MahaREAT Orders Builder to Refund Full Amount with Interest from Payment Date
The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has overruled a decision by the Maharashtra Real Estate Regulatory Authority (MahaRERA) and ordered Darode Jog Homes Pvt. Ltd. to refund the full amount paid by a homebuyer, including interest from
MahareatMahareraReal EstateHomebuyerRefundReal Estate MaharashtraOct 13, 2024
of the Case
Homebuyer Ms. Ashwini Subhash Kulkarni booked a flat with open car parking space in the builder's project, Padmanabh, located in Haveli, Pune. The project was launched in 2016. On July 2, 2016, Ms. Kulkarni and Darode Jog Homes Pvt. Ltd. entered into a sale agreement. The homebuyer paid a total of ₹17,75,743 to the builder in installments as part consideration. According to the agreement, the builder was supposed to hand over possession of the flat by December 2018 or within 2.5 years from the date of the agreement, whichever was later.
However, the builder failed to meet this commitment. Due to the delay in delivering possession, Ms. Kulkarni decided to exit the project and filed a complaint with MahaRERA, seeking a refund of the entire amount paid along with interest at a rate of 12% per annum from the date of payment until the realization of the amount.
On September 2, 2021, MahaRERA directed the builder to refund the entire amount paid by the homebuyer from the date of possession (January 31, 2019), rather than from the date of payment. Dissatisfied with this decision, Ms. Kulkarni filed an appeal with the MahaREAT, seeking appropriate interest from the date of payment.
MahaREAT's Observations and Directions
The MahaREAT held that the builder is not entitled to seek relief of the 6-month grace period stipulated in the sale agreement, as the builder failed to hand over possession of the flat within this grace period. The Tribunal also placed reliance on Supreme Court precedents in the cases of M/s. Imperia Structures Ltd. vs. Anil Patni & Ors. [Civil Appeal No. 3581-3590 of 2020] and M/s. Newtech Promoter and Developers Pvt. Ltd. vs. State of Uttar Pradesh [2021 SCC Online 1044], rejecting the builder's contentions that the delay was due to force majeure events.
In both the Imperia Structures and Newtech Promoter cases, the Supreme Court held that homebuyers have an unqualified right to seek a refund and interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA), and this right is not dependent on unforeseeable events.
The MahaREAT further held that MahaRERA's decision to award interest from January 31, 2019 (the possession date) instead of from the dates of payment is contrary to the provisions of RERA, 2016, and established legal principles. Therefore, the Tribunal directed that the builder is liable to pay interest on the amount paid by the homebuyer from the dates the payments were made, not from the date of possession.
Case Details
- Appellant Ms. Ashwini Subhash Kulkarni
- Respondent Darode Jog Homes Pvt. Ltd.
- Citation Appeal No. AT005000000053653/2022 in Complaint No. CC005000000033545
- Date of Order September 9, 2024
This ruling underscores the importance of adhering to the provisions of RERA and reinforces the rights of homebuyers in cases of non-compliance by builders.
Frequently Asked Questions
What is the Maharashtra Real Estate Appellate Tribunal (MahaREAT)?
MahaREAT is the appellate tribunal in Maharashtra that hears appeals against the decisions of the Maharashtra Real Estate Regulatory Authority (MahaRERA). It consists of judicial and technical members who review and decide on disputes in the real estate sector.
What was the main issue in the case of Ms. Ashwini Subhash Kulkarni vs. Darode Jog Homes Pvt. Ltd.?
The main issue was the builder's failure to hand over possession of the flat by the agreed-upon date. The homebuyer sought a refund of the entire amount paid, along with interest from the date of payment.
When was the MahaRERA's decision in this case?
MahaRERA issued its decision on September 2, 2021, directing the builder to refund the amount from the date of possession, not from the date of payment.
What did the MahaREAT decide in this case?
MahaREAT overruled MahaRERA's decision and directed the builder to pay interest on the refund amount from the date of payment, aligning with the provisions of RERA, 2016.
What is the significance of this ruling for homebuyers?
This ruling reinforces the rights of homebuyers under RERA, 2016, ensuring that they can seek refunds and interest from the date of payment if builders fail to deliver possession as agreed.
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