Mumbai High Court issues show cause notice to collector for defying order to confiscate developer’s flat

Mumbai, 2nd May 2023: The Mumbai High Court has issued a show cause notice to Mumbai Collector Rajiv Nivatkar for deliberately violating a court order to confiscate a flat owned by a developer in Mahim.

The notice asks why action should not be taken against Nivatkar for disobeying the order. The court issued the notice on a contempt petition filed by the flat buyer Ashok Paranjape and his wife, who sought compensation from the developer for the delay in possession of their flat.

The court also issued a show cause notice to the official representative of developer Aversaker Realty for defying a March 2023 order. The order required the developer to explain why the compensation amount for the delay in possession of the flat was not disclosed, along with the details of the proceeds from the sale of the flat. The developer filed an affidavit on March 25 and fixed the flat for the petitioners. However, the court upheld the contention of the petitioners that the developer concealed information and deliberately did not comply with the March 8 order.

According to the petitioners, the developer had funds to pay the compensation, and a flat in the project was sold to a Rajya Sabha member for Rs 6 crore. In 2012, Paranjape had paid more than Rs 2.5 crore for a flat in a project in Mahim called Srishti Sea View. Under the Real Estate (Regulation) Act, 2017, Paranjape had demanded interest on the amount already paid by the developer. The Maharashtra Real Estate Regulatory Authority (Maharera) had in 2020 ordered the developer to pay more than ten percent interest on the amount from February 2015 until possession.

In January 2021, Maharera ordered the seizure of four unsold flats and ordered the payment of interest on compensation to the petitioners from the sale of these flats by sending a copy to the Collector. However, the court was told on behalf of the petitioners that this order was not being followed by the Collector.

In July 2021, the RERA Appellate Tribunal upheld the compensation order. In September 2022, the High Court also directed the Collectors to comply with these orders. However, the petitioners found that the orders were not being implemented, and they approached the court again.

This case highlights the importance of compliance with court orders and the role of regulatory authorities in enforcing regulations related to real estate. The Real Estate (Regulation) Act, 2017, was enacted to boost the real estate sector and ensure timely possession of flats. The Act provides for the establishment of regulatory authorities to oversee the real estate sector’s functioning and ensure compliance with the provisions of the Act.

The failure to comply with court orders and regulatory provisions can result in delays and financial losses for homebuyers. In this case, the delay in possession of the flat has caused financial hardship to Paranjape, who had paid a substantial amount for the flat in 2012. The court’s decision to issue a show cause notice to the Collector and the developer is a step towards holding them accountable for their actions and ensuring compliance with court orders.


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