In a significant ruling that strengthens homebuyers’ rights under the Real Estate (Regulation and Development) Act, 2016 (RERA), the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has held that interest on refunds is payable from the actual dates the promoter received payments, not from a later project completion or default date. This decision came in an appeal where homebuyers successfully challenged a Maharashtra Real Estate Regulatory Authority (MahaRERA) order that limited interest accrual.
The case, Appeal No. AT006000000154550 of 2023 (arising from MahaRERA Complaint No. CC006000000197059 of 2021), was pronounced on February 13, 2026, by a bench comprising Shri Shriram R. Jagtap (Member – Judicial) and Dr. Ratnagopal Devara (Member – Administrative). The appeal was heard ex-parte as the respondents did not appear despite notices.
The appellants/homebuyers were Mr. Mohammed Saeed Ali Mullaji and Mrs. Fawziyah Mohammed Saeed Mullaji, residents of 303, Citi View, Plot No. L27/128, Near Canara Bank, Sector 30, Owe, Kharghar, Panvel, Navi Mumbai – 410210.
The respondents/promoters were Onyx Builders and Mr. Zahid Iltiza Khan, with their address at 318, G.K. Estate, Near Deluxe Hotel, L.B.S. Marg, Kurla (West), Mumbai – 400070.
In July 2013, the homebuyers initially booked Flat No. 602 (925 sq.ft. on the 6th floor) in the promoter’s project “Onyx Aura”, located at CTS No. 177, Village Kurla-IV, L Ward, L.B.S. Marg, Kurla (West), Mumbai – 400070, for a total consideration of approximately ₹76.88 lakh. They paid ₹60 lakh as part-payment, and the promoter issued a letter of allotment dated 29.07.2013. No registered agreement for sale was ever executed, in violation of Section 4(1) of the Maharashtra Ownership of Flats Act, 1963 (MOFA).
Construction made no progress for years. Later, the promoter proposed switching to another project, “Onyx Residency” (also at 318, G.K. Estate, Near Deluxe Hotel, L.B.S. Marg, Kurla (West), Mumbai – 400070), with a higher consideration of ₹1.50 crore. The parties executed a Memorandum of Understanding (MoU) on 19.06.2019, agreeing to adjust the earlier ₹60 lakh and accept the balance ₹90 lakh at possession. However, this project too stalled due to lack of necessary approvals since around 2016.
Feeling defrauded, the homebuyers filed a complaint with MahaRERA in 2021 seeking withdrawal from the project under Section 12 of RERA and refund with interest under Section 18.
In its impugned order dated 04.05.2023, MahaRERA directed full refund of the ₹60 lakh (which the promoter had accepted in conciliation) but denied interest from payment dates. Instead, it awarded interest only from 30.12.2021 (treated as the project’s default/completion date) till realization, citing the absence of a registered agreement for sale and thus no agreed possession date.
Challenging this, the homebuyers appealed to MahaREAT. Represented by Advocate Godfrey W. Pimenta, they argued that interest under Section 18 is an unqualified right starting from receipt of money, as defined in Section 2(za)(ii) of RERA and reinforced by Rule 19 of the Maharashtra RERA Rules, 2017.
MahaREAT agreed, setting aside the limitation on interest. The Tribunal held:
- The promoter contravened MOFA by accepting substantial advances without a registered agreement.
- Failure to deliver possession entitled the allottees to withdraw and claim refund with interest under Section 18.
- Interest is payable from the dates the promoter received the amounts (here, from July 2013) till realization, at State Bank of India’s highest Marginal Cost of Lending Rate (MCLR) + 2%.
- The allottee’s right is unconditional; the Authority cannot impose restrictions or shift the start date contrary to statute, even without a registered agreement or specified possession date.
The Tribunal partly modified the MahaRERA order:
- Upheld full refund of ₹60 lakh.
- Directed interest from respective payment dates till realization.
This ruling is a major boost for homebuyers in stalled or delayed projects, especially where promoters delay or avoid executing registered agreements. It clarifies that promoters cannot evade full interest liability by procedural lapses, ensuring compensation reflects the true period the buyer was deprived of their funds.
The order has been communicated to MahaRERA and the parties as per Section 44(4) of RERA.
