Builder’s Plea Against Wadala Flat Buyers’ Refund Order Gets Rejected By Mumbai Supreme Court

The Supreme Court, granting no relief to Bombay Dyeing and Manufacturing Company, dismissed its special leave petitions for permission to file an appeal against an August 30 high court judgment that had upheld a Real Estate (Regulation and Development) Act (RERA) tribunal order for a refund to flat buyers over possession delay. The project is in Wadala.

After hearing the counsel for Bombay Dyeing and perusing the documents placed on record, the SC bench of Justices Dinesh Maheshwari and VikramNath on Friday ruled: “We are not persuaded to entertain these petitions seeking leave to appeal against the judgment.” The HC ruling had come in a batch of appeals.

The SC, however, said, “Even while not entertaining these petitions, we would leave it open for the parties in taking recourse to other appropriate proceedings, including the proposition for settlement, as may be advised and as may be permissible in law.”

In its order on August 30, the Bombay high court had served a setback to Bombay high court had served a setback to Bombay Dyeing, which constructed two “ultra-luxurious” towers in Wadala. The HC had upheld the RERA tribunal’s order directing it to refund with interest amounts received from buyers who booked flats in 2012-13. The flats were to be delivered by 2017.

Ashok Narang, a realtor, and other buyers had initially filed a complaint with Maharashtra Real Estate Regulatory Authority alleging delay in possession. They had sought refund and an exit under Section 18 and invoked Section 12 of RERA for compensation. They alleged reduced amenities and other “unilateral changes” in the apartments and project layout by the builder while registering the then ongoing project in May 2017 when the MahaRera Act came into force. The developer said amenities were provided.

Section 12 of RERA places an obligation on a builder or promoter of a project for “veracity” of an advertisement or brochure. It states that when a buyer who has paid a deposit based on information in a brochure or advertisement suffers a loss due to false information contained in it, he can be compensated by the builder.

The HC judgment by Justice C V Bhadang, had held: “Section 12 would also apply to the obligation of the promoter regarding the information given…prior to the registration of the project under the RERA Act of 2016 as ongoing project.” The provision is “retroactive”, it had held. The HC had said the “brochure indeed mentions the date of possession as 2017”. The developer had said that the date was subject to its disclaimer in the brochure. The HC had rejected the argument saying the disclaimer did not mention the possession date.