In a recent order [1], the Maharashtra Real Estate Regulatory Authority, Mumbai (“MahaRERA/ Tribunal”) has reaffirmed that promoters cannot evade the Tribunal’s jurisdiction by labelling transactions as having occurred prior to enactment of Real Estate (Regulation and Development) Act, 2016 (“RERA”), unregistered, or mere “investment” arrangements, where the effects of such transactions continue into the post-RERA regime.
While adjudicating multiple complaints arising out of a redevelopment project, Tribunal examined allotments issued prior to the enactment of RERA, in cases where no registered agreements for sale had been executed. The Tribunal held that such transactions squarely fall within its jurisdiction, notwithstanding their pre-RERA origin.
The promoter sought to resist the proceedings by contending that the allotment letters were issued prior to statutory approvals and were in the nature of security or investment arrangements, and therefore lay beyond the regulatory ambit of RERA.
Bridgehead Law Partners, through Ranit Basu, Maitri Malde, Dua Shaikh and Harshada Nirmal, represented the allottees before the Hon’ble Tribunal and contended that while RERA operates prospectively, it applies to transactions originating prior to RERA where the defaults continued thereafter. It was urged that statutory failures such as continued retention of monies, non-execution of agreements for sale, and non-regularisation of allottee rights even after project registration constitute continuing defaults, thereby attracting RERA’s jurisdiction irrespective of the date of the original allotment.
Tribunal emphasised that once a promoter registers a project under RERA, it is under a statutory obligation to make full and truthful disclosures of all prior transactions, including allotments or advances received under earlier regimes such as the Maharashtra Ownership Flats Act, 1963. Pre-RERA allotments cannot be left unresolved. The promoter must either regularise such transactions by identifying and allotting specific units within the registered project, or release the allottee by refunding the consideration. Jurisdiction cannot be ousted merely because the transaction predates RERA when its effects persist post-registration.
The Tribunal noted the promoter’s prolonged failure to execute agreements for sale despite receipt of substantial monies, absence of clarity regarding identifiable units within the registered project, and continued retention of consideration without crystallising enforceable allottee rights. While holding that possession could not be granted in the absence of clearly identifiable unit particulars, Tribunal made it clear that allottees cannot be left remediless for deficiencies arising from the promoter’s own conduct, particularly the failure to regularise allotments or refund monies.
Accordingly, in the interest of justice and equity, MahaRERA directed refund of the amounts paid in the concerned complaints and imposed a penalty under section 61 of the RERA for breach of statutory obligations, including failure to execute agreements for sale and unlawful retention of monies.
The order reinforces a crucial principle: RERA governs continuing defaults, not merely future contracts, and promoters must actively align pre-RERA arrangements with post-RERA compliance once a project enters the statutory framework.
For more information about the aforesaid order or its implications you may write to us at: solutions@bridgeheadlaw.com.
Ranit Basu | Partner
Dua Shaikh | Associate
Survi Savla | Intern
Views expressed are personal to the authors and do not constitute as legal advice.
[1] MAHA RERA, Mumbai – Complaint Number: CC006000000397833 of 2023