Bombay HC Issues Contempt Notices to Collector Over Chembur Housing Project Refund
The Bombay High Court has issued show-cause contempt notices to the Mumbai suburban district collector and a local tehsildar for failing to execute a MahaRERA refund order regarding a delayed housing project on Sion-Trombay Road in Chembur. A division bench of Justices AS Gadkari and Kamal Khata issued the notices on July 10 after the officials failed to provide details of a developer's assets to secure a Rs 1.5 crore refund for homebuyer Sneha Tejwani.
The court also appointed a court receiver to take physical possession of a flat in Khar by July 13 to secure the refund amount. The flat belongs to builder Niraj Kakad Construction.
The case stems from 2016, when Tejwani booked a 550-square-foot flat for Rs 1.65 crore in a project by Niraj Kakad Construction on Sion-Trombay Road in Chembur. Tejwani paid Rs 1.5 crore, with possession scheduled for August 2017. Work on the project stopped, prompting Tejwani to invoke her rights under the Real Estate (Regulation and Development) Act (RERA) in 2019 to withdraw and seek a refund.
In 2020, MahaRERA directed the builder to refund Tejwani's money with 10.4 percent interest. The builder challenged the order up to the Bombay High Court in 2022 but lost. However, the recovery process remained pending with the suburban collector's office, leading Tejwani to petition the High Court in 2024.
The High Court had previously directed the builder to disclose his assets. On July 8, the court observed that the builder had not disclosed all entities in which he held financial stakes. The court then ordered the collector to personally verify and inform the court by July 10 about the builder's legal entities.
On July 10, after the government pleader requested more time, a tehsildar filed a reply. The High Court stated that the reply lacked the requested details and undermined the court's authority, leading to the issuance of the contempt notices.
To secure the refund, the buyer's counsel, Neeta Jain and Mahesh Kukreja, requested the attachment of a flat in Khar West belonging to the builder. Despite objections from the builder's counsel, Karl Shroff, the High Court directed the court receiver to take physical possession of the Khar flat.
The court has scheduled the next hearing for July 17 following a request from government pleader Anjali Helekar. The bench previously noted in February that developers were exploiting legal loopholes to avoid MahaRERA refund orders, prompting discussions with State Advocate General Milind Sathe about systemic reforms, including a proposed 25 percent project cost security deposit at registration.
