First ruling on third-party rights and duties in transfer of mortgaged assets. In the first such ruling on third-party rights in housing projects, MahaRERA ruled that Xander Finance, a non-banking finance company (NBFC), which gave a loan to Bhagtanis of JVPD Properties Ltd against mortgaged assets of his two housing projects in Powai, will have to protect the interests of the home buyers as the third party.
The ruling came on a complaint filed by TriveshPooniwala and 20 other buyers from Bhagtani Serenity. After DiipeshBhagtani’s arrest in January,Xander Finance had secured a favourable order from the Chief Metropolitan Magistrate, Esplanade under the SARFAESI Act for taking possession of theassets mortgaged to the firm to recover its dues of Rs 13.50 crore. On January 15, the magistrate had appointed a Court Commissioner for takingpossession of the secured assets within a period of 60 days.
During the hearings, the home buyers contended that Section 15 of RERA and MahaRERA circular No. 11/2017 protects the interests of flat buyers whenthird party rights are created by the promoter and defines the third party as the new promoter also transferring the promoter’s obligations.
Xander had challenged the jurisdiction of MahaRERA to pass any restraining orders. After hearing the arguments of both parties, Kapadnis observed that Section 15 (1) of RERA mandates that the onus is on the promoter to seek consent oftwo-thirds of allottees and MahaRERA’s approval in case of a mortgage, and that Bhagtanis had not done so. Part 3 of the circular requires financialinstitution to do the same within seven days of the transfer. The new promoter acquiring assets will acquire the assets withall the legal liabilities of the promote.MahaRERA order protects the buyers who have parted with their life savings tobuy flats. The order clarifies that when the secured creditor will acquire the land in its name or transfers it to a third party , the newowner will have to protect the interest of existing home buyers and take all the liabilities of the old promoter.