In a significant pro-homebuyer ruling, the Bombay High Court has declared that homebuyers (allottees) and real estate developers (promoters) are not on equal footing, with the position of homebuyers being “generally very vulnerable”. The Court emphasised the severe financial and emotional hardship faced by buyers who pay substantial amounts years in advance only to face prolonged delays and stalled projects.
Justice N.J. Jamadar delivered the judgment on 30 March 2026 in Second Appeal Nos. 121 and 122 of 2026, dismissing the appeals filed by Rare Townships Private Limited against homebuyer Mitul Gada. The Court upheld the Maharashtra Real Estate Appellate Tribunal’s order permitting the allottee to withdraw the refund amount deposited by the promoter during the pendency of the appeal.
Sequence of Events
- November 2015: Mitul Gada entered into two Agreements for Sale with Rare Townships for Flat Nos. 1503 and 1504 in the “North Sea Heights (A1)” project at Ghatkopar. The promoter promised possession by 31 December 2018. Gada paid ₹98,92,960 for Flat 1504 and ₹69,66,437 for Flat 1503.
- 2018–2020: Possession was not delivered. Construction came to a standstill. Gada filed complaints before MahaRERA seeking refund under Section 18 of the RERA Act, 2016.
- February 2020: MahaRERA referred the complaints to the Adjudicating Officer.
- March 2021: Adjudicating Officer directed refund with interest and compensation.
- 2021–2025: Promoter challenged the order in writ petitions before the Bombay High Court. The High Court directed the promoter to deposit the amounts (totaling over ₹3.26 crore) in Court. The writ petitions were disposed of in April 2025, remanding the matter to MahaRERA with liberty to the Authority to disburse the deposited amounts if found due to the allottee.
- September 2025: MahaRERA directed the promoter to refund the entire amount paid by Gada along with interest at SBI’s highest marginal cost of lending rate + 2% (with COVID moratorium benefit).
- Late 2025: Promoter filed appeals before the Maharashtra Real Estate Appellate Tribunal and sought stay on execution. The Tribunal granted stay on further recovery but allowed Gada to withdraw the deposited amounts subject to an undertaking to refund the money with interest if the promoter ultimately succeeds.
- January–March 2026: Aggrieved by the withdrawal permission, the promoter approached the Bombay High Court in second appeals.
Court’s Strong Observations on Homebuyer Vulnerability
Dismissing the appeals, Justice Jamadar observed:
“The promoter and allottee cannot be placed on an equal footing. The capacity to withstand the deprivation of the legitimate amount vastly differs and the position of the allottee is generally very vulnerable.”
The Court noted that over 11 years had passed since the agreements were signed and more than seven years since the promised possession date, yet the project remained incomplete. The allottee continued paying EMIs on home loans while his hard-earned money remained blocked with the promoter.
The judgment clarified that the pre-deposit requirement under the proviso to Section 43(5) of RERA (at least 30% of the penalty or the total amount payable to the allottee) is meant to safeguard the allottee’s interest. However, this does not freeze the money indefinitely. The Appellate Tribunal has discretion to release the deposited amount in deserving cases, especially where long delays and clear default by the promoter are established.
The Court relied on the Supreme Court’s ruling in Newtech Promoters and Developers Pvt. Ltd. vs. State of UP (2021) but clarified that the pre-deposit provision is not a bar on disbursement during appeal when equities demand it.
Key Takeaways
- Homebuyers’ money paid years ago is not “developer’s money” — it remains the buyer’s legitimate amount plus interest for deprivation.
- Appellate Tribunals can permit withdrawal subject to undertakings, balancing the promoter’s right to appeal with the buyer’s immediate hardship.
- The ruling reinforces RERA’s beneficial intent to protect vulnerable homebuyers from prolonged litigation and financial distress.
The appeals were dismissed with costs, and the interim applications also disposed of. The allottee can now withdraw the deposited refund amount upon furnishing the required undertaking.
Also Read: Refund Allowed — But Not Final: Homebuyers Must Repay If Builder Wins Appeal
