In a landmark decision, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has ordered developers to refund a homebuyer’s ₹7.5 lakh cash payment from 2009, recognizing an unregistered agreement as a valid contract and upholding the transaction despite the absence of bank records. This ruling in a Pune housing dispute marks a significant win for pre-RERA buyers, enforcing promoter accountability through joint liability and interest provisions.
The 2009 Cash Transaction at the Heart of the Dispute
The case revolves around Neha Swapnil Khamkar, who in August 2009 paid ₹7.5 lakh in cash to Babaji Jadhav, a partner in M/s. Drushti Developers, for a 600 sq.ft. flat in the proposed “Gloria” project in Katraj, Pune. In exchange, she received an unregistered agreement for sale dated August 28, 2009, a receipt bearing No. 005 dated August 28, 2009, and a post-dated cheque for ₹15 lakh dated February 28, 2011, as compensation in case of non-fulfillment. The agreement promised possession within 18 months from the sanction of the building plan.
Despite repeated follow-ups, the promoters neither executed a registered agreement for sale nor delivered possession. Khamkar filed a complaint with MahaRERA in 2020, which was dismissed on June 16, 2021, on grounds of limitation and non-applicability under Section 13 of the RERA Act. She appealed to MahaREAT, heard via video conferencing on November 13, 2025.
Tribunal Validates Unregistered Agreement and Cash Payment
The tribunal, comprising Judicial Member Shriram R. Jagtap and Administrative Member Rajagopal Devara, ruled that the unregistered agreement and receipt constituted a valid “concluded contract” under the Indian Contract Act, 1872. Sections 2(a) and 2(b) were invoked to confirm an offer by the allottee and acceptance by the partnership firm through payment acknowledgment and flat allotment in a pre-launch scheme, where no sanctioned plans existed, making specific flat details unnecessary.
On the cash payment, the developers contested the lack of proof, but the tribunal upheld it based on the agreement’s acknowledgment of receipt and a Supreme Court precedent in Georgekutty Chacko vs. M.N. Saji (Civil Appeal No. 11309 of 2025). The court noted that cash transactions, common in money dealings, do not require formal documentation if categorically stated and acknowledged, shifting the onus to the respondents to disprove.
Under the Indian Partnership Act, 1932, Jadhav was deemed a “working partner” per the 2007 Deed of Partnership and 2012 Reconstruction Deed, granting him implied authority (Sections 18 and 19) to bind the firm in real estate sales – its ordinary course of business. Section 22 confirmed the acts were executed in the firm’s name, and Section 25 imposed joint and several liability on all partners (Respondents 2 to 14) for actions during their tenure.
Relief Molded to Refund and Interest, as Project Completion Bars Specific Performance
With the “Gloria” project complete, all flats sold, and a completion certificate obtained, the tribunal found specific performance (execution of a registered agreement) unfeasible. Invoking Order 41 Rule 33 of the Code of Civil Procedure, it molded the relief to direct Respondents 1 to 14 (the partnership firm and partners) to pay ₹15 lakh – inclusive of the ₹7.5 lakh original payment – with simple interest at the State Bank of India’s Marginal Cost of Lending Rate plus 2%, from August 29, 2009, until realization.
The ₹15 lakh figure aligns with the post-dated cheque, reflecting the firm’s intent to compensate for non-fulfillment. The allottee retains the option to file a fresh complaint before MahaRERA’s Adjudicating Officer for additional compensation.
Limitation Overturned: Continuous Cause of Action Applies
The tribunal rejected the limitation defense under Article 54 of the Limitation Act, 1963, ruling the complaint timely due to a “continuous cause of action” under Section 22. The promoters’ refusal to execute the agreement (evident in their reply to Khamkar’s May 19, 2018, notice) and ongoing project breaches – including revised commencement in 2015 and construction in 2015-16 under MahaRERA registration – reset the three-year period. This draws from Supreme Court observations in Samruddhi Co-operative Housing Society Limited vs. Mumbai Mahalaxmi Construction Private Limited, emphasizing promoter obligations under the Maharashtra Ownership Flats Act (MOFA) for registered agreements and outgoings until transfer.
Implications for Pre-RERA Buyers
Delivered on November 13, 2025, this order partly allows the appeal, sets aside the MahaRERA dismissal, and disposes of pending applications, with parties bearing their own costs. It signals stronger protections for informal pre-2016 transactions, particularly in partnership-driven developments, amid over 5,000 pending legacy appeals in Maharashtra. For buyers in emerging areas like Katraj, it underscores that time does not erode valid claims, holding developers to account for past promises.
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