In a case involving Macrotech Developers, the Bombay High Court holds that MahaRERA cannot unilaterally order the cancellation of a registered sale agreement; developer must seek proper execution of original relief.
In a carefully reasoned judgment that touches upon the powers of real estate regulators, the Bombay High Court has disposed of a writ petition filed by Macrotech Developers Ltd., directing the prominent real estate promoter to approach the Maharashtra Real Estate Regulatory Authority (MahaRERA) afresh for the proper execution of its original order. The ruling clarifies the procedural boundaries within which regulatory authorities must operate, especially concerning the cancellation of registered instruments.
The case stemmed from a dispute over Flat No. 404 in the “Lodha Bellmondo” project, located near the Mumbai-Pune Expressway. The allottees (Respondent Nos. 4 and 5) had entered into an Agreement for Sale with Macrotech Developers on May 9, 2018, which was duly registered. Following persistent defaults in payment by the allottees, the developer issued a termination notice in May 2021 and subsequently approached MahaRERA under Section 31 of the Real Estate (Regulation and Development) Act, 2016 (RERA).
In its complaint, Macrotech sought two key reliefs: first, a direction to the allottees to execute and register a Deed of Cancellation; and alternatively, the appointment of a fit person (including a MahaRERA officer) to execute such a deed, with a further direction to the Sub-Registrar to register it. On August 14, 2024, MahaRERA allowed the complaint and granted these reliefs.
However, when the allottees failed to comply, the developer filed an execution application. In a surprising turn, the executing court of MahaRERA, in its order dated November 28, 2024, deviated from the original relief. Instead of appointing a fit person, it directed the Joint Sub-Registrar (Respondent No. 1) to unilaterally cancel the registered sale agreement in the official records.
The Sub-Registrar refused to comply, contending in a letter dated February 13, 2025 that MahaRERA lacked the statutory power to order the unilateral cancellation of a registered instrument. This impasse led Macrotech to invoke the extraordinary writ jurisdiction of the High Court under Article 226 of the Constitution, seeking enforcement of the MahaRERA execution order.
Key Arguments and Court’s Analysis:
During the proceedings, Advocate General Dr. Birendra Saraf, assisting the Bombay High Court, meticulously outlined the relevant legal framework. He emphasized Section 40(2) of RERA and Rule 4 of the MahaRERA Rules, which state that orders of the Authority are to be enforced as if they were decrees of a civil court. He also pointed to Order XXI, Rule 34 of the Civil Procedure Code, which governs decrees for the execution of documents, and Section 31 of the Specific Relief Act, 1963, which deals with the cancellation of instruments.
The Advocate General argued that the power under Section 31(2) of the Specific Relief Act—to send a decree of cancellation to the registration officer—is vested in a civil court, not a regulatory authority, unless the instrument is void or voidable. In this case, the sale agreement was neither alleged nor adjudged to be void; it was being terminated due to breach. Therefore, MahaRERA’s execution order had overstepped by granting a relief not sought in the original complaint.
Mr. Amogh Singh, counsel for Macrotech, relied on the Supreme Court’s decision in Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties & Ors. (2021), where an arbitral tribunal was held to have powers akin to a civil court under the Specific Relief Act. He contended that MahaRERA, as a quasi-judicial body, possessed similar authority.
The Bench, comprising Justices R.I. Chagla and Farhan P. Dubash, distinguished the cited precedent. They noted that in Deccan Paper Mills, the instrument in question was challenged as voidable—a factual scenario absent here. The Court held that MahaRERA’s execution order had “lost sight of the alternative relief” expressly granted in its original order and had erroneously created a new remedy.
The Court’s Ruling and Broader Implications:
The Bombay High Court underscored that while the petitioner had not challenged the execution order, the Court was not powerless under Article 226. It possesses the discretion to mould reliefs to prevent injustice. Without deciding the broader question of whether MahaRERA can ever direct unilateral cancellation—an issue left open—the Court focused on the specific procedural error.
In its operative order, the Court:
- Granted liberty to Macrotech Developers to file a fresh execution application before MahaRERA, seeking implementation of the original order dated August 14, 2024.
- Directed MahaRERA to hear and decide this application expeditiously, within eight weeks, without being influenced by its own erroneous execution order of November 28, 2024.
- Disposed of the writ petition with no order as to costs.
Conclusion:
This judgment serves as a significant procedural corrective in real estate dispute resolution. It reaffirms that regulatory authorities must execute their orders within the confines of the relief originally granted and the specific powers conferred by statute. For developers and allottees alike, the ruling emphasizes the importance of precise pleadings and the hierarchical structure of remedies under RERA. By refraining from a sweeping declaration on MahaRERA’s powers, the Court has allowed for future deliberation while ensuring that, in this instance, justice is served through due process. The outcome balances the promoter’s legitimate need for contractual enforcement with the fundamental principle that registered instruments cannot be cancelled unilaterally without explicit statutory authorization or a court decree.
Advocate for Petitioner- Mr. Amogh Singh with Mr. Rahul Arora i/b. Mr. Jeet Gandhi
Advocate for Respondent No.1 & 2- Dr. Birendra Saraf, Advocate General with Mr. Aseem Naphade, ‘B’ Panel Counsel and Ms. Sheetal Malvankar, AGP
Advocate for Respondent No.3- Mr. A.K. Saxena
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