MUMBAI: The Bombay High Court observed on Friday that a pending refund case under RERA related to a Chembur project reveals a troubling situation within the collector’s office. Justices AS Gadkari and Kamal Khata noted that the execution of decrees under the MahaRERA is not being properly enforced, even though it is legally required.
On July 10, the court issued notices to the Mumbai suburban district collector and a tehsildar to explain why they should not face action under the Contempt of Courts Act for failing to comply with a July 8 order and providing requested information about the builder’s assets.
The court appointed a receiver for a flat in a Khar building to protect the interests of Sneha Tejwani, who is seeking a refund of ₹1.5 crore with interest.
Previously, in February, the court had noted that builders were “exploiting loopholes” in the law and frustrating orders for refunds issued by MahaRERA. The court directed the state advocate general to assist in creating measures to prevent circumvention of the Real Estate (Regulation and Development) Act (RERA), which entitles buyers to a refund along with interest for delayed projects. AG Milind Sathe suggested, among other points, a 25% security of project costs during registration.
In 2016, a 550 sq ft flat was booked for ₹1.65 crore in a project by Niraj Kakad Construction on Sion-Trombay Road in Chembur. Tejwani’s attorney, Neeta Jain, stated that she paid ₹1.5 crore, with possession expected in August 2017. However, the project was halted for various reasons. In 2019, Tejwani, through her father as her attorney, invoked her RERA rights to withdraw from the project and requested a refund with interest. The MahaRERA later ordered the builder to refund her with 10.4% interest. The builder challenged the ruling up to the HC in 2022, but the recovery process remained pending with the suburban collector. Tejwani’s lawyers noted she was barred from petitioning the HC in 2024 for further directions.
The court had requested asset disclosure from the builder. However, on July 8, the HC claimed the builder “attempted to deceive the court” by not revealing all financial interests. Consequently, it directed the collector to confirm by July 10 the number of legal entities tied to the builder. Initially, there was no response, but later, a tehsildar provided details that the court deemed inadequate and undermining of its authority.
The buyer’s attorney indicated a flat in Khar (west) belongs to the builder and could potentially be attached. The builder’s lawyer, Karl Shroff, countered that no agreement existed regarding that flat. Nonetheless, the HC ordered the receiver to take possession of the Khar flat by July 13 to secure the refund. The case was postponed to July 17 at the request of government pleader Anjali Helekar.
