Builder’s Fraud Backfires: Tried to Cancel Flat After Delaying Registration – Homebuyer Wins Big in Tribunal

In a landmark ruling that highlights how builders cannot escape liability for their own delays and wrongdoing, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has overturned a MahaRERA order and ruled entirely in favour of a Thane homebuyer. The case exposes how a promoter delayed registering an agreement for sale despite collecting stamp duty money from the buyer, then attempted to terminate the allotment – only for the Tribunal to set it aside and impose heavy penalties.

Case Details:

• Appeal No.: AT006000000053767 of 2022
• Original Complaint No.: CC006000000078636
• Appellant (Homebuyer): Suchitra Sudam Patil, resident of Block No. 305, Manogat Apartment, Kharegaon, Pakhadi, Kalwa, Thane-400605
• Respondent (Promoter/Builder): Kailash Chattrapati Patil, Shop No.4, Sun Flower Tower, Old Police Line, Parvati Bhavan, Creek Road, Kharkar Ali, Thane (West)
• Project: “Kailash Heights” (RERA Registration No. P51700006977)
• Tribunal Members: Coram – Shri S.S. Shinde (J), Chairperson & Shri Shrikant M. Deshpande, Member (A)
• Reserved on: 13th February 2026
• Pronounced on: 23rd February 2026 (via Video Conferencing)

Chronological Timeline of Events:

1. 2011 – Booking and Agreement: In 2011, Suchitra Sudam Patil booked Flat No. 602 on the 6th floor of “Kailash Heights”. On 19 June 2011, she executed an Agreement for Sale with the promoter for a total consideration of ₹35,79,000. She paid ₹12,00,000 (over 33% of the price) as part consideration. Additionally, she paid ₹2,17,000 to the promoter towards stamp duty (₹1,70,000), registration charges (₹38,000), scanning charges (₹2,000), registration agent fees (₹5,000), and a later ₹10,000 instalment – all specifically for registering the agreement.
2. Promised Possession Date: The agreement clearly stated possession within 18 months from the date of agreement, i.e., on or before January 2013.
3. Builder’s Delay in Registration (2011–2013): Under the Maharashtra Ownership Flats Act (MOFA) Section 4 (and later RERA Section 13), the promoter was obligated to register the agreement after accepting more than 20% (pre-RERA) or 10% (post-RERA) of the consideration. Despite receiving full stamp duty and registration funds from the buyer in 2011, the promoter deposited only ₹1,79,000 towards stamp duty as late as 28 December 2012 – nearly a year late. This caused the original registration challan to expire on 17 April 2013. Meanwhile, government stamp duty rates increased. The promoter then demanded additional stamp duty (around ₹1,00,300 in 2013, later ₹1,00,200 + ₹35,200 penalty in 2017) from the buyer, blaming her for non-cooperation.
4. Further Delays and Builder’s Demands (2013–2016): Fresh adjudication was filed in February 2016, but the promoter again failed to pay the deficit amounts. The buyer demonstrated willingness by paying an additional ₹5,00,000 instalment on demand, but the promoter refused to encash the cheque, citing non-payment of interest. The promoter never completed registration.
5. Illegal Termination (2016): On 4 August 2016, the promoter issued a termination letter, claiming the buyer failed to register the agreement and come forward for further payments.
6. Buyer’s Complaint to MahaRERA (2019): In April 2019, the buyer filed Complaint No. CC006000000078636 seeking registration of the agreement, possession, interest under Section 18 of RERA for delay, and compensation.
7. MahaRERA Order (4 April 2022): The Authority dismissed the complaint, holding that without a registered agreement, there was no clear possession date, and parties were bound by original terms for refund. It noted the 2016 termination was unchallenged.
8. Appeal to MahaREAT (2022): Aggrieved, the buyer appealed. The promoter did not appear for oral arguments but filed replies claiming the buyer caused delays and the allotment stood terminated.
9. Tribunal’s Landmark Judgement (23 February 2026): The Appellate Tribunal set aside the MahaRERA order completely. Key holdings:
   • The 2011 Agreement for Sale is valid and binding even unregistered, as non-registration was solely the promoter’s fault (he who prevents a thing from being done cannot benefit from it – citing Supreme Court precedents).
   • RERA applies retroactively to ongoing projects (relying on Supreme Court in Newtech Promoters case, 2021).
   • Promoter violated MOFA Section 4 and RERA Section 13 by not registering despite receiving >30% payment.
   • The 2016 termination is unlawful and set aside – not binding on the buyer.
   • Buyer showed full willingness; extra stamp duty/penalty burden falls on promoter due to his delay.
   • Delay in possession starts from February 2013 (no force majeure proved).
   • Buyer entitled to unconditional interest under RERA Section 18 (citing Bombay High Court in Bombay Dyeing and Neelkamal Realtors cases – even unregistered agreements qualify if terms are clear).

Final Relief Granted to Homebuyer:

• Promoter must register the 19 June 2011 Agreement for Sale within 30 days, at his own cost, without altering terms.
• Pay interest on ₹12,00,000 from 1 February 2013 till realization at SBI’s highest MCLR + 2% (currently 8.70% MCLR for 1-year tenor as of February 2026, so ~10.70% p.a.) – within 30 days, failing which interest continues.
• Complete construction, obtain Occupancy Certificate, and hand over possession of Flat No. 602, subject to buyer paying any genuine balance per the 2011 agreement.
• No third-party rights or encumbrances allowed on the flat.
• Miscellaneous applications disposed of; parties bear own costs.

This ruling is a powerful reminder for homebuyers: Builders cannot exploit procedural lapses they caused themselves. Even pre-RERA deals from 2011 can get full RERA protection if the project was ongoing. Homebuyers facing similar issues should document payments and willingness meticulously – it can turn the tables in appeals.

Also Read: Mumbai Housing Market Slipping: Registration Fall, Rs 1 Cr Homes Disappearing From Market