Penalty on Godrej Properties

Invoking Section 59 of the RERA Act, 2016 by imposing penalty on unregistered project namely “Godrej Nirvaan” for the contravention of Section 3 of the RERA Act, 2016, an order dated 27^th August, 2019, was passed by the MAHARERA Authority to direct the developers of the project to pay a token penalty of Rs. 30 Lakhs for the error occurred.

Some general points highlighted in the order:
1. A complainant named Aditya Bothra filed a complaint to the MAHARERA Authority by bringing into the notice that the Godrej Properties has been advertising/ offering for sale, as a pre-launch promotion, apartments in an unregistered project with MAHARERA.

2. Defending the same in front of the MAHARERA Chairman, Mr. Gautam Chaterjee, the authorised representative of the developer clarified that although they have put 30 billboards at multiple locations spread across Mumbai and Pune of their various real estate projects but this cannot be treated as advertisement under Section 3 of the RERA Act, 2016 as they have put disclaimer in the billboards clarifying that the above is not an advertisement or offer for sale of any project and the developer shall sell the flats only after registering the project with MAHARERA.

3. He argued that it is prima-facie contravention of the provision of the law for which an error has occurred in an unintentional manner and they have not attracted any customers through that advertisement.

4. Justifying on the above statement, the potential customer, Aditya Bothra clarified that due to billboard advertisement he followed up with subsequent phone calls to enquire more about the project and he has been allegedly told to deposit certain amounts for blocking his booking.

5. Hearing the grounds of both the parties, the authority cleared that such billboard announcements can not only mislead the customers at large but also has the potential of creating a situation of a lack of level playing field among promoters who are advertising their projects only after registering them.

6. Finally concluding and accepting unconditional apology from the developer of assuring to not to solicit, misguide or engage in such pre-launch announcements in the near future, the authority declared this error as an inadvertent error which can be forgiven by levying penalty of Rs. 30 Lakhs under Section 59 of the RERA Act, 2016 (30 billboards* 1lakh fine for each).

7. As far as the registration of the project is concerned it shall be approved by the authority only after the realization of payments which have been imposed as a token penalty by MAHARERA.

Note: If any promoter does not comply with the orders or directions issued by the authority, then as per Section 59(2) of the RERA Act, 2016, he shall be punishable with an imprisonment of maximum 3 years or with fine extending to further 10% of the estimated cost of the real estate project, or with both.

Therefore, the promoters should follow a pro-active approach to handle their projects smoothly in order to avoid any civil and criminal proceedings against them.

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Tags: promoters , MAHARERA, unregistered, complaint , advertising.