A stark warning for real estate buyers in redevelopment projects: never part with money based on allotment letters alone if the developer hasn’t yet secured a registered redevelopment agreement with the housing society. In a recent MahaRERA order, homebuyers in the stalled “Ganga Jamna Sangam” project in Khar West learned this lesson the hard way — they secured full principal refunds but were denied interest, largely because their 2010 bookings predated the developer’s legal rights.
The Maharashtra Real Estate Regulatory Authority (MahaRERA), under Chairperson Manoj Saunik, passed the consolidated order on January 16, 2026 (hearing held November 13, 2025), in two complaints concerning the lapsed project (Registration No. P51800010901). Originally promised completion by March 31, 2016 (revised to July 31, 2019, extended to January 30, 2021), the project has no Occupancy Certificate and lapsed on January 31, 2021.
Complainants included:
- Rajiv Dayal, who filed Complaint No. CC0060000000210009 on February 13, 2022, for five proposed commercial units (B-1201 to B-1205) allotted via letters dated January 18, 2010. Total consideration exceeded Rs 3.7 crore, with significant payments made.
- Ashok Narang and Jyoti K. Narang, who filed Complaint No. CC0060000000344283 on February 10, 2023, for commercial unit B-401 (approx. 468 sq ft), allotted June 18, 2010, with Rs 49 lakh paid by July 2010 toward about Rs 87.5 lakh.
Buyers alleged the developer accepted funds for commercial spaces, later converted the project to residential (built only up to 11 floors), mortgaged the property (including their units), and failed to execute registered Agreements for Sale or deliver possession.
Advocates Involved Representing the complainants: Advocate Prakash Rohira (for Rajiv Dayal) and Advocate Twishi Pant (for Ashok and Jyoti Narang). For respondents (Parthesh Developers, Nirav Shah, Monica Shah, and Ganga Jamna Sangam Co-operative Housing Society Ltd.): Abhinesh Yadav and Sachin Chokhani (society secretary).
The developer and society countered that no valid contracts existed — the redevelopment agreement with the society was executed only on February 23, 2011, more than a year after the 2010 allotment letters. They argued the letters were premature/invalid, no commercial units were finalized, and no privity or liability for interest/compensation arose.
After arguments and written submissions (due November 25, 2025), MahaRERA allowed the complaints for refund but rejected interest and most other reliefs (e.g., plan-change compensation, mental agony, penalties beyond directives).
Why No Interest — The Core Lesson The Authority granted full principal refund (payable in one installment within 60 days) but explicitly denied interest, stating in Para 12: the transactions “have not progressed beyond the issuance of an allotment letter and initial payment.” No registered Agreement for Sale was executed — a must under Section 13 of the RERA Act, 2016, to invoke statutory interest under Section 18 (typically SBI MCLR + 2%).
The decisive factor: allotments occurred before the developer gained legal authority via the 2011 redevelopment agreement. MahaRERA observed that without such prior rights, the developer “should not have proceeded with the issuance of allotment letters… nor accepted any payments.” Yet payments were accepted, receipts issued, and funds utilized for years without refunds or alternatives. Allotment letters (signed, with payment proofs like bank statements and SBI certificates on record) were admissible as transaction evidence but fell short of full RERA-compliant agreements.
Rajiv Dayal must pay additional filing fees (Rs 20,000 for four extra units, within 10 days). The developer must seek project extension within 30 days or face Section 63 penalties.
This case reinforces a critical real estate principle in Maharashtra: in redevelopment scenarios, buyers should wait for a registered development agreement between developer and society before booking or paying — premature allotments may yield principal refunds on payment proof but often forfeit interest claims due to the preliminary nature of the transaction.
The project remains lapsed, leaving buyers to recover principal only — a costly reminder of unchecked early bookings.
Also Read: MahaRERA Dismisses Homebuyers’ Refund Plea as They Relinquished Property to Lender
