedly, the complainants have assigned the development rights to
the respondent promoter for development of their land by virtue of the
Joint Development Agreement dated 12-05-2010 on certain terms and
conditions stipulated therein. Accordingly, the respondent has started
implementation of the said project and it appears that it has completed
part portion of this project viz 3 phases and the phase 4 is registered with
MahaRERA in 3 different phases.

12. The complainants by filing these complaints are mainly seeking direction
to appoint a Forensic Auditor to inquire into the affairs of respondent,
alleging that there is mismanagement in utilization of funds so disbursed
by M/s. Reliance Home Finances Ltd., L&T and LIC, books of accounts


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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in relation to the said projects. The complainants have also alleged that
the respondent has siphoned of the money borrowed from the financial
institution for uses other than this project and also to clear its personal
liabilities.

13. Admittedly, there is ongoing dispute between the complainants and the
respondent on certain issues with respect to the alleged financial
indiscipline due to which the complainants have already approached
the EOW against the respondent. Further there is ongoing arbitration
proceedings filed before the Civil Court at Pune as per the arbitration
clause mentioned in the said Joint Venture Agreement. The said
proceedings would take their own recourse under the applicable law.

14. As far as these complaints are concerned, the MahaRERA during the first
hearing held on 3-04-2023 observed that there are other parallel
proceedings going on between the parties before the EOW and the Civil
Court therefore these complaints filed under RERA are not maintainable.
However, after going through the submissions made by the
complainants, it appears that although there is alleged breach of terms
and conditions of the said Joint Venture Agreement dated 12-05-2010
duly signed by both the parties, in these complaints the complainants
have mainly raised the issue of siphoning of fund borrowed for
completion of this project. In short, the complainants have mainly alleged
that the respondent is not maintaining the financial discipline in the
project.


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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15. In this regard, the MahaRERA is of the view that keeping in mind the
dispute between the complainants and the respondent by virtue of the
said Joint Venture Agreement, which in any case, the MahaRERA is not
going to entertain in these complaints being civil in nature. As the
MahaRERA has no jurisdiction to entertain such disputes which is of
civil in nature, as the RERA legislation is certainly not meant for
protecting the civil rights of the private parties as the jurisdiction lies
with the appropriate civil court of law.

16. However, in this case considering the specific reliefs sought by the
complainants in these complaints, the MahaRERA is of the view that the
basic aims of the RERA, is not only to protect the interest of the
allottees/purchasers in the real estate sector, but to ensure efficient and
transparent sale of plots, apartments and buildings, as the case may be,
as a Regulatory Authority for regulation and promotion of real estate
sector. Further, the RERA has one of the key components which provides
that the promoter should maintain the financial discipline while
implementing the project.

17. Hence, the MahaRERA (Authority) is constituted to promote and to
regulate the real estate sector. While promotion and regulation of the real
estate sector, the MahaRERA has to ensure that all basic key components
for which the RERA is enacted should be implemented properly.


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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18. Likewise, in this case, the complainants have brought the issue of
financial indiscipline and siphoning of fund raised from the financial
institutions borrowed for the purpose of completion of this project.
Although, the complainants are most affected parties for such alleged
act on the part of the respondent, simultaneously, it is not in the interest
of the project and the allottees who have booked their units in these 3
phases of this project.

19. In this regard, the MahaRERA has perused the relevant provision of
section 11 (g) of the RERA which talks about the duties of the promoter.
The same read as under:-
“11 (h) after he executes an agreement for sale for any apartment, plot or
building, as the case may be, not mortgage or create a charge on such
apartment, plot or building, as the case may be, and if any such mortgage
or charge is made or created then notwithstanding anything contained
in any other law for the time being in force, it shall not affect the right
and interest of the allottee who has taken or agreed to take such
apartment, plot or building, as the case may be”;

20. In view of the aforesaid explicit provisions under RERA which cast duty
upon the promoter not to mortgage any plot/or building after he
executes the agreement for sale with the allottee. However, in this case,
the respondent has borrowed the loan from the financial institutions viz
L &T and LIC Housing Finance by creating the mortgage in the said
project property. Hence, to ensure, whether the respondent has not
violated the aforesaid explicit provisions of the RERA, the MahaRERA


Complaint No. CC005000000208211

CC005000000208213
CC005000000208214

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prima facie feels that this issue has to be looked into by the MahaRERA
as brought to the notice of the MahaRERA by the complainants herein in
these complaints.

21. In view of these facts and to decide this issue only (on merits), the
MahaRERA prima facie feels these complaints are maintainable before
the MahaRERA.

22. In view of these facts, the following order is passed:-
a. These complaints are held to be maintainable to ensure the
financial discipline in these projects by the respondent as
provided under section 11 (g) of the RERA.
b. Accordingly, it is directed that these complaints be scheduled
for next hearing as per their seniority to decide the said issue at
(a) above on merits.
c. Needless to state here that the MahaRERA is not going to
decide the internal disputes between the complainants and the
respondent by virtue of the Joint Development Agreement
dated 12-05-2010, which is of civil in nature.


(Mahesh Pathak)
Member – 1/MahaRERA


Rectification in
Complaint No. CC005000000208211
and 2 Other complaints

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Page 1 of 6
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BEFORE THE MAHARASHTRA REAL ESTATE REGULATORY
AUTHORITY, MUMBAI

1. Complaint No. CC005000000208211

M/s Vijayalaxmi Developers & Anr


... Complainant/s

Versus

River Residency Developers AOP
and Ors


... Respondent/s

MahaRERA Project Registration No. P52100012745

2. Complaint No. CC005000000208213

M/s Vijayalaxmi Developers & Anr


... Complainant/s

Versus

River Residency Developers AOP and Ors


... Respondent/s

MahaRERA Project Registration No. P52100015059

3. Complaint No. CC005000000208214

M/s Vijayalaxmi Developers & Anr


... Complainant/s

Versus

River Residency Developers AOP
and Ors


... Respondent/s

MahaRERA Project Registration No. P52100024063


Coram: Shri. Mahesh Pathak, Hon’ble Member – I/MahaRERA

Ld. Advocate Reema Desai appeared for the complainant.
Ld. Adv. Parth Chande appeared for the respondent nos. 1 to 3 viz the promoters.
.

SUO – MOTU ORDER FOR THE RECTIFICATION OF

INTERIM ORDER


DATED 10-07-2023.
(Wednesday, 07th August 2024)

1. The complainant had filed these 3 separate complaints before the MahaRERA

Rectification in
Complaint No. CC005000000208211
and 2 Other complaints

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seeking various reliefs against the respondent – promoter as per the provisions of
the Real Estate (Regulation & Development) Act, 2016 (hereinafter referred to as
‘RERA’).

2. The aforesaid complaints were heard by the MahaRERA on 03-04-2023 and
accordingly an

INTERIM ORDER

dated 10-07-2023 was issued by the MahaRERA on
the issue of maintainability of these complaints under the provisions of the RERA.
The relevant portion of the said order reads as under:-
“16. However, in this case considering the specific reliefs sought by the
complainants in these complaints, the MahaRERA is of the view that the basic
aims of the RERA, is not only to protect the interest of the allottees/purchasers
in the real estate sector, but to ensure efficient and transparent sale of plots,
apartments and buildings, as the case may be, as a Regulatory Authority for
regulation and promotion of real estate sector. Further, the RERA has one of the
key components which provides that the promoter should maintain the financial
discipline while implementing the project.

17. Hence, the MahaRERA (Authority) is constituted to promote and to
regulate the real estate sector. While promotion and regulation of the real estate
sector, the MahaRERA has to ensure that all basic key components for which the
RERA is enacted should be implemented properly.

18. Likewise, in this case, the complainants have brought the issue of financial
indiscipline and siphoning of fund raised from the financial institutions
borrowed for the purpose of completion of this project. Although, the
complainants are most affected parties for such alleged act on the part of the
respondent, simultaneously, it is not in the interest of the project and the
allottees who have booked their units in these 3 phases of this project.

Rectification in
Complaint No. CC005000000208211
and 2 Other complaints

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19. In this regard, the MahaRERA has perused the relevant provision of section
11 (g) of the RERA which talks about the duties of the promoter. The same
read as under:-
“11 (h) after he executes an agreement for sale for any apartment, plot or
building, as the case may be, not mortgage or create a charge on such
apartment, plot or building, as the case may be, and if any such mortgage
or charge is made or created then notwithstanding anything contained
in any other law for the time being in force, it shall not affect the right
and interest of the allottee who has taken or agreed to take such
apartment, plot or building, as the case may be”;

20. In view of the aforesaid explicit provisions under RERA which cast duty
upon the promoter not to mortgage any plot/or building after he executes the
agreement for sale with the allottee. However, in this case, the respondent has
borrowed the loan from the financial institutions viz L &T and LIC Housing
Finance by creating the mortgage in the said project property. Hence, to
ensure, whether the respondent has not violated the aforesaid explicit
provisions of the RERA, the MahaRERA prima facie feels that this issue has
to be looked into by the MahaRERA as brought to the notice of the
MahaRERA by the complainants herein in these complaints.

21. In view of these facts and to decide this issue only (on merits), the MahaRERA
prima facie feels these complaints are maintainable before the MahaRERA.

22. In view of these facts, the following order is passed:-
a. These complaints are held to be maintainable to ensure the financial

Rectification in
Complaint No. CC005000000208211
and 2 Other complaints

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discipline in these projects by the respondent as provided under section
11 (g) of the RERA.
b. Accordingly, it is directed that these complaints be scheduled for next
hearing as per their seniority to decide the said issue at (a) above on
merits.
c. Needless to state here that the MahaRERA is not going to decide the
internal disputes between the complainants and the respondent by
virtue of the Joint Development Agreement dated 12-05-2010, which
is of civil in nature”.

18. Thereafter, these complaints were again heard by the MahaRERA today, in
presence of all the parties concerned as per the appearances recorded in the cause
title of this order.

19. During the course of hearing , the MahaRERA has noticed that while passing
the said

INTERIM ORDER

, inadvertently in para 19 and para 22 (a) of the said order
, only section 11(g) of the RERA is mentioned. However, section 11(h) of the
RERA under which the complainant is seeking reliefs from the MahaRERA has
not been mentioned. The MahaRERA feels it proper to rectify the said error,
which in fact is a typographical error by invoking the power under section 39 of
the RERA. During the course of the hearing both the parties agreed for such
rectification.

20. In view of the above following order is passed: -
a. Section 11 (g) and 11(h) of RERA both are added in Para 19 and 22(a) of the
said

INTERIM ORDER

.
b. Accordingly, after such rectification the said corrected para nos. 19 and 22(a)
of the said orders be read as under-
“19. In this regard, the MahaRERA has perused the relevant provision of
section 11 (g) and 11 (h) of the RERA which talks about the duties of the

Rectification in
Complaint No. CC005000000208211
and 2 Other complaints

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promoter. The same read as under :-
11 (g) pay all outgoings until he transfers the physical possession of the real
estate project to the allottee or the associations of allottees, as the case may
be, which he has collected from the allottees, for the payment of outgoings
(including land cost, ground rent, municipal or other local taxes, charges for
water or electricity, maintenance charges, including mortgage loan and
interest on mortgages or other encumbrances and such other liabilities
payable to competent authorities, banks and financial institutions, which
are related to the project): Provided that where any promoter fails to pay all
or any of the outgoings collected by him from the allottees or any liability,
mortgage loan and interest thereon before transferring the real estate project
to such allottees, or the association of the allottees, as the case may be, the
promoter shall continue to be liable, even after the transfer of the property,
to pay such outgoings and penal charges, if any, to the authority or person
to whom they are payable and be liable for the cost of any legal proceedings
which may be taken therefor by such authority or person;
11 (h) after he executes an agreement for sale for any apartment, plot or
building, as the case may be, not mortgage or create a charge on such
apartment, plot or building, as the case may be, and if any such mortgage or
charge is made or created then notwithstanding anything contained in any
other law for the time being in force, it shall not affect the right and interest
of the allottee who has taken or agreed to take such apartment, plot or
building, as the case may be;

Para 22 (a) be read as
“These complaints are held to be maintainable to ensure the financial
discipline in these projects by the respondent as provided under sections 11
(g) and 11 (h) of the RERA.


Rectification in
Complaint No. CC005000000208211
and 2 Other complaints

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21. The rest of the order be read as it is.


(Mahesh Pathak)

Member – 1/MahaRERA