Maharashtra State Commission Holds ERA Realtors And Omkar Realtors Liable For Delay In Delivery Of Flat And Making Misleading Promotions

Brief facts:

The complainant booked a residential flat in the project titled- 'Omar Alta Monte' situated at Malad (East), Mumbai being developed by ERA Realtors Pvt. Ltd. ('promoter') and Omkar Realtors & Developers P. Ltd. ('landowner'). The promoter and landowner are referred to as 'opposite parties'.The total consideration for the flat was Rs. 1.73 crores out of which Rs. 1,09,70,037/- was already paid. An agreement for sale was entered into between the parties on 26.03.2018. The possession of the flat was to be delivered by June 2019 as per clause 28 of the agreement. However, despite repeated assurances, advertisements and brochures, the opposite parties failed to deliver possession even after several years.

As per the complainant, he continues to bear the burden of rent for alternate accommodation. It was stated that false promises and unilateral changes in RERA possession timelines reflect unfair trade practices. A legal notice dated 08.11.2021 was issued by the complainant to which the opposite parties failed to reply. Hence, a complaint was filed by the complainant before the Mumbai State Commission praying for appropriate compensation.

Submissions of the opposite parties:

As per the opposite parties, the complaint was barred by limitation since it was filed beyond the statutory period of limitation. It was contended that the agreement for sale contains an arbitration clause and hence, the commission has no power to try the dispute. It was further stated that as per clause 14 of the agreement, the opposite parties are entitled to extension in possession timelines due to force majeure conditions. It was argued that the agreement also provided for a grace period of one year.

It was further submitted that any claim for interest should exclude the period from 26.08.2024 to 23.01.2025 due to a litigation which resulted in a halt in the construction activity. The opposite parties also relied on the circulars issued by RERA declaring a moratorium period due to Covid-19 which led to shutdown of construction activities.

It was further submitted that the complainant had failed to make the payment of remaining consideration and that the complainant's claim for interest @ 18-24% was excessive.

Observations of the commission:

Issue 1: whether the complaint was barred by limitation?

The bench observed that the cause of action is continuous and recurring since possession has not been delivered yet. Therefore, the complaint was held to be within the limitation period.

Issue 2: whether the complaint is maintainable in view of the arbitration clause in the agreement?

The bench observed that presence of an arbitration clause does not prevent a consumer from filing a complaint in the consumer forum. It was held that as per the Consumer Protection Act, 2019, the jurisdiction of the consumer commission is in addition to and not in derogation of any other remedy available to a complainant. Hence, the complaint was held to be maintainable.

Issue 3: whether there is deficiency in service and unfair trade practice on the part of opposite parties?

The bench observed that there has been a significant delay of nearly 5 years beyond the agreed date of possession which cannot be justified by citing force majeure events such as Covid-19 and third party litigation. It was further observed that validity dates of project registration of various projects have been extended on account of prevailing Covid-19 pandemic without any change in agreement of sale executed between the parties. It was further observed that project completion date and date of handing over possession of flat are distinct subjects and cannot be interchanged.

It was further observed that the promoter cannot be absolved of its contractual liabilities as stipulated in the agreement for sale without prior mutual consent of all parties. The bench observed that the circulars issued by Maharashtra RERA extending the validity of registration period applied where completion date had expired on or after March 2020. But in the present case, the agreed timeline for possession was June 2019 and Covid started only from March 2020 due to which the circulars were inapplicable.

On the contention that the agreement provided a grace period of one year for possession, the bench relied on the decision of the Supreme Court in Pioneer Urban Land Infrastructure vs Govindan Raghavan (2019) wherein it was held that having a grace period is untenable, one sided and even frivolous in nature.

Hence, the bench held the opposite parties liable for deficiency in service for failing to adhere to RERA timelines and unilaterally extending the possession dates without the buyer's consent. Additionally, the bench also held them liable for unfair trade practice under Section 2 (47) of the Consumer Protection Act, 2019 for use of misleading promotional materials.

Hence, the complaint was allowed in part with the following reliefs:

1. The opposite parties were directed to hand over the possession of the flat to the complainant along with occupancy certificate and amenities.

2. Interest @8% p.a. On the amount deposited by the complainant.

3. Rs. 1,00,000 as compensation and Rs. 25,000 as litigation costs to be paid jointly by opposite parties

Case Title: Kanji Vagha Vaviya vs ERA Realtors Pvt. ltd.

Case Number: CC/22/98

Advocate for complainant: Sulaiman Bhimani

Advocate for opposite parties: Kinjay Upadhyay and Jayesh Vyas

Date of Decision: 29.07.2025

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