Mumbai: MahaRERA rejects builder’s bid to dismiss 17 buyer complaints in landmark Jogeshwari project dispute

In a significant order that could have farreaching implications for buyer protection under the Real Estate Regulation and Development Act RERA the Maharashtra Real Estate Regulatory Authority MahaRERA has rejected an attempt by Jangid Homes Pvt Ltd to dismiss 17 complaints filed by purchasers of units in the longdelayed Jangid Annexe project at Jogeshwari EastThe promoter had argued that the units in question were industrial units and therefore outside the jurisdiction of MahaRERA However MahaRERA MemberII Ravindra Deshpande ruled that the complaints are prima facie maintainable observing that the builder had repeatedly represented the project and the units as commercial in nature before purchasers as well as before MahaRERA itselfThe order allows all 17 complaints to proceed for adjudication on merits clearing a major hurdle for buyers who have been awaiting resolution in the abandoned projectThe dispute commercial or industrialThe controversy arose after 17 purchasers approached MahaRERA seeking relief under Section 18 of the RERA Act for delayed possession and other grievancesIn response Jangid Homes challenged the maintainability of the complaints arguing that the project consisted of industrial units approved exclusively for industrial use under municipal permissionsThe developer relied upon the Intimation of Disapproval IOD and Commencement Certificate issued by the Municipal Corporation of Greater Mumbai and cited earlier rulings where industrial projects were held to be outside the scope of RERAThe builder maintained that MahaRERA lacked jurisdiction to entertain the complaintsBuyers point to builders own recordsThe complainants countered the builders arguments by relying on documents executed by the promoter itselfAccording to the buyersThe allotment letters did not describe the premises as industrial unitsThe Agreements for Sale contained no reference to industrial galasStamp duty and registration charges were paid at commercial property ratesThe project was registered with MahaRERA as a commercial projectThe promoter disclosed all 38 units as commercial units on the MahaRERA portalThe builder consistently marketed and represented the project as commercialThe purchasers argued that the promoter could not now change its position after years of treating the project as commercialWhat convinced MahaRERAAfter examining documents and submissions from both sides MahaRERA noted several important factorsThe authority observedThe project was registered as a commercial project before MahaRERARegistration extensions were also sought on the basis that the project was commercialProject disclosures filed before MahaRERA classified the units as commercialAgreements executed with purchasers did not identify the premises as industrial unitsThe builders own representations before buyers and the regulator contradicted its present standThe authority observed that a promoter cannot disregard representations made before purchasers and MahaRERA while simultaneously seeking to challenge the authoritys jurisdictionBuilders investor defence fails at preliminary stageJangid Homes also argued that the transactions were essentially financial arrangements and that the complainants were investors rather than allotteesHowever MahaRERA noted thatSpecific units had been allottedAllotment letters had been issuedConsideration had been received from purchasersThe authority held that determining the true nature of the transactions would require detailed examination of evidence and therefore could not be decided through a preliminary maintainability applicationBuilders side of the storyJangid Homes argued thatThe project was sanctioned exclusively as an industrial developmentMunicipal approvals classified the building as industrialIndustrial projects are outside the ambit of RERAThe projects registration as commercial occurred because during the early years of RERA implementation there was no separate category available for industrial projectsPurchasers were aware of the industrial nature of the projectThe transactions were financial arrangements and not genuine allotmentsOnly a limited amount allegedly remained payable to the complainantsBuyerrsquos side of the storyThe 17 complainants contended thatThey purchased the units as commercial premisesNo agreement described the units as industrialThe builder itself registered the project as commercialAll 38 units were disclosed to MahaRERA as commercial unitsCommercial stamp duty and registration charges were paidThe promoter cannot change the projects character after accepting money and executing agreementslsquoBuilder cannot change its position after selling units as commercialrsquoAdvocate Anil Dsouza Secretary of the MahaRERA Bar Association and counsel representing the 17 complainants described the ruling as a major affirmation of buyer rightsThis is a unique and rare case where the promoter attempted to deny MahaRERAs jurisdiction by suddenly claiming that the units were industrial in nature However the documentary record spoke for itself In all 17 Agreements for Sale the builder repeatedly described the premises as commercial units and nowhere referred to them as industrial units More importantly the promoter itself registered the project with MahaRERA as a commercial project and uploaded all 38 units on the MahaRERA portal as commercial unitsDSouza said the ruling reinforces accountability in the real estate sectorThe Authority has rightly held that a promoter cannot make one representation to purchasers and MahaRERA at the time of registration and sale and then take a completely contradictory stand when faced with complaints from allottees The order sends a strong message that developers will be held accountable for the representations they make to both regulators and consumersHe added that the order ensures that the purchasers who have been waiting for years will finally have their grievances heard on meritsWhy this order mattersLegal observers including Advocate Dsouza believe the ruling could have implications beyond the present disputeThe decision underscores thatPromoters may be bound by representations made before regulators and purchasersProject registration details uploaded before MahaRERA can become crucial evidenceJurisdictional objections may not succeed where documentary records contradict the promoters standBuyers in stalled projects cannot be denied a hearing merely through technical objectionsThe ruling is likely to be closely watched by developers lawyers and thousands of purchasers involved in ongoing MahaRERA proceedingsAt a GlanceProject Jangid Annexe Jogeshwari EastComplaints 17 buyer complaintsBuilder Jangid Homes Pvt LtdCore issueWhether the units are industrial or commercialMahaRERAs finding Complaints are prima facie maintainableResult Builders maintainability application rejectedNext step All 17 complaints to proceed for adjudication on meritsCosts No order as to costs