Q. I had a dispensary in Dahisar measuring 300 square feet. The landlord decided to develop this property and offered me the same area free of cost on an ownership basis. I also agreed to purchase an additional area of 400 sqft for Rs 60 lakh. An agreement was signed between me, the landlord, and the developer in April 2015. As of date I have paid Rs 52 lakh. The developer agreed to pay me rent till I received possession of the new dispensary.

The date of possession in the agreement was December 2020. However, the date of possession in MahaRERA records was December 2021, which now stands extended to December 2025. The building was demolished in December 2016. The developer has now promised me possession by May 2025 and is demanding a balance amount of Rs 8 lakh. I am asking him to pay me interest for the delay on Rs 52 lakh already paid, which works out to about Rs 15 lakh. However, he says that he is not liable to pay the interest since MahaRERA has accepted his revised date of possession as December 2025.

Please advise: 1. If I can file a case under RERA, although I happened to be an old tenant and the agreement was executed in April 2015, ie before RERA came into operation? 2. If MahaRERA permits an extension of the project completion date, does it absolve the developer from paying interest for the delay period? 3. Will the delay period be calculated starting from the date of possession in the agreement or from the extended date granted by MahaRERA? —Dr S Patil, Dahisar

A.

It is evident that your building is under redevelopment. You have consented for such re-development and you have also purchased an additional area of 400 sqft from the developer for a total consideration of Rs60 lakh, of which you have already paid Rs 52 lakh. In such a case, your being the tenant in the old building does not matter for filing a case under RERA. If the apartment, flat, or tenement is being given on rent to any person, such person does not become “allottee” under RERA.

As per your agreement, the tenement is going to be made available to you on an ownership basis, and for which you are also partly paying the consideration. Hence you are the “allottee” as defined under RERA. As per RERA, “allottee” means any person to whom the apartment has been allotted, sold (whether on freehold or leasehold), or otherwise transferred by the promoter/developer, but does not include the person to whom such an apartment is given on rent.

As such you can file a complaint under RERA. Secondly, although your agreement is pre-RERA, that cannot be a bar for filing a complaint with MahaRERA since the project was an “ongoing project” when RERA came into effect on May 1, 2017, and is still “ongoing” as of date. Hence on both these counts, you can file a complaint in MahaRERA as being an “allottee”. As regards your second question, you will note that although MahaRERA may extend the period of any real estate project, that in itself does not absolve any developer/promoter from his legal liability to pay interest to the allottee for the delay under Section 18 of RERA.

It is true that many developers are seen denying the rightful interest to the homebuyers for the delay by pointing out to the extension granted by MahaRERA for their project. However, this is misleading. As the Supreme Court has observed in ‘Newtech Promoters v/s State of UP & other’ case, the interest payable by the promoters to the allottees for the delay is “nonnegotiable” and it is the right of the allottees granted by the Parliament which must be honoured.

As to the date from which the delay has to be counted for working out to interest calculation, the answer is the date of possession given in your agreement. The date of completion of the real estate project or the revised/extended date of completion of the project cannot be the date for calculating the delay period. It is a statutory right of the homebuyers to get interest at the prescribed rate for the delay. And for computing the delay it is the date shown in the agreement and not the MahaRERA’s extended date that will count.

(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)