A Mumbai redevelopment dispute has ended with the Maharashtra Consumer Disputes Redressal Commission directing a builder to provide more than Rs 1.22 crore in relief to landowners, execute and register a permanent alternate accommodation agreement, and pay interest on part of the amount.
The dispute involved two landowners and their late mother, who held a one-third undivided share in a Mumbai property. They transferred development rights to a builder in 2010 under an Agreement to Assign for redevelopment. The parties later signed a Supplementary Agreement and an Agreement to Offer Permanent Alternate Accommodation on February 18, 2015.
Under the documented terms, the landowners were to receive a 1,395 sq. ft. flat in the redeveloped building along with two car parking spaces. The builder was also required to pay compensation, rent for temporary accommodation, and a penalty for delayed possession. The agreements further required the developer to execute and register the permanent alternate accommodation agreement and bear stamp duty and registration charges for up to 1,000 sq. ft. of the allotted area.
The landowners received physical possession of the flat in May 2018. However, according to the complaint reported by The Economic Times and cited in the Times of India report, the builder did not pay its agreed share of stamp duty, did not execute the registered permanent alternate accommodation agreement and withheld Rs 88 lakh in compensation linked to increased floor space index under the supplementary agreement.
The other claims included Rs 6.60 lakh in rent for temporary accommodation between December 2017 and April 2018, Rs 16.50 lakh as a penalty for delayed possession and Rs 10 lakh to reimburse the cost of raw materials purchased by the landowners. Instead of settling these amounts, the landowners said the builder sent a legal notice in June 2022 demanding Rs 30,26,592 towards alleged construction expenses.
The commission treated the transfer of development rights as consideration for housing services and held that the builder had benefited from those rights while failing to complete contractual and statutory obligations. It reportedly observed that the developer had ignored the requirement under the Maharashtra Ownership Flats Act, 1963, to register the permanent alternate accommodation agreement. The commission also found that the demand for Rs 30,26,592 amounted to an unfair trade practice.
The matter was heard ex parte after the builder did not appear despite receiving notice. The commission directed the developer to execute and register the permanent alternate accommodation agreement within 60 days of receiving the order and to bear the applicable stamp duty and registration charges for up to 1,000 sq. ft. of carpet area.
In addition to the Rs 88 lakh enhanced FSI compensation, carrying interest at 8% from the date of default until recovery, the order included Rs 6.60 lakh in outstanding rent, Rs 16.50 lakh for delayed possession and Rs 10 lakh for raw materials. The builder was also directed to pay Rs 1 lakh for mental agony, harassment and hardship, and Rs 50,000 towards litigation expenses. The directions total more than Rs 1.22 crore, apart from the requirement to complete and register the accommodation agreement.
