Court affirms unqualified right of allottees to claim interest for delays, dismisses promoter's appeal
In a significant ruling, the Bombay High Court has reinforced the precedence of the Real Estate (Regulation and Development) Act, 2016 (RERA) over the Indian Contract Act, 1872 in cases involving delayed possession of real estate projects. The judgment was delivered by Justice Sharmila U. Deshmukh in the case of CCI Projects Private Limited v. Mr. Rajesh Kumar Chaudhary and Others. The court dismissed the appeal filed by CCI Projects Private Limited, a real estate promoter, challenging the Maharashtra Real Estate Appellate Tribunal's order that directed them to pay interest to the allottees for delayed possession.
The dispute arose when the allottees, who had booked apartments in a project developed by CCI Projects, filed a complaint under RERA, citing delayed possession beyond the agreed date. The initial agreement specified possession by February 2016, which was later unilaterally extended by the promoter. Despite assurances of revised timelines, the possession was not delivered until April 2021.
The promoter argued that the acceptance of delayed timelines by the allottees constituted a waiver of their right to claim interest under Section 55 of the Indian Contract Act. However, the court emphasized that Section 18 of RERA provides an unqualified right to allottees to claim interest for delayed possession, overriding any conditional acceptance under the Indian Contract Act.
Justice Deshmukh underscored that RERA, being a special enactment, takes precedence over the general provisions of the Contract Act. The court also clarified that the COVID-19 pandemic could not be considered a force majeure event to excuse delays predating the pandemic.
This ruling reiterates the legal protection afforded to consumers in the real estate sector under RERA, reinforcing the accountability of promoters to adhere to promised timelines and ensuring that consumer interests are safeguarded against unilateral contract modifications.
Bottom line:-
Real Estate (Regulation and Development) Act, 2016 (RERA) overrides Indian Contract Act, 1872 in case of delayed possession of real estate projects. Allottees have an unqualified statutory right to claim interest for delayed possession under RERA, irrespective of acceptance of delayed performance or absence of notice under Section 55 of the Indian Contract Act.
Statutory provision(s):
Real Estate (Regulation and Development) Act, 2016 Sections 18, 31, 55, 89; Indian Contract Act, 1872 Sections 32, 55
CCI Projects Private Limited v. Mr. Rajesh Kumar Chaudhary, (Bombay) : Law Finder Doc id # 2926541
