MahaRERA Imposes ₹10 Lakh Penalty on CCI Projects Pvt Ltd for Delayed Possession

Overview

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has levied a ₹10 lakh fine on CCI Projects Pvt Ltd for failing to comply with its 2018 directive to hand over possession of six flats in Borivali (East) by June 2019. Additionally, the authority has mandated the builder to pay 9% annual interest on the ₹8.4 crore paid by homebuyers Rajesh and Suruchi Joshi, calculated from September 2016 until possession is granted.

Case Background

Project Name: Wintergreen, a residential project launched in 2012.
Homebuyers’ Investment: The Joshis booked six flats in 2012 and paid 96% of the total cost (₹8.4 crore) upfront.
Promised Possession Date: February 2016 (later extended to June 2019).

Despite substantial payment, the buyers did not receive possession. In October 2018, MahaRERA directed the builder to hand over the flats by June 30, 2019. The developer’s failure to meet this deadline prompted the Joshis to seek penalties under Section 63 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act), which allows for fines of up to 5% of the project cost for non-compliance.

MahaRERA’s Directive

On December 2, 2023, MahaRERA member B.D. Kapadnis issued an order:

1. ₹10 lakh penalty on CCI Projects Pvt Ltd for failing to comply with MahaRERA’s 2018 directive.

2. 9% annual interest on the ₹8.4 crore paid by the Joshis, starting from September 2016 until possession is granted.

3. Condemned the builder’s conduct, stating that they played a “fraud on the allottees and the authority,” dismissing excuses about unforeseen delays.

Developer’s Defense and MahaRERA’s Rebuttal

CCI Projects Pvt Ltd, represented by Abir Patil, argued that:

• The delay was due to liquidity issues, as a financier withheld a ₹130 crore loan.

• They applied for relief under the Centre’s Last Mile Revival Scheme to complete construction.

• They claimed eligibility for an extension under the RERA Act since the project was already ongoing when the law took effect in 2016.

However, MahaRERA rejected these arguments, highlighting that:

• The builder failed to provide valid reasons for the delays.

• There was no proper documentation or proof regarding the utilization of funds.

• Despite receiving 96% payment, the developer showed inaction in handing over possession.

Why Do Such Issues Occur?

The case of CCI Projects is not an isolated incident—Maharashtra has witnessed a significant number of delayed real estate projects. Some common reasons include:

1. Financial Mismanagement – Developers often over-leverage themselves or divert funds to other projects, causing cash flow issues.

2. Regulatory Approvals – Delays in getting approvals from local authorities can extend project timelines.

3. Legal Disputes – Many projects get stuck due to litigation over land titles, environmental clearances, or contractual issues.

4. Market Slowdown – Economic downturns impact sales, leading to liquidity crises for developers.

5. Misuse of Buyer’s Money – Some developers misuse funds collected from homebuyers without completing the promised construction.

How Can These Issues Be Resolved?

1. Stronger Enforcement of RERA
   MahaRERA and other state RERA bodies must ensure strict compliance with project timelines. Heavier penalties and blacklisting of non-compliant developers could serve as deterrents.

2. Financial Transparency
   Developers must be required to disclose project finances in real-time to authorities and homebuyers. The escrow account system (mandating developers to use 70% of funds only for the same project) should be strictly enforced.

3. Fast-Track Dispute Resolution
   RERA Tribunals should have dedicated benches for expediting real estate cases. Delayed projects should be taken over by government-appointed administrators in severe cases.

4. Stronger Buyer Awareness
   Buyers should thoroughly check a project’s RERA registration and the developer’s track record before investing. Legal advice should be sought before signing agreements to ensure protection in case of delays.

Broader Implications

This ruling by MahaRERA sends a strong message to developers that financial or operational issues will not be accepted as excuses for delayed possession. With over 1,441 homebuyer complaints in Maharashtra, this case reaffirms MahaRERA’s role in curbing real estate malpractices.

Under the RERA Act, 2016, real estate authorities across states are empowered to:

1. Fine developers up to 5% of the project cost for prolonged delays.

2. Deregister projects and allow buyers to seek refunds with interest.

3. Blacklist defaulting builders, preventing them from launching new projects.

Conclusion

The Joshis’ case highlights the increasing effectiveness of RERA regulations in protecting homebuyers. The ₹10 lakh penalty and 9% interest order set a clear precedent for errant developers across India. Buyers should exercise caution while investing and be aware of their legal rights under RERA. Meanwhile, regulatory bodies must strengthen oversight and ensure timely project completion to restore trust in India’s real estate sector.