MahaRERA holds outgoing and incoming developers jointly liable after 2018 cancellation was accepted but never honoured
MahaRERA has told both the original promoter and the developer who later took over the Kam Ganesh Co-operative Housing Society redevelopment that they must jointly and severally refund Rs 38 lakh to three homebuyers, with interest from the dates of payment. The order, dated 1 September 2026, is notable because the new developer was not the party that collected the money, accepted the cancellation in 2018, or issued the cheques that bounced. Member II Ravindra Deshpande still fastened liability on both.
The complaint, CC006000000303575, was filed by Deepak Kanhaiyalal Shimpi, Vandana Deepak Shimpi and Nikhil Shimpi against Mishal Construction Pvt Ltd and, after an amendment, M/s Shubh Prabhu Infracom LLP (also described in the record as Shubha Prabhav Infracom LLP). The project is registered as P51900008403.
What was booked and how much was paid
In August 2017 the promoter advertised two redevelopment projects in Maharashtra Times. Possession for Kam Ganesh was shown as 31 December 2021. The Shimpis booked Flat No. 404, a 647 sq ft carpet 2 BHK on the 4th floor of A Wing, plus one car parking, for Rs 1.36 crore.
They paid Rs 5 lakh on 4 September 2017 and another Rs 33 lakh when IOD and commencement certificate were cited. Total paid: Rs 38 lakh. No registered Agreement for Sale was ever executed.
Ten per cent of the agreed price is Rs 13.60 lakh. Accepting Rs 38 lakh without a registered agreement is a breach of Section 13(1) of RERA. MahaRERA recorded that finding in terms.
Cancellation in 2018 was accepted in writing
By December 2017 the old building had been demolished but little further work was visible. The buyers asked to cancel in August and September 2018.
On 20 November 2018 the promoter accepted the cancellation and agreed to refund the entire Rs 38 lakh, without deducting earnest money, after 90 days and within 180 days. The buyers returned original receipts and the allotment letter the next day.
In June 2019 post-dated cheques aggregating Rs 38 lakh were issued, along with smaller cheques towards delay compensation. A cheque of Rs 38,750 bounced for insufficient funds. Fresh cheques dated 20 November 2019 and then 20 March 2020 followed. Each time, shortly before the due date, the promoter asked the buyers not to deposit them because there was no money. The principal amount stayed unpaid.
The second-project detour did not wipe out the first debt
After the March 2020 lockdown the promoter offered to adjust the unpaid Rs 38 lakh against Flat No. 203 in Gagan Vihar CHS (P51900006748), described as an investor flat nearing completion. The buyers paid a further Rs 20 lakh in January 2021. Draft agreements were exchanged; the promoter then refused to show the Rs 38 lakh as adjusted and demanded the full price.
That dispute produced a separate complaint, CC006000000197454. During conciliation the promoter refunded Rs 15 lakh of the Rs 20 lakh paid for the second flat. MahaRERA later directed refund of the remaining Rs 5 lakh; a non-compliance order and a recovery warrant followed. In the present case the Authority treated that Rs 5 lakh chapter as distinct. The Rs 38 lakh claim against Flat 404 stood on its own receipts and on the promoter’s 20 November 2018 letter.
Society removes the old developer; buyers bring in the new one
On 29 July 2021 Kam Ganesh CHS terminated Mishal Construction and appointed a new developer. Mishal’s defence was that it had lost control of the project, had “retained” the booked flat for the allottees, and that any refund would have to come after money was recovered from that flat or after the buyers dealt with the new developer.
The buyers applied to implead the new developer. The application was allowed on 11 June 2025. Despite opportunity, Respondent No. 2 filed no reply. The Authority proceeded on the unrebutted record as against the new developer.
Why the new builder cannot walk away from the old default
This is the core of the order. MahaRERA held that:
- The right to refund had already accrued in 2018 when cancellation was accepted and the amount was acknowledged.
- A later private arrangement between the society and two developers cannot prejudice allottees who paid the outgoing promoter.
- Once buyers elect to withdraw, they cannot be forced to remain in an incomplete project or wait for an uncertain completion date.
- The new developer, having stepped into the project, cannot treat existing allottee obligations as extinguished merely because the name on the registration or the development rights has changed.
- The outgoing promoter’s plea that it must first recover money from the “retained” flat was rejected.
Both respondents were therefore directed to refund Rs 38 lakh jointly and severally.
Interest, what was refused, and costs
Interest was granted at SBI’s highest MCLR plus 2% per annum, as prescribed under Rule 18 of the Maharashtra RERA Rules, 2017, from the respective dates of payment until actual realisation. Payment is to be made within 60 days of the order.
A separate claim of Rs 10 lakh for mental harassment and trauma was rejected. The Authority held that statutory interest under Section 18 is itself compensatory.
Costs of Rs 20,000 were awarded because the buyers had to approach MahaRERA after the promised refund never came.
The complainants had relied on Newtech Promoters, Tribunal rulings that refund with interest can follow even without a registered agreement where booking and payment are proved, and the principle that RERA does not expressly allow forfeiture of amounts paid on cancellation. Those propositions supported the refund; they did not produce extra compensation beyond interest.
What the order does — and does not — decide
The order does not decide title to Flat 404 as against the society or any third party. It does not transfer the project. It does not hold the new developer guilty of the 2017–2018 collection or of the bounced cheques. It holds that once a subsequent developer is on the project and on the array of parties, allottee refund rights attached to that project do not vanish with a change of promoter.
Mishal’s case that part of the money originally related to a booking in Gagangiri CHS was not accepted as a defence to the documented Rs 38 lakh receipt against Kam Ganesh Flat 404.
Why housing societies and incoming developers should read this closely
Redevelopment often involves a mid-stream change of developer after delays, disputes or termination. Incoming developers frequently assume that historical booking money and failed refunds are the outgoing promoter’s private problem. This order says the opposite when the new developer is impleaded and does not contest the record: joint and several refund liability can follow.
For homebuyers the practical points are simpler. Keep the cancellation letter, the refund promise, the bounced-cheque memos and the payment receipts. A change of name on the site board does not automatically close a Section 18 claim. Paying more than 10% without a registered agreement remains a statutory breach by the collector of the money, and it strengthens the withdrawal case.
The complaint was partly allowed on 1 September 2026 and disposed of.
Also Read: MahaRERA Tribunal Holds Ex-Partner as ‘Promoter’, Affirms Allottee’s Rights in RERA Battle
