In a significant ruling that strengthens the rights of homebuyers under the Real Estate (Regulation and Development) Act, 2016 (RERA), the Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed a Pune-based builder to refund ₹20 lakh along with interest to an investor who later became a flat purchaser in a delayed project.
Member II, Shri Ravindra Deshpande, passed the final order on January 12, 2026, in Complaint No. CC006000000302965 filed by Akshay Pandurang Manve against M/s. The Constructions Co. (a sole proprietorship), concerning the project “The Scenic Residency Phase-1” (MahaRERA Registration No. P99000005001).
How the Case Began: From “Friendly Loan” to Registered Flat Agreement
The dispute originated in January 2016 when the complainant, through family connections, invested ₹20,00,000 in three separate cheques dated January 26, 2017, with the respondent builder. At that stage, the transaction was described as a “friendly loan” or investment carrying 2% monthly interest, with an oral understanding that the amount would either be repaid after project completion or adjusted towards the purchase of flats (one 1BHK and one RK flat).
The builder honoured part of the initial arrangement by paying ₹3,71,300 in interest through nine separate cheques between March 2017 and August 2018.
Subsequently, on April 23, 2019, the parties executed a registered Agreement for Sale for Flat No. 004, Ground Floor, B Wing in the project, for the exact consideration of ₹20,00,000. Clause 4 of the agreement clearly stipulated that possession would be handed over on or before March 2020.
The project itself had been registered with MahaRERA on August 9, 2017.
Builder Fails to Deliver Possession
Despite the clear timeline, the builder failed to hand over possession by March 2020. No Occupation Certificate has been obtained to date, and construction progress remains reportedly below 50% (though the builder claimed ~75% in submissions).
When the complainant demanded a refund citing inordinate delay, the builder resisted, arguing that the entire transaction was merely a financial/business investment/loan and not a promoter-allottee relationship under RERA. The builder further justified the delay on account of the COVID-19 pandemic and statutory extensions granted by MahaRERA.
MahaRERA’s Landmark Reasoning
After hearing both sides on December 26, 2024, MahaRERA rejected the builder’s maintainability objection and held that:
- Existence of Promoter-Allottee Relationship The execution of a registered Agreement for Sale on April 23, 2019, in which the builder described himself as “Promoter” and allotted a specific flat to the complainant for a lump-sum consideration, unequivocally created the statutory relationship of promoter and allottee under Section 2(d) of the RERA Act.
- Nomenclature is not decisive Relying on precedents from the Maharashtra Real Estate Appellate Tribunal (in Srushti Sangam Developers Pvt. Ltd. vs. Sarvapriya Leasing) and earlier MahaRERA orders (e.g., Nitish Kumar Patel & Anr. vs. Garnet Construction Pvt. Ltd.), the Authority ruled that labels such as “investor” or “loan” do not override the true nature of the transaction. When the agreement transfers ownership rights in a specific unit, it is a sale – not a mere security or loan arrangement.
- Prior interest payments irrelevant after registration The interest paid before the Agreement for Sale (₹3,71,300) cannot nullify the legal effect of the subsequent registered document.
- Absolute & Unconditional Right under Section 18 Citing the Supreme Court’s authoritative judgment in Newtech Promoters and Developers Pvt. Ltd. vs. State of U.P. (2021), MahaRERA held that an allottee’s right to withdraw from the project and claim refund with interest is unconditional and absolute when possession is not handed over by the agreed date – irrespective of force majeure events, COVID-19, or general statutory extensions granted for project registration validity.
MahaRERA also noted that the builder had not demonstrated compliance with MahaRERA Orders No. 40/2022 and No. 7/2019, which require either consent of the majority of allottees or detailed justification for further extensions beyond initial COVID-related grace periods.
Final Relief Granted
The Authority allowed the complaint in full and passed the following directions:
- The complainant is entitled to withdraw from the project.
- The builder must refund the entire ₹20,00,000 along with interest at SBI Highest MCLR + 2% per annum from April 1, 2020 (the day after the agreed possession date) till the date of actual realization.
- The ₹3,71,300 already paid as interest shall be adjusted against the total interest liability under this order.
This order reinforces that once a registered Agreement for Sale is executed for a specific apartment in a RERA-registered project, the protections of the Act – including the powerful refund remedy under Section 18 – become available, even when the transaction originated from an investment or loan arrangement.
Legal experts view this as an important clarification for cases where informal investments are later formalized through registered agreements, ensuring that homebuyers/investors are not left without RERA remedies.
Also Read: MahaRERA Orders Refund Paid for Seven Flats in Godrej RKS Project
