While directing Victoria Enterprises to pay simple interest on Rs. 5.51 crores from the promised possession date to actual handover, the Bombay High Court has held that benefit of Section 18 of RERA is not restricted only to allottees, in view of the fact that even successor in title of an allottee is treated as an ‘allottee’ under the provisions of RERA.
relied on the spirit of Section 18 of RERA but applied the contractually agreed rate, not the claimed 12% or Maharashtra RERA rate. The Court directed payment of 9% simple interest on Rs. 5.51 crore from 31 March 2008 to 15 February 2020, but declined summary judgment on completion of common amenities because their alleged incompleteness required oral evidence.
The Court found that the developer had no real prospect of successfully defending that claim, and there was no compelling reason to defer its determination until oral evidence was recorded. The Court treated interest as normal accretion on capital and relied on the spirit of Section 18 of RERA to impose liability for delayed possession. Separate compensation claims were not the subject of the summary judgment sought and required evidentiary adjudication.
While noting that Section 2(d) of RERA includes subsequent acquirers of an allotment, the Court found that the alleged municipal rejection of plans lacked material particulars and documentary support. Obtaining sanctioned plans was the promoter’s responsibility, and mitigating circumstances relevant to compensation did not defeat the interest claim.
Briefly, DNM Trustee Services Private Limited, acting as trustee of the Lalwani Family Trust, sued Victoria Enterprises Limited for specific performance and compensation for delayed possession of two units in “Pittie Chambers”, Mumbai. The entire sale consideration of Rs. 5.51 crores had been paid under an agreement dated 2 February 2008, which promised possession by 31 March 2008. Possession was ultimately handed over on 15 February 2020. The trustee sought summary judgment under Order XIII-A of the Code of Civil Procedure for completion of common amenities and payment of interest at 12% per annum for the delay.
A Single Judge Bench of Justice Sandeep V. Marne observed that the claim concerning unfinished common amenities required oral evidence to establish which facilities remained incomplete and could not be decided through summary judgment. However, the interest claim did not require a trial.
The Court found that the developer’s objection to the trustee’s standing had no real prospect of success, considering the family transfers, its delivery of possession to the trustee and its admissions. Its force majeure defence was also vague and unsupported by documents, since obtaining sanctioned plans was the developer’s responsibility, and the purchasers could not be made to suffer because faulty plans were rejected.
The Bench clarified that summary judgment under Order XIII-A requires both the absence of a real prospect of successfully defending the claim and the absence of any compelling reason for recording oral evidence. Both conditions were satisfied for the interest claim. The Court however, distinguished interest on the paid consideration, being normal accretion on capital, from compensation, which requires proof of loss.
The Court relied on the spirit of Section 18 of RERA to fasten liability for delayed possession, holding that mitigating circumstances did not defeat the interest claim. However, it declined to apply the Maharashtra RERA interest rate or the claimed 12% rate and instead awarded the contractually agreed rate of 9% simple interest.
