MahaRERA Orders Honest Shelters to Transfer Flats to IIFL

MUMBAI: The Maharashtra Real Estate Regulatory Authority (MahaRERA), in a detailed order issued on January 16, instructed Honest Shelters to hand over possession of six flats in the “Palais Royale” project located in Worli to India Infoline Finance Limited (IIFL). Additionally, the regulatory body directed the promoter to pay interest to IIFL for the delayed possession of the flats.

The order, issued by MahaRERA chairman Manoj Saunik, also mandated the official liquidator to transfer possession of the flats currently under his custody to the promoter.

This transfer was aimed at enabling the completion of construction work. Following the completion of construction, Honest Shelters was instructed to hand over possession of the flats to IIFL along with an occupancy certificate, ensuring compliance with all legal and regulatory requirements.

The history of the Palais Royale project traces back to an auction conducted in 2019 by Indiabulls Housing Finance, through which Honest Shelters Private Limited acquired the project from Shree Ram Urban Infrastructure Limited (SRUIL).

Parallelly, IIFL had acquired the flats in question from the original flat purchasers through a deed of transfer cum assignment. This transaction stemmed from the non-fulfillment of conditions related to the mortgage deeds of the flats by the original purchasers.

Following these developments, Honest Shelters issued a demand-cum-termination notice to IIFL, requesting the payment of outstanding dues, including the transfer fees for the flats.

In response, Honest Shelters approached MahaRERA, seeking a directive to execute a cancellation deed regarding the flats in question.

Meanwhile, IIFL filed complaints against the promoter, demanding possession of the flats and claiming compensation in the form of interest for the delayed handover.

The promoter presented several arguments during the case. They contended that merely restating clauses from the deed of assignment did not automatically grant IIFL ownership rights, titles, or interests in the flats.

Furthermore, the promoter claimed that IIFL had failed to submit necessary documents, such as receipts or records of payments made for the flats, despite repeated reminders and emails.

Honest Shelters also highlighted that the deed of transfer cum assignment was executed before they took over the project from SRUIL, suggesting that IIFL’s claims were not applicable under the current circumstances.

On the other hand, IIFL presented a contrasting narrative. They argued that the flats in question were not included in the auction conducted under the SARFAESI Act.

IIFL further stated that the original flat purchasers had agreed to sell and transfer their rights over the flats, thereby making IIFL a legitimate allottee of the properties.

According to IIFL, Honest Shelters failed to hand over possession of the flats as stipulated in the agreement for sale, thereby breaching the terms of the contract.

After a detailed review of the case, MahaRERA issued its findings. The authority determined that the original allottees of the flats had made complete payments towards the cost of their properties in line with their agreements.

It also confirmed that IIFL held the status of an allottee for the subject flats. MahaRERA dismissed the promoter’s claim that the allottees had defaulted on their obligations as outlined in the agreement, finding no substantial evidence to support this assertion. Additionally, the termination notices issued by Honest Shelters were declared invalid.

MahaRERA concluded that the promoter had failed to deliver possession of the flats, complete with an occupancy certificate, within the timelines specified in the agreements.

This failure constituted a breach of the contractual obligations, prompting the regulatory body to order Honest Shelters to hand over possession of the flats to IIFL.

The promoter was further directed to compensate IIFL with interest for the delay in possession, adding a financial burden as a penalty for their non-compliance.

This order reinforces the regulatory authority’s commitment to protecting the rights of homebuyers and financial institutions by holding promoters accountable for project delays and ensuring adherence to contractual commitments.