MahaRERA Orders Refund After Finding Illegal Loan Disbursement, No Agreement for Sale, and Over 10 Years of Delay
A homebuyer, Amit Shah, has successfully approached the Maharashtra Real Estate Regulatory Authority (MahaRERA) against real estate developer Sylvanus Properties Limited over serious violations relating to delayed possession, illegal collection of money, and non-execution of an agreement for sale in the “Indiabulls Savroli-2” project at Savroli village in Raigad district.
In a detailed order passed on December 16, 2025, MahaRERA Member II Ravindra Deshpande allowed the complaint and held that the homebuyer was entitled to withdraw from the project and seek refund under Section 18 of the Real Estate (Regulation and Development) Act, 2016.
Background of the Dispute
The complainant booked a 3 BHK flat (Flat No. G-4/A301) in Phase-2 of the project in May 2013 for a total consideration of ₹84.98 lakh. At the time of booking, the project did not have amended construction permissions.
The buyer paid ₹13.14 lakh directly to the developer and availed a housing loan of ₹70.08 lakh from Indiabulls Housing Finance Ltd under a subvention scheme, where the builder was to bear the pre-EMI interest until possession.
A tripartite agreement was executed on July 30, 2013 between the buyer, the developer, and the lender.
Allegations by the Homebuyer
The complainant alleged that despite the payment plan being linked to construction progress, the lender disbursed the entire loan amount in a lump sum in August 2013 without his consent and at a time when no construction had commenced and requisite approvals were absent.
He further contended that:
- No registered Agreement for Sale was executed even after collecting over 90% of the flat cost
- The builder failed to commence or complete Phase-2 of the project
- Promised amenities and timelines were misrepresented
- Possession, originally represented around 2015, was never offered
Invoking Sections 12 and 18 of RERA, the buyer sought to withdraw from the project and claim a full refund with interest and compensation.
Builder’s Defence Rejected
The developer denied the allegations and argued that:
- The booking was only provisional
- No possession date was agreed
- The buyer defaulted in loan repayment
- The dispute should be resolved through arbitration
MahaRERA rejected all these defences, holding that arbitration clauses cannot override statutory remedies under RERA and that promoters cannot escape liability by failing to execute an agreement for sale.
Key Findings of MahaRERA
MahaRERA recorded multiple serious violations:
- Illegal collection of funds: The builder received ₹83.22 lakh without executing a registered Agreement for Sale, violating Section 13 of RERA, which permits collection of only 10% without such an agreement.
- Unauthorized loan disbursement: The entire loan was released without the buyer’s request or consent and before construction approvals were obtained.
- Prolonged delay: Even the project’s declared completion dates of July 1, 2017 and later November 30, 2020 had long expired.
- Absolute right to refund: The Authority reiterated that under Section 18, once possession is delayed beyond the declared date, an allottee has an unconditional right to withdraw and seek refund with interest.
The Authority relied on the Supreme Court’s judgment in Fortune Infrastructure v. Trevor D’Lima to hold that buyers cannot be made to wait indefinitely and that three years is a reasonable period for completion in the absence of a fixed possession date.
Final Order
MahaRERA directed Sylvanus Properties Limited to:
- Refund ₹13,14,135 paid by the complainant
- Pay interest at SBI’s highest MCLR + 2%
- Calculate interest from July 2, 2017 till actual refund
- Complete payment within 30 days from the date of the order
The Authority clarified that it does not have jurisdiction to pass directions against the housing finance company, as RERA applies only to promoters, allottees, and real estate agents.
Why This Order Is Important for Homebuyers
This order is significant because it clearly establishes that:
- Builders cannot collect large sums without executing a registered Agreement for Sale
- Delays beyond declared RERA completion dates automatically trigger refund rights
- Subvention schemes do not dilute homebuyer protections
- Arbitration clauses cannot block RERA remedies
- Banks and builders can be scrutinised for premature loan disbursement, even if relief against lenders must be sought elsewhere
For thousands of homebuyers stuck in delayed or stalled projects, this order reinforces that RERA is a buyer-protection law with overriding statutory force.
Also Read: MahaRERA Orders Full Refund with Interest to Homebuyer for Possession Delay
