In a ruling that will send shockwaves through Maharashtra’s real estate sector, the Maharashtra Real Estate Appellate Tribunal (MREAT) has dismissed an appeal filed by M/s. S.M. Infrastructures — the promoter behind the “Hatkesh Heights” project in Mira Road, Thane — and held that a builder cannot cancel a homebuyer’s flat allotment when it was the builder’s own legal violations that created the situation in the first place.
The judgment, pronounced on 8 May 2026 by a bench of Chairperson Shri S.S. Shinde (J) and Member (A) Shrikant M. Deshpande, is a textbook case of a promoter attempting to weaponize a homebuyer’s delayed payments — payments the promoter was legally barred from even demanding in the first place.
The core finding
A promoter who collects over 90% of the sale price without executing a registered Agreement for Sale — violating both MOFA and RERA — cannot then cancel the allotment on the grounds of “non-payment.” The wrongdoer cannot profit from their own wrong.
The Homebuyer’s Story
Pramod Yagnarayan Singh booked flat No. A-2, 302 in Hatkesh Heights — a 408.40 sq. ft. carpet area apartment on the 3rd floor — in December 2014. The total sale price was ₹35,05,000. Over the next four years, Singh faithfully responded to every demand letter sent by the promoter, paying a total of ₹28,63,375 — more than 81% of the agreed price — along with service tax, bringing his total outgo to approximately ₹29 lakh.
Through all these years, the promoter sent over 20 demand letters asking for payments. What the promoter did not do — not once — was share a draft Agreement for Sale, communicate a date for its execution, or inform the buyer of applicable stamp duty and registration charges. Under both the Maharashtra Ownership Flats Act (MOFA) and the Real Estate (Regulation and Development) Act, 2016 (RERA), a promoter is legally prohibited from accepting more than 10–20% of the consideration price without first executing and registering an Agreement for Sale.
Then, on 12 February 2019, came the letter that shocked Singh: the promoter cancelled his flat, citing “outstanding dues” and inviting him to collect a refund after deducting “interest till date.”
Singh’s advocate responded swiftly on 11 March 2019, reminding the builder of its statutory obligations, enclosing cheques for the entire outstanding balance — ₹6,06,575 towards consideration and ₹1,44,789 towards GST. The promoter never replied. The cheques were never deposited.
“A wrongdoer ought not to be permitted to make a profit out of his own wrong.”
— Supreme Court, cited in the order
A Decade-Long Legal Battle
- 2014Allotment letter issued; Singh begins paying instalments against builder’s demand notices.
- 2015–18Over 20 demand letters sent by builder. No draft Agreement for Sale ever shared. Builder keeps collecting money.
- Feb 2019Builder cancels the allotment for “non-payment.” Singh sends balance cheques by letter — ignored by builder.
- Jul 2019Singh files complaint before MahaRERA. Occupation Certificate for the project is issued in May 2019.
- Nov 2019MahaRERA directs builder to execute Agreement for Sale. Builder appeals to MREAT.
- Dec 2021MREAT remands the matter back, noting the cancellation letter was never addressed.
- Jun 2022MahaRERA sets aside cancellation, again directs Agreement for Sale execution. Builder files this appeal.
- May 2026MREAT dismisses builder’s appeal; delivers sweeping relief to Singh including possession and interest.
What the Tribunal Found
The Tribunal was categorical: the promoter violated Section 4 of MOFA and Section 13 of RERA by accepting over 90% of the consideration amount without executing a registered Agreement for Sale. These are not technical violations — they are the foundational consumer protections at the heart of real estate law.
The promoter’s argument that it sent 20 letters asking Singh to come and register the agreement was dismissed. The Tribunal noted that the letters were merely demand notices for more money, with a one-liner stating the agreement was “ready for stamp duty.” No draft agreement was ever shared. No registration date was ever communicated. No stamp duty amount was ever specified. On direct query from the bench, the promoter’s advocate confirmed that no such communication existed.
The Tribunal also invoked the Supreme Court’s ruling in Dr. Amit Arya v. Kamleh Kumari (2025) to hold that Singh’s conduct — sending the balance cheques, writing formally to the builder, demanding possession — demonstrated clear readiness and willingness to perform his part of the contract. Non-payment of balance consideration within a time period does not amount to abandonment of contract; the real test is whether there was a “positive refusal” to perform. There was none from Singh.
Crucially, the Tribunal applied the principle that a party cannot take advantage of its own wrongdoing — citing the Supreme Court in Kusheshwar Prasad Singh v. State of Bihar. The promoter who was legally barred from demanding further payments without first executing the Agreement for Sale cannot then cancel the allotment on the very ground of non-payment of those illegal demands.
Going Beyond — The Tribunal Steps In
In a noteworthy exercise of its appellate powers, the Tribunal observed that the original MahaRERA order had failed to address two key prayers by Singh: direction for possession and interest for delayed possession. Rather than remanding the case yet again — forcing the parties into another round of litigation after more than a decade — the Tribunal decided to adjudicate these issues itself, invoking Order 41 Rule 33 of the Code of Civil Procedure and its own inherent powers under MREAT Regulations 2019.
The Tribunal calculated the deemed date of possession as 31 December 2017 — three years from the allotment letter, following the Supreme Court’s formula in Fortune Infrastructure v. Trevor D’Lima (2018) for cases where no possession date is specified. The occupation certificate was obtained by the promoter only in May 2019 — already over a year late. And Singh has been out of possession for over seven years since.
The Final Order: Builder Punished on Every Count
Tribunal’s directions — Appeal No. AT006000000113946 of 2022
1 Execute and register the Agreement for Sale in terms of the allotment letter (with deemed possession date of 31.12.2017) within 30 days.
2 Hand over possession of the flat within 30 days of receiving the balance consideration of ₹6,41,625 with applicable taxes — without charging any interest on delayed payment from the buyer.
3 Execute the Sale Deed within 30 days of balance payment, at the cost of the promoter.
4 Pay interest on ₹28,63,375 (amount already paid by Singh) from 1 January 2018 until the date of actual possession — under Section 18 of RERA.
5 Pay litigation costs of ₹2,00,000 to the allottee.
Why This Ruling Matters
This judgment is significant for several reasons. First, it reaffirms that the RERA Act is retroactive — protecting homebuyers even in projects that began before RERA came into force in 2016, as long as they were ongoing and lacked a completion certificate. Second, it establishes that a builder who systematically collects money without fulfilling the mandatory Agreement for Sale obligation is in no position to invoke equity or claim non-payment by the buyer. Third, the Tribunal’s willingness to adjudicate possession and interest at the appellate stage — rather than remanding — offers a model for resolving long-pending disputes without further delay.
For tens of thousands of homebuyers across Maharashtra who find themselves in similar situations — paying crores to builders who evade formal agreements and then attempt cancellations — this order sends a clear message: the law is on your side.
