In a significant ruling that strengthens the rights of homebuyers who booked flats on the basis of allotment letters in the pre-RERA era, the Maharashtra Real Estate Appellate Tribunal has directed Parorch Developers LLP to refund over ₹2.25 crore along with interest to two homebuyers in the “Trinity Towers” project in Powai. The Tribunal overturned the MahaRERA Authority’s order that had dismissed the complaint, holding that an allotment letter constitutes a valid and enforceable contract under RERA.
The order, pronounced on 9th June 2026 by a bench comprising Chairperson Justice S.S. Shinde and Member (A) Shrikant M. Deshpande in Appeal No. AT006000000053518-2021, is likely to have far-reaching implications for hundreds of similar delayed possession and refund cases involving incomplete projects registered under MahaRERA.
Background of the Case
Ruma Mehta and Rakesh Mehta had booked Flat No. 1401 (admeasuring 1,739.22 sq.ft.) in Trinity Towers (Project Registration No. P5800008384) at Powai in February 2014. The total consideration was ₹3.75 crore. The allottees paid a substantial amount of ₹3.25 crore between February 2014 and February 2015 as per demands raised by the promoter.
The promoter had promised possession by mid-2017. However, the project remained incomplete, and no possession was delivered despite the buyers following up regularly. In 2016, the promoter refunded ₹1 crore in four installments, but failed to refund the balance amount.
Aggrieved, the homebuyers filed Complaint No. CC006000000078910 before MahaRERA in April 2019 seeking refund of the paid amount with interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016.
MahaRERA Authority Dismisses Complaint
In its order dated 28th January 2020, the MahaRERA Authority dismissed the complaint. The Authority held that no refund with interest could be ordered under Section 18 because:
- No Agreement for Sale was executed and registered between the parties.
- The cause of action for cancellation arose prior to the RERA Act coming into force on 1st May 2017.
Tribunal Overturns Authority Order
The Appellate Tribunal set aside the Authority’s order and ruled in favour of the homebuyers on several crucial legal points:
- Allotment Letter is a Valid Contract: The Tribunal observed that the allotment letter dated 22.04.2014 contained all essential elements — description of the flat, area, total consideration, payment schedule, and terms & conditions. It qualifies as a concluded contract under Sections 2(a) and 2(b) of the Indian Contract Act, 1872, and is enforceable under RERA.
- RERA Applies Retroactively to Ongoing Projects: Relying on the Supreme Court’s landmark judgment in M/s. Newtech Promoters and Developers Pvt. Ltd. vs State of U.P. (2021), the Tribunal held that RERA is retroactive in nature. All ongoing projects (where completion certificate has not been issued) are covered under the Act, irrespective of when the booking was made.
- Reasonable Time for Possession: Since the allotment letter did not mention a specific possession date, the Tribunal applied the Supreme Court’s ruling in Fortune Infrastructure vs Trevor D’Lima and held that three years is a reasonable period. The promoter was therefore obligated to hand over possession by early 2017.
- Unconditional Right under Section 18: Once a promoter fails to deliver possession by the due date, the allottee has an unconditional right to seek refund along with interest. The Tribunal directed the promoter to refund the balance amount of ₹2,25,56,358/- along with interest at the rate of 2% above SBI’s Highest Marginal Cost Lending Rate (MCLR) from the respective dates of payments made by the allottees (after adjusting the ₹1 crore already refunded).
The promoter must make the payment within 30 days of the order (by around 9th July 2026), failing which additional interest will accrue on the outstanding amount. Parties are to bear their own costs.
Significance of the Order
This judgment is particularly important for homebuyers in older Mumbai projects who booked flats before RERA but paid substantial amounts on the strength of allotment letters or booking forms. Promoters can no longer take shelter behind the absence of a registered Agreement for Sale to deny refunds in delayed possession cases.
Advocate Atul Gupta appeared for the appellants, while C.A. Sunil Naik represented the respondent promoter.
The promoter had cited financial difficulties and mentioned consent terms during hearings, but the Tribunal upheld the homebuyers’ statutory rights under RERA.
This order reinforces the pro-consumer intent of the RERA Act and sends a strong message to defaulting promoters in Maharashtra’s real estate sector.
Also Read: MahaRERA Orders Refund Paid for Seven Flats in Godrej RKS Project
