In a significant ruling that reinforces the rights of homebuyers, the Maharashtra Real Estate Appellate Tribunal has overturned an order by the Maharashtra Real Estate Regulatory Authority (RERA), clarifying that arbitration clauses in prior agreements do not override the jurisdiction of the RERA Act.
The case involved a dispute between Mrs. Sheryll Sethi and Mr. Gurdevsingh Sethi (Appellants), who had purchased a flat in the “Kalpataru Radiance-C” project developed by Kiyana Ventures LLP (Respondent). The Appellants filed a complaint with the RERA Authority seeking possession of the flat and interest for the delayed possession.
The RERA Authority had previously directed the parties to resort to arbitration, citing the arbitration clause in the agreement for sale. However, the Appellate Tribunal, in its recent order, emphasized that the RERA Act’s jurisdiction to protect homebuyers is not ousted by pre-existing arbitration clauses.
Citing a judgment by the Bombay High Court, the Tribunal highlighted the non-arbitral nature of disputes between individual allottees and promoters under the RERA Act.
The Appellate Tribunal also pointed out procedural shortcomings in the initial RERA order, noting that the Authority had decided on the maintainability of the complaint based on a preliminary issue without delving into the merits of the case, specifically the delay in handing over possession.
To ensure a fair hearing and adherence to natural justice principles, the Appellate Tribunal quashed the RERA Authority’s order and remanded the case back to the Authority for fresh consideration on its merits. The Tribunal directed that the complaint be heard and disposed of expeditiously, considering it was initially filed in January 2024.
This ruling is expected to have a significant impact on real estate dispute resolutions, reinforcing the RERA Act as a primary recourse for homebuyers, even in cases where prior agreements contain arbitration clauses.
