MahaRERA Directs Godrej Properties to Refund Amount of Pre-RERA Project Booking

Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered Godrej Properties to refund a Rs 15 lakh booking amount to a homebuyer who cancelled his reservation shortly after making it. The case has drawn widespread attention due to the MahaRERA’s stance, emphasising the protection of homebuyers' interests under the Real Estate (Regulation and Development) Act, 2016 (RERA).

Background of the Dispute  

The dispute originated when Kishore Shamji Chheda, a senior citizen, booked an apartment in Godrej Properties’ luxury project, The Trees Origins, located in Mumbai’s Kurla area. Chheda booked the property in April 2017 and paid approximately Rs 15 lakh as the booking amount. However, due to personal reasons, he requested a cancellation within ten days of making the reservation. Despite the short timeframe between the booking and cancellation, Godrej Properties informed him that the entire amount was forfeited, sparking a legal battle between the developer and the homebuyer.

The homebuyer filed a complaint with MahaRERA, claiming that he had been unfairly deprived of his money, especially given that the cancellation occurred prior to the project's official registration under RERA in July 2017. Godrej Properties argued that because the cancellation took place before the project’s RERA registration, the regulatory authority lacked jurisdiction to intervene. However, MahaRERA saw the situation differently.

MahaRERA's Stand and Key Rulings  

MahaRERA ruled in favor of the homebuyer, stating that although the project was registered after the booking cancellation, the project was still ongoing when the Real Estate (Regulation and Development) Act, 2016, came into effect. Furthermore, the regulator noted that the project had not yet received a completion certificate, which made it subject to the Act’s provisions.

The authority referenced Section 3 of RERA, which requires all ongoing projects without completion certificates at the time of RERA’s enactment to register under the Act. This section is crucial as it aims to regulate and monitor projects that were underway when the legislation was passed, ensuring that buyers’ rights are protected in such cases.

In its order, MahaRERA noted that forfeiting the full booking amount was unjustifiable. The regulator argued that Godrej Properties had not presented evidence of any market price fluctuation or liquidated damages that would warrant the forfeiture of such a substantial amount. MahaRERA ruled that the forfeiture went against the purpose of the Act, which was established to provide relief to homebuyers and uphold fairness in property transactions. Godrej Properties was subsequently ordered to refund the full booking amount of Rs 15 lakh to Chheda by November 30, 2024, with an additional 2 percent interest.

Previous Rulings Against Godrej Properties  

The recent order is not an isolated case for Godrej Properties. In August 2024, MahaRERA ruled against the company in another case where an NRI homebuyer faced challenges with an unrefunded advance payment of Rs 97 lakh. In that instance, the buyer had cancelled the agreement, but Godrej allegedly withheld the refund, leading MahaRERA to intervene. The regulatory body FOUND OUT unfair trade practices and ordered a refund in that case as well.

Similarly, in March 2024, MahaRERA intervened in a dispute involving Ajit Dabhade, a homebuyer in Godrej Properties’ Emerald project in Thane. Dabhade had paid Rs 5 lakh as a reservation amount in 2019 but later had to cancel the booking due to challenges with loan procurement for stamp duty and registration. Godrej Properties had initially forfeited the amount, but MahaRERA mandated that only 2 percent of the consideration value could be withheld, directing the developer to refund the remaining balance.

MahaRERA's firm stance promotes transparency and fairness, reinforcing that unfair practices between homebuyers and developers will not be tolerated. By advocating for buyer interests, the authority is encouraging developers to handle cancellation policies more cautiously to avoid penalties.