MUMBAI: Is the development manager who signs an agreement with the builder of exclusive rights to sell the apartments obligated to pay compensation to the buyer in the event of a delay, or is the responsibility on the builder alone? An order from RERA reported on March 5 that they are in charge of the Mulund project, reports Swati Deshpande.
MahaRERA has ordered the development manager, a subsidiary of the Shapoorji Pallonji Group, and Nirmal Developers, to repay the money paid by four apartment buyers at 9% interest for delays in construction and apartment ownership.
MahaRERA Member B D Kapadnis said DM will be considered a ‘promoter’ of the project with construction firm Nirmal Developers. He ordered that the affiliate SP be added as a promoter on the project site within 30 days of the request.
Four apartment buyers who booked apartments in “Mumbai Dreams – Olympia C&D” in Mulund West moved to RERA last year due to construction delays. One complainant said the completion date was set in June 2019, but was subsequently modified unilaterally until December 2024.
Defenders Harshad Bhadhabhadi, Ashwin Shah and Rajeshwar Deshmukh, who represent the buyers, said they booked the apartments in the belief that Dubai Municipality would construct the building and that there would be no delay.
Buyers have paid less than 20,000 rupees each so far. They wanted to withdraw from the project, citing provisions of the Rera Act, and claiming a refund with interest. Neither of them asked for compensation. But they said that Dubai Municipality was also obligated to make payments as “promoter”.
Shapoorji Pallonji, through his attorney Aftab Diamondwala, argued that the company’s subsidiary, Lucrative Properties Pvt Ltd, was only DM on the project to help with project management, planning, supervision and use of his trademark. So he said he was not obligated to refund the money. Nirmal Developers’ advocate, Vishali Mohiti, said the claimants were not “successful bidders” under the law and no sales agreement had been implemented either, so their claims “could not stand still”. The originator also assured that liability for reimbursement will only arise in the event that the possession is not delivered on the date mentioned in the registration application.
Schaporji argued that the developer was financially responsible, adding that Lucrative Properties was mentioned as “another professional” on the project site.
The order said, “The terms of agreement…clearly shows the DM has authority to supervise and control all activities of planning, selling, funding and constructing of the project.” Also, if the person who constructs and person who sells are different, they are jointly liable, said Kapadnis in the order. “Lucrative Properties is using brand name and goodwill of Shapoorji Pallonji, collecting money from buyers…and selling units,’’ said the order. It is also sharing 10% revenue. “Therefore, I hold that it comes under the definition of the promoter,” said Kapadnis.