In a significant verdict strengthening homebuyer rights, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) addressed shortcomings in a lower MahaRERA order, explicitly directing a developer to not only refund the amount paid but also award delayed possession interest and honor a promised rebate for upfront payment.
The order, passed in the case of Ritwija Mukund Joshi & Anr. vs. Mega Developers & Ors. (Appeal No. AT005-53291/21), focused on ensuring all entitled financial reliefs are granted to the allottees. The Appellate Tribunal’s decision underscores that the promoters cannot escape their financial obligations under the Real Estate (Regulation and Development) Act, 2016 (RERA), or the terms of their agreement.
The Unconditional Right to Interest for Delay
The core of the dispute arose from the developer’s failure to hand over possession of the flats on the agreed date, a clear violation of Section 18 of the RERA Act. While the MahaRERA Authority initially directed the developer to refund the amount to the homebuyers, it failed to award interest on the amounts paid by the allottees for the period of delay.
The MahaREAT has now set this right, clarifying that an allottee is entitled to interest for every month of delay, calculated at the prescribed rate, in addition to the refund amount. This ruling reinforces the absolute nature of the homebuyer’s right under RERA to claim interest for delayed possession, ensuring developers bear the financial cost of their default.
Enforcement of Promised Upfront Payment Rebate
Another critical point of the appeal was the failure of the MahaRERA Authority to direct the respondents to pay the amount offered by way of a rebate on account of upfront payment made by the allottees.
The Appellate Tribunal’s decision to enforce the payment of this rebate is a major win for homebuyers who make substantial upfront payments, often to avail such discounts. It establishes that such contractual commitments for rebates, which incentivize faster fund collection for the developer, cannot be reneged upon and must be treated as a legally enforceable financial liability of the promoter.
Key Takeaway for Homebuyers
This judgment serves as a robust precedent for homebuyers across Maharashtra. It clarifies that:
- RERA Interest is Mandatory: If a project is delayed, the homebuyer is unconditionally entitled to interest on the amounts paid, even if they are seeking a full refund.
- Contractual Commitments are Binding: Financial benefits like upfront payment rebates promised by the developer are enforceable and must be honored, regardless of whether possession is eventually delivered or the buyer seeks a refund.
- Appellate Recourse is Effective: Homebuyers aggrieved by an Authority order that overlooks certain reliefs can effectively seek correction and comprehensive justice from the Appellate Tribunal.
Also Read: MahaREAT orders Sheth Infraworld to compensate homebuyers for project delays
