In a significant ruling that strengthens homebuyer rights under RERA, the Bombay High Court has held that allottees who continue with a delayed real estate project do not lose their right to claim interest for the period of delay.
Justice Sharmila U. Deshmukh dismissed the second appeal filed by promoter CCI Projects Private Limited and upheld the order of the Maharashtra Real Estate Appellate Tribunal directing the promoter to pay interest at SBI’s highest Marginal Cost of Lending Rate (MCLR) plus 2% from 1 July 2017 till actual possession.
The Case in Brief
Allottees Mr Sriram Krishnan and Mrs Vidya Sriram had booked a flat in the “Wintergreen” project developed by CCI Projects at Rivali Park, Borivali East. They entered into a registered Agreement for Sale on 18 November 2014, under which the promoter was required to hand over possession on or before 30 June 2017.
The allottees paid a major part of the consideration of ₹1,95,06,060 along with stamp duty, registration charges, and taxes. However, possession was not delivered even after the agreed date.
Sequence of Events
- 18 November 2014: Agreement for Sale signed. Possession due by 30 June 2017.
- September 2018: Allottees file complaint before MahaRERA (CC006000000056115) seeking possession and interest for delay.
- 31 January 2019: MahaRERA directs the promoter to hand over possession by 31 December 2019 and grants the allottees “liberty to demand interest at an appropriate stage” under Section 18 of RERA.
- 10 March 2021: Maharashtra Real Estate Appellate Tribunal quashes the RERA order and directs the promoter to pay interest from 1 July 2017 till possession, along with ₹25,000 costs.
- 2021–2026: Promoter challenges the Appellate Tribunal’s order before the Bombay High Court through Second Appeal No. 472 of 2021.
- 5 March 2026: High Court frames four substantial questions of law, including whether acceptance of delayed performance under Section 55 of the Indian Contract Act disentitles allottees from claiming interest under RERA.
- 18 June 2026: Bombay High Court dismisses the promoter’s appeal and upholds the Appellate Tribunal’s order.
Key Observations by the Bombay High Court
The Court held that Section 18 of the RERA Act confers an unqualified and absolute right on allottees.
In Paragraph 31, the judgment states:
“In the context of real estate project, where the performance of promise of the promoter is to hand over possession by a specified date, the right given by Section 18 of RERA Act to continue with the project is nothing but permitting acceptance of delayed performance without foregoing the right to claim interest for every month of delay.”
The Court further observed in Paragraph 37:
“The unqualified absolute right of the allottee stands statutorily recognized in Section 18 of RERA Act and the continuation with the project… does not impact the unfettered statutory right conferred by Section 18 of RERA Act to claim interest.”
The High Court clarified that RERA being a special law prevails over the general provisions of the Indian Contract Act. It rejected the promoter’s argument that by making payments as per revised schedules and staying with the project, the allottees had waived their right to interest.
What This Means for Homebuyers
This judgment sends a clear message: Simply continuing with a delayed project or making payments as demanded does not mean you have given up your right to interest.
Homebuyers who choose to stay in the project (instead of seeking a refund) are still entitled to interest for every month of delay from the date mentioned in their Agreement for Sale. The right under Section 18 is statutory and unconditional.
The promoter has been directed to pay interest from 1 July 2017 (the very next day after the contractual due date) till the date of actual possession.
Also Read: Homebuyers Win Big: Tribunal Nixes Builder Moratorium, Orders Compensation for Delays
