In a significant decision that bolsters homebuyers’ rights, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has delivered a landmark ruling in the Indiabulls Sky Forest project case. The Tribunal has directed M/s. Indiabulls Properties Private Limited, the developer, to refund the principal amount to aggrieved homebuyers with interest calculated, in part, from the dates of their payments. This judgment sets a crucial precedent for thousands of homebuyers grappling with delayed projects across Maharashtra.
The Heart of the Matter: Delayed Possession and Homebuyer Rights
The case involves Mr. Mitul Shah and Hemalini H. Shah, who purchased a flat in the “INDIABULLS SKY FOREST -A3” project back in 2015. As per their agreement for sale, the developer had promised possession of the flat by December 31, 2018, with a grace period extending to September 30, 2019. However, the project faced significant delays, with the completion date on MahaRERA’s website being subsequently revised to September 30, 2023. Despite obtaining a part occupation certificate on April 20, 2022, covering the subject flat, possession was not handed over as promised.
Aggrieved by these delays, the homebuyers approached the Maharashtra Real Estate Regulatory Authority (MahaRERA), seeking a refund of their paid amount of Rs. 2,18,83,105/- with interest. They contended that the developer unilaterally extended possession dates and altered plans without the consent of allottees.
Developer’s Defence: Force Majeure and Subvention Scheme
M/s. Indiabulls Properties Private Limited argued that the delays were due to “unforeseeable circumstances” such as the Municipal Corporation of Greater Mumbai’s (MCGM) delay in taking possession of parking spots and the COVID-19 pandemic, classifying these as force majeure events under their agreement. They also highlighted that the homebuyers had only contributed around 20% of the flat’s consideration, with the developer having paid pre-EMIs under a subvention scheme with Indiabulls Housing Finance Limited.
MahaRERA’s Initial Stance and the Appeal
MahaRERA initially allowed the homebuyers to withdraw from the project and directed a refund with interest applicable from October 1, 2019. The Authority emphasized that Section 18 of the RERA Act, 2016, is an “absolute provision” that entitles allottees to interest for delays, irrespective of force majeure events cited by developers. MahaRERA also granted the developer the benefit of a moratorium period due to COVID-19 for interest calculation.
However, the homebuyers appealed this decision, primarily seeking interest on their full refund amount from the
dates of their respective payments, rather than a fixed later date.
Tribunal’s Landmark Decision: Interest from Payment Date
The MahaREAT, after reviewing the case, partially allowed the homebuyers’ appeal, modifying the original order. The Tribunal directed M/s. Indiabulls Properties Private Limited to refund Rs. 1,66,60,389/- along with interest at a rate of 2% above the State Bank of India’s highest marginal cost lending rate,
from the date of respective payments of these amounts. This significantly shifts the burden of delay onto the developer by making interest applicable from an earlier point for a substantial portion of the refund. The developer has 30 days to comply, failing which further interest will apply from September 1, 2025.
Furthermore, the Tribunal ordered the developer to execute a deed of cancellation within two months to facilitate the refund of stamp duty and other government taxes paid by the homebuyers. This ruling reaffirms the robust protections offered by RERA to ensure homebuyers are not unduly penalized for developer defaults.
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