MUMBAI: When a complainant dragged a builder to the Maharashtra Real Estate Regulatory Authority (MahaRera), neither knew that it would land them in hot water.
As the case proceeded, evidence stumbled out that the complainant, Richbond Finvest Services, had paid Rs 1.3 crore in cash to the builder, M/s Niraj Kakad Constructions, as loan at 24% interest.
In an order issued early this month, MahaRera member Vijay Satbir Singh directed that the Income Tax department must be asked to investigate the source of funding and evasion of taxes, if any.
Real estate experts say this is a unique case and the first of its kind where cash paid to a builder has been found by the authority. The complaint was also dismissed because it was found that the complainant is an investor and not a flat purchaser. Officials in the state Rera said the regulatory authority can entertain complaints only from genuine flat buyers.
Richbond Finvest Services invested in a residential project, Devi Kakad Solitaire, in Chembur. It booked two flats and paid Rs 75 lakh for each. The builder agreed to pay him 24% annual interest for his investment and offered him these flats in case he failed to repay the loan by March 31, 2016.
When the builder did not fulfil his commitment, the investor wanted the money back along with interest and compensation or registration of the agreement of sale of flats.
The builder, in his reply before the authority, disputed the claim and said the complainant had paid Rs 10 lakh only for each flat and the remaining amount had not been paid.
Richbond Finvest then produced receipts of entire amount of Rs 75 lakh for each flat duly signed by the builder. However, this revealed that a large amount, Rs 65 lakh for each flat, was paid in cash and the remaining amount was given through cheques.
“The facts of this case made it clear that the complainant had given Rs 1.5 crore to the builder as investment in his project…both parties chose not to register the agreement for sale..,’’ said the order.
“Documents on record show that the status of the complainant in the project is that of an investor and not a genuine home buyer. The flats were offered for purpose of security by the builder in event of non-payment of loan…the complainant is therefore not entitled to any relief under provisions of RERA,’’ it added.
Advocate K K Ramani said the IT department can reopen the case and treat the amount as income from undisclosed sources. “They can prosecute the person for tax evasion and levy a concealment penalty,’’ he said.
Real estate expert Pankaj Kapoor said this is a “strange case where the authority unearthed illegitimate money”. “They went for resolution, but got caught in a web,” he said.
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