A PAAA provides legal sanctity to the old flat owners that a newly built flat has been allotted in their name in the redeveloped building.

2) it is only after the PAAA has been signed that homeowners should vacate their old building to commence redevelopment.

3) inform the builder that you are not liable to pay interest as bank was refusing to sanction loan in absence of PAA 

4) one of conditions of IOD is that builder should enter into Tripartite agreement with society and individual flat owner to provide permanent alternative accommodation . it should be registered before flat owners are required to vacate their flats and hand over possession to builder for redevelopment

4) however Bombay high court has set aside this condition  that builder should execute PAA with existing flat owners before issue of commencement certificate as regulation 33(5) of development control Regulations do not impose any such condition 

First of all Rera will not apply to your case as you are being allotted a rehab flat (even if it be from the sale component) in lieu of your old flat and despite you opting to buy extra space against monetary consideration

So you would not be an allottee as is understood under Rera 

As the builder has refused to allot the flat to you and has demanded interest for alleged delayed payment, you will have to file a suit against him 

In that suit you will have to seek the relief of allotment of the flat and for a declaration that the demand letter is not binding on you and you are not liable to pay any interest 

You will also have to seek the relief of registering the PAAA with you 

I feel that the Court will mostly grant you the relief of allotment of the flat and the question of your liability to pay any interest will be decided by the court 

As you have the bank sanction letter, you would be in a position to pay the consideration for extra space , however without any interest, which would be decided by the court at the time of trial in the suit. If you get the relief of registering of paaa and allotment of flat, then you can deposit the registered paaa with the bank so that it can release the payment to the builder,  minus the interest 

This is my prima facie view 

1. It is default of builder if he fell short of 12 flats. He is liable for shortage of flats. He cannot take advantage of his won wrong.
2. Number of flats is determined well in advance in development plan. There is no scope of any shortfall against number of members.
3. Any shortfall should reflect in development agreement.
4. Notwithstanding absence of any paaa, builder is liable for making alternate arrangement for you.
5. In the absence executed  paaa agreement, the  promisee can not be imposed any penalty as interest on delay in payment.
6. Even if there is such clause, it is invalid being unfair contract in terms of Section 2 (46) of Consumer Protection Act, 2019.
7. File a consumer in District Consumer Commission giving all details and seek appropriate direction to builder.

Even if the project is registered with Rera, the registration does not extend to the rehab component 

The process of society redevelopment involves obtaining consent from a minimum percentage of society members, appointing a developer, preparing a redevelopment agreement, obtaining approvals, demolishing existing structures, and constructing new ones, followed by the handover of redeveloped units to society members

t has been often noticed that during the process of redevelopment, the terms of Development Agreements as agreed upon, are later twisted and grossly violated by the Developers and the ground rules of MRTP and DCR by unlawful planning are flouted by constructing additional/unauthorized areas that are beyond the entitlement (i.e. beyond the plot FSI and the TDR/FSI loaded) for their hidden financial gains.

 RERA provides legal protection to buyers and ensures that developers fulfill their commitments. Timely Delivery: Buyers can expect better adherence to project timelines, minimizing inconveniences. Quality Assurance: Redevelopment projects are held to the same quality standards as new constructions

A permanent alternate accommodation agreement (PAAA), which protects the rights and claims of the home-owner, should also be signed before vacating the flat and commencing redevelopment. .However, it appears that this has not happened in your Society. 

However in the absence of signing the PAAA the demand made by the developer towards the interest over the dues in this regard can be an unjustified claim and not maintainable because the builder is taking the advantage over the flat owners on such fictitious reason.

You can proceed legally against the  developer 

You can drag him to consumer grievances rederessal commission for deficiency in service and also for unfair trade practice adopted by the developer.

 RERA provides a dispute resolution mechanism for timely conflict resolution.

The inclusion of redevelopment projects under RERA is a significant step in ensuring the real estate sector’s integrity and reliability. It not only offers legal protection to buyers but also promotes transparency, accountability, and quality assurance.

Check the building plans sanctioned by BMC 

Kindly make complaint in the Consumer Forum and in RERA site online. mention all above details from day one entering into contract till date.

Dear Client,

Since the builder did not enter into a PAAA before you vacated the flat, he is in violation of RERA Section 13(1) which states that a promoter cannot accept more than 10% of the cost of the apartment as an advance payment without first entering into a written agreement for sale (PAAA) and registering the same. You can file a complaint with the RERA authority for this violation. A demand letter without a formal agreement does not create a legally enforceable obligation to pay interest. Interest can only be charged if there is a contractual provision for it. The builder cannot charge interest in the absence of a formal agreement. You can file a complaint with RERA, highlighting that no formal agreement (PAAA) was signed, and hence, the demand for interest is invalid. It is the builder’s obligation to provide flats to all members. It is advisable to draft a detailed complaint including all relevant information and submit it to the RERA authority. Consult a property lawyer to help you draft a RERA complaint and represent you if necessary. Should you require any further clarification, please do not hesitate to contact us.

- Since there is no PAAA agreement by the builder and did not allot any alternate space , then the builder cannot demand amount for the same. 

- Further, the builder itself is responsible for the shortfall , and which cannot be recovered by the tenants. 

- You can file a complaint against the builder before consumer forum.