Bombay High Court Allows Homebuyer to Withdraw Deposit During Builder's Appeal

The Bombay High Court has ruled that a homebuyer can withdraw the amount deposited by a developer during the pendency of an appeal under the Real Estate (Regulation and Development) Act. The decision came while rejecting a builder's plea challenging an order passed by the Real Estate Appellate Tribunal.

The case relates to a delayed housing project where the homebuyer had booked two flats and paid nearly INR 2 crore out of a total consideration exceeding INR 3 crore. The project did not meet the promised possession timeline, leading the buyer to seek a refund. The Maharashtra Real Estate Regulatory Authority (MahaRERA) had earlier directed the developer to refund the amount along with applicable interest under Section 18 of RERA, which provides relief in cases of project delays.

The builder later filed an appeal before the appellate tribunal. As per Section 43(5) of RERA, developers are required to deposit a certain portion of the awarded amount before their appeal can be heard. In this case, the builder deposited the required sum. During the proceedings, the tribunal permitted the homebuyer to withdraw this amount, subject to an undertaking that the money would be returned with interest if the builder's appeal succeeds.

The builder challenged this direction before the High Court, arguing that allowing withdrawal during the appeal could create complications in recovery later and that the tribunal had exceeded its authority. The court, however, did not accept this contention.

The High Court observed that the tribunal has the discretion to allow such withdrawals based on the facts of each case. It explained that the objective of the pre-deposit requirement is not only procedural but also to ensure that homebuyers are not left waiting indefinitely even after securing favourable orders from regulatory authorities.

The court further stated that a homebuyer and a developer are not on equal footing in such disputes. It noted that buyers often invest a large portion of their savings and may face financial pressure due to delays, while developers have access to greater financial resources. Keeping the deposited amount locked during the entire appeal period would not serve the purpose of providing timely relief.