In a significant ruling that reinforces the limits of homebuyer exit rights under the Real Estate (Regulation and Development) Act, 2016, the Maharashtra Real Estate Appellate Tribunal (MREAT) has made it clear: a flat cannot be “returned” once possession is taken, and refund cannot be claimed thereafter under RERA.
The Tribunal dismissed Appeal No. AT006/000000053725/2022 filed by Nandkishore Harikrishan Altal against Marvel Landmarks Pvt. Ltd. and others, holding that the appeal had become infructuous after the allottee took possession of the flat during the pendency of proceedings.
Case background: From delayed possession to refund claim
The dispute relates to a luxury residential project “Marvel Ganga Sangaria” at Mohammadwadi, Pune.
The appellant had purchased Flat No. 301 for a total consideration of ₹3.00 crore under a registered Agreement for Sale dated 4 October 2011, with the promised possession date being 31 December 2013.
While a correction deed was executed in 2014 to rectify a typographical error in the building wing, possession was not handed over by the due date. Aggrieved by the delay, the buyer approached MahaRERA under Section 18, seeking:
- Withdrawal from the project
- Refund of the paid amount with interest and compensation
However, MahaRERA dismissed the complaint in November 2021 on the ground that the complaint was filed against the wrong project registration, as the flat fell in a different registered phase.
What changed during the appeal
While the appeal against MahaRERA’s order was pending before the Appellate Tribunal, a crucial development altered the legal landscape:
- The flat had been mortgaged to Phoenix ARC Pvt. Ltd.
- Due to loan default, Phoenix ARC took physical possession on 11 November 2021 under the SARFAESI Act
- The appellant later cleared all dues and re-took possession of the flat on 19 July 2023, supported by a possession letter placed on record
Despite having taken possession, the appellant argued that he was no longer interested in the flat and was willing to return it to the promoter in exchange for a full refund with interest.
Why the Tribunal said “no return after possession”
The Appellate Tribunal, comprising Justice S. S. Shinde (Chairperson) and Shrikant M. Deshpande (Member – Administrative), rejected this argument outright.
The Tribunal held that:
- Section 18 of RERA permits refund only when the allottee chooses to withdraw due to failure to hand over possession.
Once possession is taken, the right to withdraw comes to an end. - RERA does not contain any provision allowing an allottee to return a flat after taking possession and seek a refund of the principal amount.
- Even though possession was initially taken by the lender under SARFAESI, it arose from the buyer’s own mortgage and default.
When the appellant cleared the loan and took back possession, the law treated it as acceptance of possession by the allottee. - Having taken possession, the promoter’s primary contractual obligation stood substantially fulfilled, rendering the appeal for refund legally unsustainable.
On these facts, the Tribunal concluded that the appeal had lost its purpose and therefore dismissed it as infructuous.
What relief, if any, still survives
While shutting the door on refund, the Tribunal clarified that the buyer is not left remediless. If aggrieved by delayed possession, the allottee may still:
- Approach MahaRERA separately for interest on delayed possession
- Seek compensation, if legally justified
However, refund and project exit are no longer available remedies once possession is taken.
Why this ruling matters for homebuyers
The order reinforces a critical principle under RERA:
👉 Possession is the legal point of no return.
RERA is designed to ensure timely delivery and accountability—not to function as a post-possession exit or buy-back mechanism. Change of mind, financial stress, or loss of investment appetite cannot be grounds for refund once possession is accepted.
For homebuyers, the message is clear:
Decisions on exit must be taken before possession—after that, RERA’s “no return policy” applies.
