GujRera interim stay on homes ready why

In a significant win for the 62 flat owners of Devkrupa Avenue, the Gujarat Real Estate Regulatory Authority (GUJRERA) has issued an interim stay order preventing Piramal Capital and Housing Finance Limited (PCHFL) from taking possession of their homes, despite the builder defaulting on a substantial loan.

The issue stems from the developer of Devkrupa Avenue, Sahajanand Buildcon Private Limited, which had borrowed approximately Rs 28 crore from Dewan Housing Finance Limited (DHFL), now merged with PCHFL. The developer, while selling flats to homeowners, concealed details about the project’s loan. After the builder failed to repay the loan, PCHFL initiated symbolic possession of the property in June last year, triggering fear among the residents that they could lose their homes.

The homebuyers, who had already paid the full amount and received sale deeds, were understandably alarmed. They turned to RERA for assistance, prompting the regulatory body to issue notices to both the builder and PCHFL. The builder did not appear for proceedings, which led RERA to examine the situation.

RERA found that while PCHFL followed the SARFAESI Act, 2002, they failed to provide complete information about the mortgage loan. The authority emphasized that transferring possession would cause severe hardship to the residents. Citing a Supreme Court ruling, RERA affirmed that the RERA Act takes precedence over the SARFAESI Act when conflicts arise. Under Section 11(4)(H) of the RERA Act, it is specified that the interests of homebuyers should be protected if a project loan is involved.

As a result, RERA issued an interim stay order, barring PCHFL from taking possession, selling, or creating third-party rights over the flats until the case is fully resolved. This decision has provided much-needed relief to the homeowners.

AM