Case at a glance: The Bombay High Court has held that the right of an allottee under Section 18(1) of the RERA to a refund with interest, on withdrawing from a delayed project, is absolute and unqualified. Dismissing a promoter's second appeal, it upheld the Maharashtra Real Estate Appellate Tribunal's removal of a MahaRERA direction that allowed the promoter to defer the refund until it obtained the Occupation Certificate.
Two buyers booked Flat 702 in Building C-1 of the “Waterways” project at Nashik for Rs 43.13 lakh and paid Rs 22.58 lakh. The Agreement for Sale of 16 May 2016 promised possession by 31 December 2017, but the project was delayed. In 2019 the buyers approached MahaRERA to withdraw and seek a refund.
In August 2021 MahaRERA ordered a refund but let the promoter defer payment until it obtained the Occupation Certificate. The Appellate Tribunal, by order of 7 November 2023, removed that deferment. The promoter then filed a second appeal in the Bombay High Court.
The Key Question Before the Court
Can a promoter, or the regulator, postpone a Section 18(1) RERA refund with interest, for a buyer who withdraws from a delayed project, until the Occupation Certificate is obtained?
Why the Refund Right Is Absolute
As reported, the High Court held that Section 18(1) mandates a refund on demand by an allottee who chooses to withdraw, and that the right to return of the amount with interest is “absolute and unqualified”. The authority has no discretion to relax or defer it because of the promoter's cash-flow problems, genuine completion efforts, or the stage of the project.
The Court distinguished refund from compensation: only claims for compensation may involve weighing the promoter's efforts, whereas a refund under Section 18(1) is a mandatory entitlement. The appeal was dismissed and the refund of Rs 22.58 lakh with interest, reported as running from 1 January 2018, was upheld.
What the Court Actually Held
- The allottee's right to refund with interest under Section 18(1) RERA is absolute and unqualified.
- The regulator and tribunals cannot defer a refund until the promoter obtains the Occupation Certificate.
- The promoter's financial difficulty or completion efforts are not grounds to postpone a refund.
- Refund is distinct from compensation; only compensation may involve weighing the promoter's efforts.
- The Appellate Tribunal's order was upheld and the promoter's second appeal dismissed.
Why This Judgment Matters
- It closes off a common request by promoters: that refunds be paid only after the OC or completion.
- It strengthens homebuyers' hand in withdrawing from stalled projects with a prompt monetary remedy.
- It keeps the refund and compensation tracks conceptually separate, which matters for choice of forum and relief.
- It is a High Court decision in a second appeal from the Appellate Tribunal, so it is binding within Maharashtra and persuasive elsewhere.
What Should Advocates Take Away From the Judgment?
For Counsel Representing Homebuyers
- Cite Section 18(1) as an absolute right when opposing any deferment of refund until OC or completion.
- Plead refund and compensation separately, and confirm the date from which interest is claimed.
For Counsel Representing Promoters
- A cash-flow or completion-progress argument will not defer a Section 18(1) refund; such factors, if at all, belong to compensation proceedings.
- Note that a second appeal under the RERA requires a substantial question of law.
Key Takeaways
- Section 18(1) RERA gives a withdrawing allottee an absolute right to refund with interest.
- A refund cannot be deferred until the promoter obtains the Occupation Certificate.
- The promoter's financial distress or completion efforts are no defence to refund.
- The Bombay High Court dismissed the promoter's second appeal and upheld the Appellate Tribunal.
Frequently Asked Questions
According to this ruling, no. The Section 18(1) refund right is absolute and cannot be deferred for the promoter's convenience.
Not to a refund claim. The Court held such factors may be weighed only in compensation claims.
It is reported as running from 1 January 2018 on the amount paid, but the exact start date should be verified in the order.
Conclusion
The decision restates a clean principle: a buyer who exits a delayed project is entitled to the money back with interest now, not whenever the promoter can obtain an occupation certificate.
Practical takeaway: Treat refund as a mandatory remedy and compensation as a discretionary one, and resist any attempt to blend the two when a promoter asks for time.