Turf View Case Explained: How MahaREAT Set Back Commercial Redevelopment Plans

• MREAT restored Turf View’s residential status, overturning MahaRERA’s approval for the project’s promoter change and commercial redevelopment.

• Promoters were penalised 2% of the project cost after the tribunal found that they misrepresented facts and relied on invalid or limited buyer consents.

• Homebuyers’ rights were upheld, with the tribunal noting that buyers had paid over 50% but were neither given registered sale agreements nor possession of their flats.

The Maharashtra Real Estate Appellate Tribunal (MREAT) on Friday dealt a setback to the proposed commercial redevelopment of the Turf View project in Mumbai’s Mahalaxmi, directing that the project be restored to its original residential character and reviving the claims of homebuyers who had booked flats nearly two decades ago.

The August 25 judgment also overturned the project’s deregistration from MahaRERA, ruling that the promoters had misled the regulatory authority (MahaRERA) using invalid or contested consent from homebuyers, and ordered the project to revert entirely to its residential character. 

The ruling has raised questions over developers’ ability to alter the nature of stalled projects after buyers have acquired contractual rights.

What really happened? 

In a judgment delivered on August 25, Justices S.S. Shinde and Shrikant M. Deshpande held that MahaRERA’s approval for changing the promoter and modifying the project, formerly known as Orchid Turf View, was “bad in law”, saying the authority had granted the approval without adequately examining and verifying the facts.

The dispute stems from 2007, when the petitioners—Aditya Bagree, Chand Bagree, Kesari Realty and Kuber Mall Management—booked flats in the proposed residential project at Mahalaxmi and paid around 50% of the agreed consideration. 

However, they alleged that the sale agreements were never executed, the project was not completed and possession of the flats was never handed over.

The petitioners further alleged that the original promoters, an associate of DB Realty, had sought to terminate their allotments and transfer the development rights to Turf Estate Joint Venture LLP, a Prestige Group subsidiary, without obtaining their consent.

They also challenged the promoters’ move to change the project from a purely residential development to a residential-cum-commercial one.

The appellants also challenged the promoters’ assertion that two-thirds of the project’s allottees had given their consent to the proposed changes, as required under the applicable MahaRERA provisions.

MahaREAT observed that, before seeking approval for the change in promoter, the promoters had already cancelled the allotments of some buyers and refunded their payments. 

Tribunal Ruling

The Tribunal levied a penalty equivalent to 2% of the project cost on the promoters of Turf Estate Joint Venture LLP after finding that they had misrepresented facts before the regulator to secure approval for the proposed modifications.

The project was originally registered under the name “DB Turf View” in accordance with Section 5 of the RERA Act and had 27 allottees. The promoters subsequently invoked Section 15 to seek a change in the project’s promoter, along with permission to convert the land use from residential to commercial. 

They claimed that they had obtained the consent of two-thirds of the allottees, as mandated under the law, with five allottees opposing the changes. MahaRERA approved the change in promoter and permitted the project to be deregistered in 2022, although the RERA Act does not expressly provide for deregistration of a project. The company claimed that they have taken permission to change from the allottees.

The Turf View project was initially registered with MahaRERA as a residential development, with Turf Estate JV (AOP) serving as the original promoter. Although bookings began in 2007, the project is still incomplete, and the appellants are yet to receive possession of their flats.

The Violations 

MREAT found that the promoters had undertaken commercial construction without obtaining the necessary approvals or securing consent under RERA. The tribunal clarified that the consents cited by the promoters were limited to converting the project from residential to residential-cum-commercial and did not authorise the development of a wholly commercial project. 

The tribunal further held that the promoters had failed to execute and register agreements for sale even after the appellants had paid more than 50% of the purchase consideration. It said this amounted to violations of the relevant provisions of the Maharashtra Ownership of Flats Act (MOFA) and RERA.