Authority orders refund after deducting only 1.5% of unit cost, directs interest from September 13, 2024.
In a significant ruling that strengthens homebuyer rights, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that developers cannot forfeit the entire booking amount when an allottee cancels a unit booking. The Authority directed Mahalunge Township Developers LLP (Godrej Hill Retreat 2) to refund the full amount paid by complainant Bhuvan Chawla, after deducting only 1.5% of the total unit cost, as permitted under Order No. 60/2024 dated 03.09.2024.
The order was pronounced by MahaRERA Chairperson Shri Manoj Saunik on November 20, 2025, after the matter was reserved for orders on August 26, 2025.
Case Background
The complainant, homebuyer Bhuvan Chawla, booked Unit No. 2504 (25th floor) in Godrej Hill Retreat 2, paying ₹8,49,442 between May and June 2024. An allotment letter was issued on June 22, 2024, showing the proposed possession date as March 28, 2027, with a total unit cost of ₹80,89,925.42.
However, after receiving the draft Agreement for Sale on July 2, 2024, Chawla raised objections to multiple clauses that he alleged were unilateral, arbitrary and contrary to Section 14(2) of RERA, including:
- Provisions permitting the developer to change building plans unilaterally
- Escalation charges
- Excessive holding/maintenance costs
Chawla requested cancellation and refund on July 29, 2024, within 37 days of the allotment letter—within the permissible period defined in the model allotment form under Order 60.
Developer Forfeited Entire Amount
Instead of processing a refund, the developer forfeited the full booking amount, claiming the cancellation was buyer-driven and arguing that forfeiture was justified under contract law. The respondent relied on Supreme Court judgments regarding earnest money to support its position.
The complainant issued repeated follow-ups and served a legal notice on December 26, 2024, receiving a reply on February 3, 2025, after which he filed the present complaint on February 14, 2025.
MahaRERA Examination
MahaRERA observed:
- The allotment letter was signed only by the promoter; yet both parties accepted it as valid.
- The developer accepted more than 10% consideration without executing an Agreement for Sale, prima facie violating Section 13(1) of RERA.
- Under Clause 9 of the model allotment form, when cancellation is requested between 31–60 days, the developer may deduct only 1.5% of the unit cost.
- Refund must be made within 45 days from the cancellation request.
- Delay mandates payment of interest at SBI highest MCLR + 2%.
Key Findings & Order
MahaRERA held that the developer’s action was inconsistent with RERA norms:
“The action of the respondent in forfeiting the entire paid amount of Rs. 8,49,442/- is inconsistent with Clause 9 of the allotment letter and the provisions of Order No. 60/2024.”
Final Directions
- Developer must refund the balance amount after deducting only 1.5% of total unit cost
- Refund must be paid within 60 days
- Interest due from September 13, 2024, until realization, at rate prescribed under Rule 18
- Refund includes only principal consideration, excluding stamp duty, taxes, registration fees and statutory charges
- No costs were awarded
Key Legal Significance
This ruling reinforces that:
- Developers cannot arbitrarily confiscate booking amounts
- Refund rules are governed uniformly by Order No. 60/2024 and model allotment terms
- Buyer intent or cancellation reasons are irrelevant once procedure is followed
- MahaRERA prioritizes consumer protection and transparency obligations
Industry professionals expect this decision to influence how forfeiture disputes are handled across Maharashtra.
Also Read: How Much Money Can a Builder Forfeit If a Homebuyer Cancels a Deal?
