MahaRERA Grants Homebuyers Development Rights in Landmark Clan City Order, Key Highlights:
- Project & Context: MahaRERA revoked registration of the 16-year-old unfinished Clan City project in Rohinjan, Taloja, following 154 complaints against Supreme Construction and Developers Pvt Ltd.
- Unique Ruling: Homebuyers association and housing society granted the right to complete the project themselves or engage a new developer.
- Issues Cited: Delays due to non-compliance by the promoter, diversion of funds, absence of viable completion plan, and pending court injunctions affecting construction.
- Protective Measures: Project declared “stressed”; developer restrained from fresh sales, marketing, or creating third-party rights; court-monitored mechanisms like escrow accounts recommended.
In a precedent-setting decision, the Maharashtra Real Estate Regulatory Authority (MahaRERA) ordered not only the revocation of registration for the 16-year-old unfinished Clan City project in Rohinjan near Taloja but also granted the homebuyers association and housing society the right to complete the remaining development themselves.
The order arises from 154 connected complaints filed by allottees against Supreme Construction and Developers Pvt Ltd and associated parties. The township was registered in nine separate phases under different MahaRERA project numbers and consists of nine 34-storey buildings. Complainants had sought varied reliefs, including possession of flats with interest, compensation, refund, revocation of project registration, and permission to hand the project over to another developer under Sections 7 and 8 of RERA.
“Many of us booked flats here from 2010 onwards,” said Kanchan Sharma, one of the heads of the Association of Allottees. “It was only in 2013 that the ground work actually commenced and the deadline was set at 2017, which wasn’t met with. In 2017, the developer asked for more money. The deadline was revised to March 2024, which once again lapsed.” as per HT.
During hearings, MahaRERA member Mahesh Pathak highlighted that no deadline extension application had been filed by the builder. Additionally, pending litigation involving landowners and an ad interim injunction granted by the Bombay High Court in April 2022 had affected construction progress.
To resolve the matter, MahaRERA set up a special conciliation panel, which conducted multiple hearings. Its final report, submitted on January 5, concluded that “Conciliation Failed.” The panel observed several serious issues, including persistent non-compliance by the promoter with MahaRERA orders, alleged diversion of project funds, absence of a viable completion plan, unviable escalation demands, and lack of transparency regarding future phases and available FSI.
MahaRERA also noted that the project had secured sanctions from MMRDA as a “Rental Housing Scheme” in 2010. The panel emphasized that completing the project would require substantial funding and that the sale of unsold inventory is currently restrained due to the Bombay High Court injunction. Consequently, it recommended that the authorised Association of Allottees be allowed to approach the court for appropriate reliefs, including:
- Court-monitored sale of unsold units
- Establishment of escrow mechanisms
- Protection of landowners’ rights
- Pursuit of additional FSI or statutory benefits
- Engagement with MMRDA to resolve the rental housing component
In its landmark order, MahaRERA declared the Clan City project “stressed” and restrained the developer from any fresh sales, marketing, advertisements, or creation of third-party rights.
“We are still consulting lawyers,” said Sharma, discussing the association’s next steps. “It’s too early to decide whether we will go in for self-development or through a developer.”
Legal experts say the order has far-reaching implications. As per, HT, Parth Chande, who represented the homebuyers association, noted: “A project that has not been completed for over 15 years has been given the necessary directions and guidelines for completion. This order sets the stage for the possible revocation of a project’s registration and handing it over to another developer. It’s a ray of light at the end of a dark tunnel.”
The order signifies MahaRERA's commitment to safeguard the rights of property buyers and at the same time providing a mechanism to complete long, stalled projects. Besides, it establishes a legal precedent giving homebuyers the power to take the project completion into their own hands by either continuing the work themselves or bringing in a new developer, thus making sure that frozen projects will eventually get finished.
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