In a significant ruling, the Maharashtra Real Estate Appellate Tribunal ("Tribunal") has upheld the rights of homebuyers under Section 18 of the Real Estate (Regulation and Development) Act, 2016 ("RERA"), directing the promoter of the Ekta Parksville project in Vasai to refund the entire amount paid by the complainants, including stamp duty, registration fees, MVAT, pre-EMI payments, and loan settlement costs. The appeal was filed against the Maharashtra Real Estate Regulatory Authority ("MahaRERA") order seeking a full refund due to delays in possession beyond the agreed timeline.
Brief Facts:
The complainants booked a flat in the Promoter's Project, Ekta Parksville, for ₹32,17,400/- and executed an Agreement for Sale on 2 December 2014, with possession promised by December 2016. The complainants made payments amounting to ₹11,00,298, while HDFC disbursed ₹23,80,876 as a housing loan directly to the promoter. However, possession was delayed beyond the agreed timeline, prompting the complainants to file a refund claim before MahaRERA.
MahaRERA directed the promoter to refund the paid amount with interest from 1 January 2017, but the complainants appealed the decision, seeking a full refund, including stamp duty, registration fees, MVAT, brokerage, and pre-EMIs paid to HDFC.
Tribunal's Findings:
- Absolute Right to Refund Under Section 18: The Tribunal held that homebuyers have an unconditional right to withdraw if possession is delayed. The promoter's justifications, including regulatory delays and the pandemic, were rejected.
- Interest from Payment Dates: Interest at 2% above SBI's highest Marginal Cost of Funds based Lending Rate ("MCLR") was awarded from the respective payment dates until full realization, modifying MahaRERA's previous order.
- Refund of Additional Payments: The Tribunal directed a refund of stamp duty, registration fees, MVAT, brokerage, and pre-EMIs paid to HDFC, rejecting the argument that statutory charges paid to third parties are non-refundable.
- Penalty for Non-Compliance: The promoter must refund the amount within 41 days or face additional interest from 1 April 2025. The complainants were also awarded ₹15,000 as costs.
MHCO Comment:
This ruling strengthens homebuyer protections under RERA, reinforcing their absolute right to a refund with compensatory interest. The Tribunal's decision to expand the scope of refundable amounts underscores that delays will not go unpunished. This judgment is a strong deterrent against developers failing to meet contractual commitments. However, the judgment has come out after 8 years under appeal. Justice delayed is justice denied. Accordingly, it is important for the tribunals implement these orders and use this caselaw in a time bound manner.
This article was released on 21 February 2025.
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