In a significant ruling that brings substantial relief to numerous homebuyers, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has directed developer Sheth Infraworld Pvt. Ltd. to pay interest at the prescribed rate of State Bank of India’s Highest Marginal Cost Lending Rate (MCLR) plus 2% for delays in handing over possession of flats. Crucially, the Tribunal also set aside the benefit of the moratorium period previously granted to the developer, preventing it from being used as an excuse for uncompensated delays.
The order, pronounced on June 27, 2025, by a coram of Shri Shriram R. Jagtap, Member (J), and Dr. K. Shivaji, Member (A), addresses a series of “Complaint for Non-compliance of Possession Order” applications filed by multiple allottees. Homebuyers like Leena Samant, Dr. Advait Ingole, Devdasan Jayaraj, Ms. Sandya Nayak, Vaishali Bhende, Sonali Bhoge, Victor S. D’souza, Sachin Shetty, Shetty Vishwas, Prashant Satish Hegde, and Sybil N. Bhurke were among the appellants seeking redressal for delayed project delivery.
Key Directives from the Tribunal:
The MahaREAT has modified previous orders, issuing clear directives to Sheth Infraworld Pvt. Ltd.:
- Interest on Paid Amounts: The promoter must pay interest to allottees on the amounts they have paid. The interest rate is fixed at the State Bank of India’s Highest MCLR plus 2% per annum. This interest will be calculated from the agreed possession dates specified in the agreements for sale until the actual dates of possession. The order even includes a detailed table with specific dates for various allottees, such as Leena D. Samant (interest from Jan 1, 2018, to actual possession on Jan 30, 2023) and Sybil Nilesh Bhurke (interest from Jan 1, 2017, to actual possession on Jan 28, 2023).
- Moratorium Benefit Overturned: A significant aspect of this ruling is the setting aside of the moratorium period benefit that was previously extended to the promoter. These benefits were granted under MahaRERA Notifications/Orders numbers 13, 14, and 21, issued on April 2, 2020, May 18, 2020, and August 6, 2021, respectively. This means the developer cannot use these moratorium periods to avoid paying compensation for delays during those times.
- Formation of Society & Conveyance: The promoter is mandated to form an association or society of allottees and execute the necessary conveyance deed within 45 days from the date of the order.
- Clearance of Liabilities & Project Handover: Sheth Infraworld Pvt. Ltd. is further directed to clear all project-related outgoings, including mortgage loans, interest on mortgages, and other encumbrances payable to competent authorities, banks, and financial institutions. Following this, the physical possession of the real estate project must be transferred to the association of allottees within 60 days.
- Adjustment of Deposited Funds: Any amounts previously deposited by the allottees with the Tribunal towards the flat’s consideration value will be adjusted against the interest payable by the promoter. If the interest due to the allottees exceeds the deposited amount, the excess amount with accrued interest will be refunded to the allottees.
Importance for Homebuyers:
This order is a critical development for homebuyers for several reasons:
- Reinforced Accountability: It sends a strong message to developers that project delays will incur financial penalties at the legally prescribed rates, reinforcing their accountability under the RERA Act.
- Clarity on Compensation: By explicitly directing payment at SBI MCLR + 2%, the order provides clear guidance on the compensation rate, aligning it with standard RERA provisions and ensuring fair redressal.
- Curbing Moratorium Misuse: The decision to revoke the moratorium benefit is a significant victory for homebuyers. It ensures that developers cannot unilaterally extend project timelines or avoid compensation for delays that occurred during periods for which moratoriums were previously granted by MahaRERA, bringing much-needed clarity and fairness.
- Timely Compliance: The strict deadlines for forming societies, executing conveyance, and clearing project liabilities push for faster resolution and transfer of responsibilities to the allottees.
- Legal Precedent: This ruling acts as an important precedent for similar cases of delayed possession across Maharashtra, empowering homebuyers to demand their rightful compensation and timely project completion.
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