Project Takeover, Same Exposure: MahaRERA on Incoming Promoter Liability

The core message

A recent MahaRERA order is a useful reminder that in real estate disputes, labels do not decide rights. A document may be called a “request for allotment,” and payments may be described as an “interest-free deposit,” but if the commercial record shows a clear flat booking, substantial payment, and continued acknowledgment of the buyer, the Authority may still treat the purchaser as an allottee and grant statutory relief.

Background of the dispute

In Prajesh Chandra Mohan & Anr. v. Neelkamal Realtors Tower Pvt. Ltd. & Ors., the complainants had booked flats in 2010 in a project originally developed by respondent no. 1 (Neelkamal Realtors Tower Private Limited). They paid substantial sums toward the flat consideration, and over time the project underwent changes in layout, promoter structure and branding. It was eventually continued by respondent no. 3 (Godrej Residency Private Limited – “Godrej”) under the name “Godrej Avenue Eleven – Tower B.” The project completion date was revised multiple times, the registration was extended, and the project had still not received an occupancy certificate.

What the complainants sought

The complainants ultimately sought interest for delayed possession and a direction to execute and register agreements for sale for their respective flats.

The incoming promoter’s defence

The incoming promoter argued that the complaints were not maintainable. Its case was that there was no executed agreement for sale, the stamped request for allotment was only an offer, the amounts paid were merely “interest free deposits,” and no delay claim could arise because the revised completion date stood extended to 31.12.2028. It also argued that the monies had been paid to the original promoter and not to Godrej.

MahaRERA’s approach: substance over label

MahaRERA rejected that approach. The Authority examined the full documentary record, including payment receipts, amendment letters and later correspondence, and held that the complainants had paid substantial consideration, their booking had been continuously acknowledged, and specific flats had been identified in their favour. On that basis, it held that the complainants fell within the definition of “allottee” under Section 2(d), even though no formal agreement for sale had been executed.

Why MOFA still mattered

A significant part of the reasoning was the promoter’s failure to comply with MOFA. The Authority noted that more than 20% of the consideration had been collected without execution of an agreement for sale, despite the legal requirement to do so before crossing that threshold. The absence of an agreement therefore did not help the promoter; if anything, it reinforced the buyers’ case.

Liability of the incoming promoter

The order is particularly important for project takeovers. Godrej argued that it had stepped into the project later and had not received the original consideration from the complainants. MahaRERA nevertheless held that once Godrej took over the project as promoter and continued it under the MahaRERA registration, it assumed the statutory obligations attached to the project toward existing allottees. Since Godrej also failed to place the transfer agreement on record, the Authority held that the respondents were jointly and severally liable.

Waiver clauses without consent will not help

The Authority also dealt with letters that purported to waive claims for interest, compensation and prior liabilities up to the revised possession date. MahaRERA held that these terms were not binding because the letters did not bear the complainants’ signatures. That is a useful practical point: unilateral migration or waiver language will not easily displace statutory rights.

How delay was determined without an agreement for sale

On delay, the most interesting question was how Section 18 could apply in the absence of an executed agreement for sale. MahaRERA answered this by looking to subsequent written representations. It relied on the executed amendment letters, which represented that possession would be handed over by 31.12.2022. The Authority treated that as the agreed possession date, rejected the argument that the complaint was premature, and held that delay stood established beyond that date.

The relief granted

The final relief was commercially significant. MahaRERA directed Godrej to execute and register agreements for sale within sixty days. It also awarded interest for delayed possession on the amounts paid, excluding taxes and statutory charges, from 01.01.2023 until handover of possession with occupancy certificate, at the rate prescribed under Rule 18. It further awarded costs of Rs. 20,000 to each complainant.

Takeaway

The larger takeaway is clear. In legacy projects, substance will prevail over drafting labels. If money has been accepted, flats are identified, and the buyer has been consistently treated as part of the project, RERA exposure remains real. For developers and incoming promoters, this order emphasizes the need for careful diligence on historical buyer claims. For homebuyers, it confirms that the absence of a formal agreement for sale is not always fatal where the factual record clearly supports allottee status.