In a significant ruling that highlights the risks faced by homebuyers in redevelopment projects, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has rejected a complaint seeking refund of ₹1.5 crore or possession of two flats in Andheri West. The buyer, who had paid the substantial amount to the original developer, found himself with no recourse against the new developer appointed by the housing society.
The order, passed by Member II Ravindra Deshpande on July 10, 2026, in Complaint No. CC006000000292231, dismissed the plea filed by Dharmesh Jagdishlal Lamba against M/s. Rajvi Builders & Developers and its partner Dharmesh Himatlal Soni.
Background of the Case
The dispute revolves around the Ashta Vinayak Co-operative Housing Society Ltd. (Building No. 8, Azad Nagar, Jai Prakash Road, Andheri West), registered under MahaRERA as Project No. P51800005214.
According to the complaint, Lamba initially booked a flat in another project promoted by Kirti Zaveri in 2011. In May 2014, Zaveri allegedly induced him to surrender that flat and switch to two flats (No. 303 and 403) in the Ashta Vinayak redevelopment project. An allotment letter dated 24/05/2014 was issued by Zaveri Constructions Pvt. Ltd., where Kirti Zaveri was a Director. The total consideration was around ₹3.51 crore, and Lamba paid ₹1.5 crore.
The project soon stalled. No possession was offered despite repeated assurances. Lamba claimed that development rights were later transferred within the family to Rajvi Builders & Developers, with Dharmesh Soni (respondent) being Zaveri’s brother-in-law. He sought either a full refund with interest or execution of documents for the flats.
Complainant’s Allegations
Lamba argued that he was induced through false representations. He also mentioned a promissory note executed by Kirti Zaveri and stated that the current market value of the two flats is approximately ₹4 crore. He contended that the new developers should honour the commitments made by the previous entity.
Respondents’ Stand
Rajvi Builders strongly denied any liability. They submitted that there was no privity of contract with the complainant. All payments were made to Zaveri Constructions, and no Agreement for Sale was executed with them.
The society had lawfully terminated the Development Agreement with Zaveri Constructions due to non-performance. A public notice regarding the termination was published in The Times of India in February 2018. The society then executed a fresh Redevelopment Agreement with Rajvi Builders on 21/11/2019. Zaveri never challenged this termination.
The respondents relied on the Bombay High Court judgment in Vaidehi Akash Housing Pvt. Ltd. v. New D.N. Nagar CHS Ltd. (2014), arguing that third-party buyers cannot claim rights superior to those of the original developer once the agreement is terminated.
They also pointed out that Lamba had already initiated criminal proceedings (cheque bounce case) against Zaveri in the Metropolitan Magistrate Court, showing he treated Zaveri as the liable party.
MahaRERA’s Decision
After hearing the matter (respondent remained absent on the final date), MahaRERA ruled in favour of the developers. The Authority held:
- No contractual relationship existed between the complainant and the present respondents.
- The allotment letter and payments were solely with Zaveri Constructions Pvt. Ltd.
- There was no evidence that Rajvi Builders assumed the liabilities of the previous developer.
- Rights of purchasers claiming through an old developer are limited and cannot be enforced against a new developer after lawful termination of the original agreement.
- The Vaidehi Akash Housing precedent squarely applies to this case.
The complaint was rejected with no order as to costs.
Legal Position and Implications for Homebuyers
This order reinforces a long-standing principle in Maharashtra redevelopment law: when a cooperative housing society validly terminates the Development Agreement with a developer, buyers who booked flats through that developer generally cannot force the society or the new developer to honour old commitments unless the new developer expressly takes over those liabilities.
Buyers’ rights are considered “derivative.” Once the original developer’s rights end, so do the rights of those who contracted with him.
However, the legal landscape is evolving. Recent rulings, including the NCDRC’s decision in Sandeep Grover v. Sai Siddhi Developers (affirmed by the Supreme Court), have taken a more buyer-friendly view. These judgments suggest that societies cannot easily escape liability by citing lack of privity if the developer sold flats with the society’s knowledge, treating the developer as an agent of the society.
Homebuyers in ongoing or stalled redevelopment projects should take note of this order. Key lessons include:
- Insist on a registered Agreement for Sale early in the process.
- Conduct thorough due diligence on the status of the Development Agreement with the society.
- In case of developer change, verify if old allottee liabilities have been formally assumed.
- Keep all payment records and correspondence meticulously.
- Consider that remedies may ultimately lie only against the original developer, who may be financially weak.
This case once again underscores the vulnerability of homebuyers who rely heavily on allotment letters and verbal assurances in complex redevelopment deals. Thousands of families in Mumbai and surrounding areas remain stuck in similar situations.
Squarefeatindia will continue to track such cases and update readers on legal developments that directly impact homebuyer rights under RERA.
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