MREAT quashes MahaRERA’s order over arbitration in Winter Green project, ET RealEstate
MUMBAI: The Maharashtra Real Estate Appellate Tribunal (MREAT) set aside a Maharashtra Real Estate Regulatory Authority (MahaRERA) order, passed in July 2022, where MahaRERA asked 36 complainants, who were allottees in a Borivli project, to take the recourse of arbitration as it was a clause in the sale agreement.
MahaRERA, in its order, stated since the agreements for sale were executed between 2012-16, prior to Real Estate (Regulation and Development) Act, 2016, Act, the allottees needed to take recourse to the arbitration clause. However, the tribunal observed Bombay High Court held a dispute between individual allottees and a promoter under the real estate Act is non-arbitral in nature, and the jurisdiction of RERA is not ousted, even if the agreement between the promoter and allottee contains an arbitration clause. MREAT remanded the matter back to MahaRERA for fresh consideration.
The allottees, represented by advocates Anil D’Souza and Rupali P in MREAT, booked flats in Winter Green, part of Rivali Park project, and paid substantial sums. The promoters CCI Projects and Cable Corporation of India committed to handing over the possession of flats by various dates. They failed to hand it over though. The allottees filed complaints and sought relief of interest on the paid sum on account of the delay, and sought compensation.
While MahaRERA observed in its order that since the agreements for sale were executed prior to the RERA Act, the parties needed recourse to the arbitration clause as mentioned in the agreement, MREAT said the Supreme Court held the RERA Act is retroactive in its operation. MREAT said MahaRERA passed the impugned order on the preliminary issue of maintainability of complaints without going into merits of the matter or the real controversy between parties.
On whether the jurisdiction of the RERA Act is ousted if agreements between promoters and allottees contained an arbitration clause, MREAT said it has now been settled by Bombay High Court in the case of Rashmi Realty Builders versus Rahul Rajendrakumar Pagariya and others decided on Oct 25, 2024. However, advocate for the promoters of Rivali Park, referred to a Guwahati High Court judgment, where it held arbitration can be invoked by a party in spite of alternative remedy provided by RERA Act. MREAT said while the courts have taken different views, it is a settled position of law that decisions of high courts have a binding effect on subordinate judiciary and tribunals within their jurisdiction.
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