THE MAHARASHTRA REAL ESTATE REGULATORY AUTHORITY

MUMBAI.

1. COMPLAINT NO: CC006000000192458.

Gauri Thatte ... Con-rplainant.
Versus
1. Nirmal Developers
2. Dharrnesh Jain
3. Shapoorji Palonjee Pvt Ltd ...Respondents.

2. COMPLAINT NO: CC005000000192886.

Nilesh N{aru ... Complainant.

3. COMPLAINT NO: CC006000000192888.

PN Kutty Nair Shekharan ... Complainant.
Versus
1. Nirmal Developers
2. Dharmesh Jain (Deleted)
3. Shapoorji Pallonji Development Managers Private Limited
4.VenkateshGopalkrishan (Deleted)
5. Rajesh Krishnakumar Baxi (Deleted)
6. Vijay Shreenivas Karanam (Deleted) Respondents.

4. COMPLAINT NO: CC006000000193078.

Mathew K Alex and Ruby Matherv ... Cornplainant.
Versus
Nirmal Developers, Shapoorji Pallonii and Company Pvt Ltd
.. . Respondents.

MahaRERA Regn: P51800012383.

(Olympia C D)

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 Coram: Shri B.D. Kapadnis, Member-ll, MahaRERA.

Appearance:
Complainants: Adv. Mr. Harshad Bhadbhade at Sr. No. L.
C.A. Mr. Ashwin Shah at Sr. No. 2 &3.
Adv. Mr. Rajeshwar Deshmukh at Sr No. 4.
Respondents: Ms. Vaishali Mohite for Nirmal.
Adv. Mr. Aftab Diamondwala for Shapoorii
Pallonji

FINAL ORDER
5th March 202L

Whether the development manager having exclusive right to sell the

units of the project comes under the definition of promoter is the important
legal issue involved in these complaints. The complainants contend that
they have booked their flats in the respondents' registered project
"Mumbai Dreams - Olympia C D" situated at Mulund West' They have
been claiming refund of their amounts under section 12 of The Real Estate

(Regulation and Development) Act, 2016, (RERA) by furnishing the

following material facts.
Names of the Flat
Conrplaint Nos. Consideration Paid
Complainant nos.

cc006/ 192-1s8. Gauri Thatte 3207 Rs.73,95,996/-

cc006/ 192886. 1801 Rs.9,80,509/-

Nilesh Maru
1802 Rs.9,22,776/ -

cc006/ L92888. P N KuttY Nair 2001 Rs. 9,30,508/-

Shekharan 2002 Rs. 9,72,775 /-

Mathew K Alex and

cc006/ 193078. 2201 Rs.15,27,845/-
Ruby Mathew

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2. Ms. Gauri contends that at the time of booking of the flat, she was
made to believe on the basis of the proposed date of completion mentioned

on MahaRERA website, was 30.06.2019. Now the respondents have

unilaterally revised it to 31J22024 and therefore she claims refund of her

amount on the basis of the false statement of the respondents regarding the
date of possession. she prays that M/s. shapoorji Pallonji Private Limited

be added as promoter on the webpage of the respondents.

3. Mr. Nilesh and Mr. P. N. Kutty Nair Shekharan contend that at the
time of booking of the flats they were made to believe that Shapoorji
Palonjee Pvt. Ltd. would construct the project and the excavation work

would start within three months and the construction would start in fu1l
swing but since the date of booking i.e., till January 2019 no progress is
made in conskuction. The booking was accepted though there wasn't valid

corrmencement certificate as it expired on 29.01.2017 itself. Therefore, they

seek the refund of their amount with interest.
4. Mr. Mathew and Ms. Ruby submit that even after booking the flat
on 09.06.2018 and paying Rs. 15,27,845/- out of total consideration of Rs.
7,53,72,176/-, the respondents did not execute the agreement for sale and
thereby they contravened section 13 of RERA. The respondents failed to
commence the construction $'ork in the month of October 2018' as
promised and therefore the complainants withdraw from the project and
claim refund of their amount with interest'
5.Allthecomplainantsdonotpressforcompensation.Ithasalsobeen
arguedonbehalfofthecomplainants,advocatesthatShapoorjiPallonji
Private Limited is also liable to refund the amount, it being the promoter
under the definition of the promoter
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6.M/s.ShapoorjiPallonjiPrivateLimitedhasfiledtherepliesto
contend that, Nirmal Developers and Mr. Dharmesh Jain are the Promoters
oftheprojectknownasCodeName-MumbaiDreamssituatedatMulund
west. They appointed shapoorji Pallonji Private Limited's subsidiary
Lucrative Properties Private Limited as Development Manager for
providing assistance in the management, planning, superwision of the
project and use of their brand name for the fees to be paid and on the terms
ancl conditions mentioned in the develoPment management agreement
d,ated27.O4.2O18. By that time, Nirmal Developers already sold 1.71 lakh
sq. ft. or thereabout residential area to the prospective purchasers'

Lucrative Properties Private Limited undertook the responsibility of

marketing and branding the project for fees' Nirmal Developers being the
promoters are always liable for all the compliances and obligations

towards the purchasers of the units. The money paid by the complainants
has gone to Nirmal Developers and they are developing the project'
The

name of Lucrative Properties Private Limited is mentioned

in the category
of the project
of "Other Professional" and not as promoter on the web page
Therefore, the complaints are not maintainable against Lucrative
Managers
Properties Private Limited and Shapoorji Pallonji Development
Private Limited.
7. Nirmal Developers ancl Mr' Dharmesh Jain have filed the reply in
complaints filed by P N Kutty Nair Shekharan and Mr'
Mathew Alex
not allottees
and Ruby Mathew. They contend that the complainants are
and their complaintsfor getting refund of their amount are not
for sale have
maintainable under section 18 and 19 of RERA as agreements
not been executed in their favour' According to them' the
promoter
allottees
becomes liable to refund or to pay ilterest on the amount of the

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only when he fails to handover the possession on the date of completion
mentioned by him in the registration application' The complainants never
intended to purchase units for their residence and therefore, the

respondents request to dismiss the complaints. In alternative, they submit

that without prejudice to above contentions the respondent would pay the
amount within six months from the date of the order in equal instalments.
8. Heard the learned advocates and representatives of the parties at
length on virtual platform. Perused the documents'
9. Before entering into the arena of controversy it is necessary to note
that advocare Mr. Aftab Diamondwala apPears for Shapoorji Pallonji
private limited which is one of the parties in the complaints' The
developmentmanagementagreementdated2T.04.2ol8hasbeenexecuted
by M/ s. Nirmal Developers (referred to as developer) and Lucrative
Properties Private Limited (referred to as development manager)'

Lucrative Properties Private Limited is a subsidiary comPany of Shapoorji

pallonji Private Limited. Though Mr. Diamondwala has filed the reply on

behalf of shapoorji Pallonji Private Limited, he has defended Lucrative

Private
Properties Private Limited. Hence, I find that Lucrative Properties
Limited has appeared in these matters though it has not been arrayed
as

respondent and the replies filed by Shapoorii Pallonji Private Limited

are

filed for its defence. Hence, they are treated to be the repiy of Lucrative
Properties Private Limited. I hold that Lucrative Properties Private Limited

is a party to these complaints. I have rejected the idea

of being cynical and

technical as it would defeat the ends of iustice as Shapoorji

Pallonii is the

principal comPany and Lucrative Private Limited is its

subsidiary'
Lucrative Private
Shapoorji Pallonji is made party and rePresents itself and

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Limited "by applying the principle of representation" ' Lucrative Private
Limited is deemed to be party to these complaints which has been ably
defended by Mr Aftab Diamondwaia.
10. The learned advocates of the complainants have submitted in one
voice that shapoorji Pallonji Private Limited is a promoter and for that
purpose they have relied upon the definition of the promoter defined
under section 2(zk) of The Real Estate (Regulation and Development) Act,
2016, the relevant portion thereof reads as under:

"2.(zk) "promoter" means, -

(i) a person who constructs or causes to be constructed an
independent building or a building consisting of apartments, or
converts an existing building or a part thereof into apartments, for
the purpose of setling all or some of the apartments to other Persons
and includes his assignees; or
(i, ***

(iii) ***
(ir) *""
(v) any other person who acts himself as a builder, coloniser'
conhactor, developer, estate developer or by any other name or
claims to be acting as the holder of a power of attorney from the
owner of the land on which the building or apartment is constructed
or plot is developed for sale; or
(vi) such other person who constructs any building or apartment for
sale to the general Public.

Explanation. For the Purposes of this clause, where the person

-
who constructs or converts a building into apartments or develops
a

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 plot for sale and the persons who sells aPartments or plots are

different Persons, both of them shall be deemed to be the Promoters

and shall be jointly liable as such for the functions and

responsibilities specified, uncler this Act or the rules and regulations

made thereunder;"
11. Now, on this touchstone it is necessary for me to look at the
agreement entered into with Lucrative Properties Private Limited on

which both the parties place their reliance' On perusal of development

management agreement d'ated 27.04'2018, it is seen that it has been
executed by M/ s. Nirmal Developers (referred to as developer) and
Lucrative Properties Private Limited (referred to as c-levelopment
of
manager). Lucrative Properties Private Limited is a subsidiary company
Shapoorji Pallonji Private Limited.
have
a. Ciause 3 of the agreement provides that, Nirmal Developers
appointed Lucrative Properties Private Limited as the exclusive
development manager to perform obligations as specified in the agreement
in respect of the project for consideration specified therein'
b. Clause 3.2.1 thereof provides that from condition precedent
Private
completion date, the development manager (Lucrative Properties
of branding
Limited) wiil associate the Brand Name solely for the purpose
Manager for the
and Marketing the Project in its capacity as Development
Project.

c. Clause 3.2.5 shows that they agreed that the name of the

logos shall
Development Manager and the Developer and their respective
and all print
appear on all the brochures, parnphlets, handouts' websites'
and electronic media for Marketing the Project' as per
branding policies in
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 by the
terms of the Brand Licensing Agreement and as may be approved
Development Manager'
Clause 4.2 provides that, during the term of the agreement'
the
d.
development manager shall in addition to all other functions of
exclusive
development manager as contained in the agreement have the
right to
4.2.1-. manage, plan, supervise the project up to completion thereof

and
4.2.2 prepare the mutually agreed business plan in terms of the
agreement.

e. Clause 7.1.9. provides that, the development manager shall have the
per
exclusive and/ or absolute right to market and sell the saleable Area as
terms as mentioned in this agreement and in accordance with the Business
Plan.

f.ClauseT.l,.2Tprovidesthat,aspartoftheoverallresponsibilityof
the Development Manager, the Development Manager shall also
undertake al1 the activities in respect of the customer management inter
alia including sales Process, sales closure, marketing' customer
interactions, customer relationship management, handover of possession'
assistance in formation of society etc' on behalf of the Developer'

The respondents have relied upon clause no' 7 '2'22 wherein it ts

C.
mentionedthat,theDevelopermeanstheNirmalDevelopersshallatall
times be solely construed to be a Developer / Promoter under the
provisions of any Applicable Laws, including RERA and amendments
thereof ancl shall be solely liable for all the compliances and the obligations

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 shall bear all
therein and the Developer shall be exclusively liable for and
and the same
claims and liabilities with respect to the purchasers of units
for sale of
shall be reflected in all documents executed with the purchasers
any of the units. Therefore, the respondents have contended
that' if any
and
money is to be refunded, it is to be refunded by Nirmal Developers
Shapoorji Pallonji is not responsible for it'

C. In continuation of earlier sub-clause, clause no' 7'2'23 provides that

theDevelopershallbearallclaimsandliabilitiesthatmayariseinthis
of
regard including delay in Completion of the Project and consequences
the same.

h. Clause 7 .2.25 provides that, Developer shall execute the agreement

andtheamountcollectedshallbedepositedinthebankaccountonly.The
Development Manager will raise invoices, and the Developer shall
sign

such invoices such as to ensure timely dispatch of the invoices

to the flat

purchasers.

i. Clause 11.1.2' provides for consideration' The Development

Manager in lieu of providing services, the Developer agrees'

confirms and

undertakes to Pay the Development Manager' the Development

Management Fee consisting of following components:

For all area other than Presold Area

(i) Branding and marketing fee equivalent to 1% (Or-re percent)
Area
of the Revenue plus aPplicabie taxes in respect of the Saleable
save and excePt the Presold Area;
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 (ii) development management fees for other Services equivalent
to 9% (Nine percent) of the Revenue plus applicable taxes in respect
of the Saleable Area save and except the Presold Area;

For presold Area

(i) Branding and marketing fee equivalent to 0'5% (half percent)
respect of
share of the gross Revenue plus applicable taxes only in
Presold Area;
(ii) development management fees for other Services equivalent
to 2% (Two percent) share of the gross Revenue plus applicable
taxes orrly in respect of Presold Area; and

Manager
These fees are to be paid by the Developer to the Development

every month.

j. Clause 13.2. 1 relates for shortfall funding lt provides that in the

be met from
event of any requirement of funds in the project which cannot
the same
the Revenue/ Project receivables and the Project Funding then
shall be sourced in the following manner'
i . (ll) Development Manager shall be entitled to sell the
Clause 13.2.

Saleabie Area at discounted rates which cannot be lower

than the
the aforesaid
minimum sales prices agreed with the new Lender' However'
Manager only
sales at discounted prices shall be done by the Developrnent

forsuchquantumofsalestillProjectmeetstheshortfallfundingandthe
after meeting
same shall be discontinued by the Development Manager
shortfallfundingrequirement' +-- \ .

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 Clause 13.2.2provides that, the development manager shall fund
up
ii.
to the amount which shall not exceed the outstanding amount of
Rs'

100,00,00,000/- (Rupees One Hundred Crores Only)' from time

to time
at the rate
based on the Business Plan titl the Completion Date, on interest
payable
of 18% (Eighteen per cent) per annum compounded annually and
annually.
12. I have gone through these clauses of the agreement Now' on this
background it is necessary to look at the definition of the Promoter'
Promoter means,
(i) a person who constructs or causes to be constructed an
independent building or a building consisting of aPartments' or
converts an existing building or a Part thereof into apartments' for
persons
the purpose of selling all or some of the apartments to other

and includes his assignees'

(vi) such other person who constructs any building or apartment for
sale to the general Public.
who
Explanation. -For the purpose of this clause, where the person
a plot
constructs or converts a building into apartments or develops
for sale and the Persons who sells aPartments or plots are different
and shall
persons, both of them sha1l be deemed to be the Promoters

be jointly liable as such for the functions and responsibilities

made
specified, under this Act or the rules and regulations
thereundeu"
They
13. The learned advocates have laid emphasis on the explanation'

submitthatafterclause(i)theiegislaturehasdevisedclause(iv)withthe
complaints' The
explanation having two iimbs to cover the cases like these
promoter means -
explanation appended to clause (iv) provides that' the
t',, - !

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i. the person who constructs or converts the building into apartment

or develops a Plot for sell and

ii. the person who sells the apartment or plots'
shall be
It provides that both of them shall be deemed to be Promoter and
jointly liable for such functions and responsibilities specified under the Act
to this
or the Rules and Regulation made thereunder' After giving thought
provision, one finds that, when a person who selis the apartments
is

differentthantheonewhoConstructsit,thenbotharejointlyliable.Inthis
case, the terms of the agreement to which I have referred
to above clearly
and
show that the Development Manager has the Authority to supervise
of
control all the activities of planning, selling, funding and constructing
Manager is
the project. In case of a shortfall of the funds, the Development

empowered to sell the aPartments at discounted price' This clearly shows

thatLucrativePropertiesPrivateLimitedcomesunderthesecondlimbof
aspect of the matter'
the explanation and it becomes a Promoter' This is one
who sells' if
Not only that, both the person who constructs and the Person
they are different persons, they are jointly liable for such functions and
made
responsibilities specified under the Act or the Rules and Regulation
advocate Mr'
thereunder. Therefore, I hold that, though the learned
agreement to
Diamondwala has invited my attention to the clause 7 of the
showthat,allthefinanciallabilitiesandresponsibilitieswillbeshouldered
by the Developer i.e., Nirmal Developers, I do not agree
with him because
and the Person
the law clearly mentions that if the person who constructs
and they
who sells are different, then both are deemed to be the PIomoteIS
name
arejointly liable. Lucrative Properties Private Limited is using brand
collecting money
and goodwill of M/s. Shapoorji Pallonji Private Limited'
narne and selling
from buyers, issuing the receipts bearing their logo and
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theunitsoftheprojects.Notonlythat,itissharingalmostl0%ofthe
revenue on priority basis as stipulated in clause no'11 of
the agreement
of the
referred to above. Therefore, I hold that it comes under the definition
promoter.
1.4. Now, the technical point here is, the agreement is executed between
theNirmalDevelopersandLucrativePropertiesPrivateLimitedwhichis
subsidiary of M/s. Shapoorji Pallonji Private Limited Hence' I
find that'
and
Lucrative Properties Private Limited is the Development Manager
henceitneedstobeaddedaSpromotel.Theinternalrelationsofthe
conditions
executants of the agreement will be governed by the terms and
namely
of the agreement and they will not be binding on the third parties
the allotees herein. If any financial loss is incurred by M/s' Lucrative
at
Properties Private Limited, it can be indemnified by Nirmal Developers
the most.
15'onbehalfofMs.GauriithasbeensubmittedthatShebookedtheflat
the website
relying on the date of completion of the project mentioned on
ofMahaRERAi.e.,30.06.20lg.Itisherallegationthattherespondents
have revised
revised tt to 37.12.2024. I have verified it, now the respondents
the
it to 30.06.2025. Therefore, I find. that the respondents while accepting
would be
booking of the flat made the false statement that the project
completed by 30.062019. Therefore,, the complainant
is entitled to get

refund of her amount with interest under section.l2 of RERA'

So far as Mr. Nilesh Maru and Mr' P'N' Kutty are
concerned' they
16.
contend that, they were made to believe that' M/s' Shapoorji
Pallonji
been admitted
Private Limited would construct the Project' This fact has
name of M/s'
by the respondents that the flats have been sold in the
Shapoorji Pallonii Private Limited and it is also
a fact that Nirmal

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 agreement to
Developers have entered into development management
which I have referred to above showing that the M/s
Shapoorii Pailonji
manager' and the
Private Limited's subsidiary would act as the project
are also issued by using the logo of M/s' Shapoorji
Pallonji Private
receipts
contend that
Limited, therefore this allegation is proved' The complainants
months from booking of
the excavation work dicl not start within the three
2019' It is
their flats and no construction work was in progress till January
booked their flats
also brought to my notice that when the complainants
on29 01'2017 '
the commencement certificate was not in force as it expired
Therefore, I find that these complaints are also covered
by section 12 of

RERA which permits them to claim refund of the amount

with interest'

lT.ItisamatterofrecordthatMr.MathewandMs.RubypaidRs.
1.5,27,845/- out of total consideration of Rs' 1''53'72'176f
-' Even after
and register the
receiving this amount, the respondents did not execute
section 13 of RERA'
agreement for sale. Thereby they have contravened
These complainants aiso allege that the respondents
failed to commence

the construction work in the month of October 2018 as promised'

RERA for claiming
Therefore, their case also comes under section 12 of
refund of their amount with interest'
these complainants are entitled to get refund
of their amounts
18. A11
is 2% above
with interest at prescribed rate' The prescribed rate of interest

SBI's highest MCLR which is currently 7% p'a' The complainants of each

the cost of their
complaint are also entitled to get Rs' ZO'OOO/- towards
complaint. Therefore, following is the order'

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 ORDER
Lirnited shall
A. Nirmal Developers and Lucrative Properties Private
interest at the
refund the amounts of the complainants with simple
rateofg%perannumfromthedatesoftheirreceipttilltheirrefund.
complaint
B. They shall pay Rs. 20,000/- to the complainants of each
towards the cost of their complaint'
C. The charge of the aforesaid amounts shall be on the respective
booked flats of the complainants till satisfaction of their
claims'
on the
D. Lucrative Properties Private Limited be added as a promoter
webpage of the project within thirty days of this order'
filed by
E. Original order is kept in complaint no' CC006000000192458
Gauri Thatte and copies are kept in other complaints'

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(B. D. Kapadnis)
Date: 05.03. 2021.
Member-II,
MahaRERA, Mumbai.

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