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The Bombay High Court has issued a notice to Mumbai City Collector, Rajiv Nivatkar, for "willful disobedience" of its order to attach flats belonging to a builder in Mahim. The court issued the notice in response to a legal battle initiated by a flat buyer seeking compensation from the builder for the delay in providing possession. Additionally, an authorized representative of Avarsekar Realty Pvt Ltd, the developer, also received a show cause notice from the court for failing to comply with its March 2023 order.
In March 2023, the court ordered the builder to indicate the amounts received from flat sales and to explain why an interest amount, as compensation for delayed possession, should not be declared. The builder filed an affidavit in response, stating that it would suffice to meet the claims of the buyer, Mumbai-based solicitor Ashok Paranjpe, and his wife since flats that had been earmarked for them.
However, after hearing Paranjpe's counsel, Simil Purohit, the court observed that the builder had "suppressed" facts and "willfully" failed to comply with the March 8 order. Purohit argued that the builder had sufficient funds to make the payment and informed the court that a Rajya Sabha member of Parliament had purchased a flat in the project for Rs 6 crore.
Paranjpe and his wife had booked and paid over Rs 2.5 crore for the flat in the Shrishti Sea view project in Mahim in 2012. After the introduction of the Real Estate (Regulation) Act in 2017, Paranjpe sought interest on the amount already paid, as provided by the law, due to the delay in possession. In 2020, the Maharashtra Real Estate Regulatory Authority (MahaRERA) directed the builder to pay over 10% interest on the amount from February 2015 until possession is given.
In January 2021, MahaRERA issued an attachment warrant for four un-booked flats and sent it to the city collector to sell them to recover the interest amount for Paranjpe. Purohit said that despite the attachment warrant, the collector had not complied with the court orders. In July 2021, the RERA appellate tribunal confirmed the compensation order.
In September 2022, while disposing of Paranjpe's plea to direct the collector to take action, the HC asked him to raise the grievance before MahaRERA, which it held also has the responsibility to ensure that an attachment warrant is executed as contemplated under RERA. The court stated that the Act allows recovery from the promoter, allottee, or real estate agent, depending on who the order is against, as arrears of land revenue, through an auction after attachment.
The next date for the case is June 12. The Bombay High Court's show cause notices to the Mumbai City Collector and the authorized representative of Avarsekar Realty Pvt Ltd highlight the importance of complying with court orders and legal obligations in the real estate industry. It also emphasizes the need for accountability and transparency in the real estate sector to protect the interests of buyers and ensure timely delivery of possession.
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