Developer Cannot Add Unilateral Clause of Cancellation in Agreement
Order dated of MahaRERA, Mumbai in Complaint No.CC12400436 of Hemant Ashok Gade Vs. Nirmiti Vastu Creation LLP
The complainant has sought directions to restrain the respondents from acting upon the revoked Power of Attorney declaring Clause 7(G) of the Agreement dated 25.8.2021 as illegal and unenforceable and other reliefs.
According to the complainant, clause (G), without complainant’s informed consent, was incorporated in the agreement to authorize named employee of the respondent, to execute cancellation deed on behalf of the complainant. The said clause is contrary to Rule of the Maharashtra RERA Rules and Order No.38/2022 dated 31.12.2022. It was incorporated without free and informed consent and therefore, it is unfair contractual terms as also unfair trade practice.
Rule 10 of the Maharashtra Real Estate (Regulation and Development) Rules, 2017 mandates that every Agreement for Sale shall substantially conform to the Model Agreement prescribed under Annexure-A. Any contractual stipulation inconsistent with the provisions of the Act, Rules or Regulations cannot override the statutory rights conferred upon an allottee.
- MahaRERA Order No. 38/2022 has prescribed the procedure governing termination of Agreements for Sale and recognises that cancellation must follow the statutory process after issuance of appropriate notice and compliance with the prescribed safeguards. A contractual clause enabling unilateral execution of a cancellation deed through a power of attorney in favour of an employee of the promoter bypasses the statutory procedure and is inconsistent with the scheme of the Act. Such a clause cannot be enforced to defeat the rights available to an allottee under RERA.
