MahaRERA Orders Mumbai Builder to Pay Interest for Flat Delay in Malad Project.

Raju Vernekar

Sprouts News Network

MahaRERA holds the builder accountable for delays in the Malad redevelopment project, imposing penalties and directing compensation for affected homebuyers. The Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered Era Realtors Private Limited to pay full interest to flat buyers for delayed possession of a luxury apartment in Malad East, North Mumbai. The ruling comes after the developer failed to hand over possession of flat No. D-1006 in Tower D of the “Alta Monte and Signet” project (Reg. No. P51800010463), despite a clear timeline agreed upon in the sale agreement dated May 8, 2013.

According to the agreement, possession was to be delivered by June 2017, with a grace period until December 1, 2017. However, the handover never took place, prompting the buyers, including Chanchal Rastogi, to file a complaint. MahaRERA directed the developer to pay interest on the invested sum of ₹4,22,68,102 at the SBI Marginal Cost of Funds Based Lending Rate (MCLR) plus 2%, effective from July 1, 2018.

The initial order was issued on February 12, 2021, but became legally enforceable only on February 7, 2024, due to the developer’s appeal. MahaRERA invoked Section 18 and Rule 03 of the General (Amendment) Regulations 2017, directing the issuance of a warrant for interest recovery from the developer until full occupation certificate (OC) is obtained for Tower D.

The developer, Era Realtors, contested the order by filing a review application. They claimed that both a partial OC (January 18, 2022) and a full OC (February 8, 2022) had been obtained and submitted to the Slum Rehabilitation Authority (SRA) by June 2, 2022. As per the OC, the building from the second to tenth floor was complete and ready for possession. The developer also argued that an email dated May 30, 2022, informed buyers of the readiness.

However, a High Court stay on June 8, 2022, delayed the handover, which was later lifted on October 6, 2022. The developer maintained that the delay in submitting OC documents to MahaRERA was inadvertent. Furthermore, buyers were asked to clear outstanding dues on August 19, 2024, and a supporting affidavit was submitted on June 14, 2022, asserting the legality of the OC.

Despite this, the developer requested that the interest calculation period be adjusted to end either on January 18 or February 2, 2022. They also appealed to withdraw demand notices issued by the tehsildar and collector in April 2024. In addition, the developer sought condonation for a 42-day delay in filing the review petition.

In his ruling dated March 19, 2025, MahaRERA Adjudicating Officer Ashok Alaspurkar condoned the 42-day delay but dismissed the review application. He clarified that the OC dated January 18, 2022, could not be considered a full OC. The architect’s letter submitted as supporting evidence was declared inadmissible under Rule 36 of the MahaRERA General (Amendment) Regulations 2017.

The SRA’s lack of a formal OC issuance, despite being informed about project completion in February 2022, further weakened the developer’s claims. Alaspurkar ruled that the project was not ready for legal occupation, and the flat buyers’ claims remained valid. Consequently, the warrant for interest recovery remained in force, and execution proceedings were not halted.

Advocate Shakeeb Shaikh represented the developer, while Advocate Sulaiman Bhimani appeared for the homebuyers, ensuring a strong legal counter.

In an ongoing civil appeal (Writ Petition No. 8720/2024) before the Bombay High Court, the developer assured that the flat would be handed over to the buyers by July 2, 2024. Justice Avinash Gharote stayed the matter until July 3, 2024. However, as of the date of the report, the developer had not fulfilled the promise.

This case underscores the growing accountability in Mumbai’s redevelopment ecosystem, with MahaRERA reinforcing consumer protection. As reported by Sprouts News, such regulatory actions are setting crucial precedents, especially in high-value redevelopment projects involving delayed handovers.

As Sprouts News continues to follow this case, it remains a stark reminder of the importance of timely compliance and transparency in Mumbai’s evolving real estate landscape.