Maharashtra State Commission Orders ERA Realtors & Omkar Realtors to Deliver Delayed Flat, Terms Misleading Promotions as Unfair Trade Practice
Pranav B Prem
The Maharashtra State Consumer Disputes Redressal Commission, comprising Presiding Member Mukesh Sharma and Member Poonam Maharshi, has held ERA Realtors Pvt. Ltd. and Omkar Realtors & Developers Pvt. Ltd. liable for deficiency in service and unfair trade practice in connection with their project Omkar Alta Monte in Malad (East), Mumbai.
The complaint was filed by Kanji Vaviya and Rahul Vaviya, who had booked Flat No. B-2404 in Wing B of the project for a total consideration of ₹1.73 crore. By March 2018, the complainants had paid around ₹1.10 crore through self-funding and home loans. The agreement promised possession by June 2019, but despite repeated follow-ups, advertisements, and assurances, the developers failed to deliver possession or obtain an occupancy certificate. The complainants alleged that they continued to incur rental expenses for alternate housing, and the project’s exposed RCC structure raised serious safety concerns.
The complainants also accused the developers of misrepresenting facts, including naming L&T as the construction contractor but later replacing it without notice, and of unilaterally updating MahaRERA timelines to December 2024 without buyer consent. They further alleged that demand notices were raised for slab completions even though construction was incomplete. After a legal notice sent in November 2021 went unanswered, the buyers approached the Commission seeking possession, interest at 18% per annum, or refund of the amount paid.
The opposite parties contested the complaint, raising preliminary objections on limitation and jurisdiction. They argued that the agreement contained an arbitration clause binding the parties to arbitration. They further cited force majeure events such as COVID-19 lockdowns, litigation by third parties, and environmental clearance delays as causes of delay. It was also argued that the project being a slum rehabilitation scheme, coercive directions could jeopardize completion and harm multiple stakeholders. The developers claimed that the complainants themselves defaulted in payments of around ₹6.64 lakh, contributing to fund shortages. They sought exclusion of the moratorium period, third-party litigation period, and COVID-related delays while computing liability.
The Commission rejected these objections. It held that the cause of action was continuous, as possession was still not delivered, making the complaint within limitation. Referring to Emaar MGF v. Aftab Singh (2019), it clarified that arbitration clauses do not bar consumer forums from entertaining complaints. On merits, the bench found the developers guilty of deficiency in service, noting a delay of nearly five years beyond the contractual possession date. It ruled that COVID-related extensions were inapplicable since the agreed possession date was June 2019, prior to the pandemic. It also rejected the “grace period” clause as one-sided and untenable, relying on the Supreme Court ruling in Pioneer Urban Land Infrastructure Ltd. v. Govindan Raghavan (2019).
The Commission further found the developers guilty of unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019, for making misleading representations, substituting contractors, and unilaterally revising RERA timelines without buyer consent. It relied on precedents including Arifur Rahman Khan v. DLF Southern Homes (2020) and Imperia Structures v. Anil Patni (2021), which held that failure to deliver possession within stipulated timelines constitutes deficiency in service.
Accordingly, the Commission directed ERA Realtors and Omkar Realtors to jointly hand over possession of the flat with occupancy certificate and amenities within two months, subject to the complainants paying any outstanding dues. It also ordered the developers to pay interest at 8% per annum on the ₹1.10 crore paid by the complainants from July 2019 till delivery of possession, along with ₹1 lakh as compensation and ₹25,000 towards litigation costs.
Appearance
For complainant: Sulaiman Bhimani, Advocate
For opposite parties: Kinjay Upadhyay, Jayesh Vyas, Advocates
Cause Title: Kanji Vagha Vaviya V. ERA Realtors Pvt. ltd.
Case No: CC/22/98
Coram: Hon’ble Mr. Mukesh V. Sharma (Presiding Member), Hon’ble Ms. Poonam V. Maharshi (Member)
