The Maharashtra Real Estate Regulatory Authority (MahaRERA) has allowed a developer to de-register a residential project, ruling that there is no provision in the RERA Act to force completion of the project when the developer had expressed inability to complete it.
According to the MahaRERA order, a registration number once given to a project does not remain for all times to come and there do exist circumstances where it lapses or stands revoked.
As per MahaRERA, a situation where the project was planned and then sought to be abandoned, this in effect means that there will be no project available for allotting premises as was promised. In such a situation one has to look for a legislative remedy to force the hand of a Promoter (developer) to complete a project which he wants to abandon. Unfortunately, there is no provision in the said Act which provides a path for forcing a promoter to complete a project which the promoter has voluntarily come forward to say that he is unable to complete the project in the present form.
Further if it is not the case of any of the respondents (buyers who challenged the termination of the allotment) that the applicant promoter is unable to complete the said project due to financial fraud or misappropriation of the monies provided by the allottees, thus, this Authority sees no mechanism to force the hand of a developer where a case of fraud or misappropriation is not made out."
MahaRERA said it cannot force the developer to complete the project where the interest of the buyers is protected and the money involved is repaid with interest. "Travelling further into the world of commercial reality, the question that arises is can a regulator force a commercial entity to complete a project that is not financially or otherwise viable especially when the money of the investors stands protected. Thus, on both the tests of commercial viability and the availability of a legislative mandate the answer is that the promoter cannot be forced to complete the project."
Section 18 of the RERA Act allows for a refund only at the request of the allottee and not the developer. The MahaRERA stated that the question that now begs an answer is why did section 18 provide for a refund only when the allottee desires and not vice versa? The reason is apparently clear when we examine the intent of the legislation. The very foundation and intent of this legislation are to protect the interest of the buyer (allottee) as the project proceeds. The very intent of this section 18 is to ensure that the promoter does not select and choose allottee/s which he intends to evict, it said.
The aim is that the choice to exit from the project should be in the hand of the allottees and not the promoter. If the promoter has chosen to terminate the allotment of all allottees and not a select few, there seems to be no malafide on part of the promoter while terminating the allotments.
