MahaRERA supersedes arbitration proceedings

Mumbai: The Maharashtra Real Estate Regulatory Authority (MahaRERA) has clarified that it has jurisdiction over the arbitration applications as the RERA Act was enacted after the Arbitration and Conciliation Act of 1996. The authority held that as per section 89 of the RERA it has overriding effect on anything that is inconsistent with the Act. The order was passed by the authority while hearing a complaint of a buyer who was to resort to arbitration process with the developer and had claimed compensation under RERA for delay in possession.

A bench of B.D. Kapadnis and adjudicating officer was hearing the complaint of Ganesh Lonkar against D.S. Kulkarni Developers who were developing a project DSK Mayurban at Pune and were to hand over the flats by June 30, 2017 but had failed to do so and hence the complaint was filed under section 18 of the RERA. The complaint also prayed for directions to the developer to pay the EMI’s to Tata Housing Finance with whom there was a subvention agreement till possession.

However, the advocate for the developers held that as per the agreement with the buyers rather than approaching MahaRERA, they should have gone to the arbitrator. Secondly, they said that while the flat was booked in the name of Mr Lonkar and his wife Sharmila Lonkar, only one of them was party.

After hearing both sides, the bench observed that RERA superseded the Arbitration Act and hence the complaint was valid. The bench also observed that though only one of the aggrieved parties was present, it did not hinder the adjudication of the case.

The bench then directed the developer to pay interest at the rate of 10.05 per cent on the amount of Rs 4.54 lakh from July 1, 2017 onwards till the date of handing over possession. The bench also held that as the developer was paying the EMI on the amount financed by Tata Finance, they did not have to pay any interest on it to the buyers.