Soft possession without OC is not lawful possession: MahaREAT rules in favour of homebuyer

In a significant pro-homebuyer ruling, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has clarified that “soft possession” or “fit-out possession” handed over by a developer without an Occupation Certificate (OC) does not qualify as lawful possession under the Real Estate (Regulation and Development) Act, 2016 (RERA). This means homebuyers can still claim interest for delay in possession even if they have taken physical access to the flat for interiors or partial use.

The judgement was delivered on 23 June 2025 in Appeal No. AT005000000235139 of 2024 (Lalit Rade vs. Atul Ratnakar Mahashabde), overturning an earlier dismissal by the Maharashtra Real Estate Regulatory Authority (MahaRERA).

Case Background and Facts

Homebuyer Lalit Rade booked a flat (No. 925, carpet area ≈513.46 sq.ft.) in the project “Tropica Phase-II” (MahaRERA Registration No. P2100008711, Pune), developed by Omkar Developers (with Atul Ratnakar Mahashabde as partner).
The registered Agreement for Sale was executed on 9 March 2017, promising possession within 30 months + 6 months grace period (due date: effectively 6/9 September 2019).
The buyer paid the full consideration of ₹36,94,150/- plus ₹2,83,428/- GST.
The developer failed to deliver possession by the agreed date and had not obtained the OC even years later.
In 2022, the buyer filed a complaint before MahaRERA seeking possession with OC, amenities, and interest for delay under Section 18 of RERA.

MahaRERA’s Impugned Order (19 April 2024) MahaRERA dismissed the complaint, reasoning:

“Soft possession” was allegedly given on 23 September 2023 via conciliation.
Interest claim was an “afterthought” since possession was taken.
No cause of action survived under Section 18 for possession.
Amenity/defect issues were premature without OC.

MahaREAT’s Landmark Ruling The Tribunal (Coram: Justice S.S. Shinde, Chairperson, and Member Shrikant M. Deshpande) heard the appeal ex-parte (developer did not appear) and allowed it fully. Key holdings:

No successful conciliation existed — Records showed conciliation failed in 2019, and the matter was referred back for adjudication. The Authority wrongly assumed settlement and soft possession.
Soft/fit-out possession without OC is not lawful — Possession under RERA means handing over a completed, habitable flat with valid OC from the competent authority. Anything less (e.g., access for fit-outs while construction/approvals pending) does not discharge the developer’s obligation.
Right to interest under Section 18 is absolute and indefeasible — Citing Supreme Court judgements in Imperia Structures Ltd. vs. Anil Patni (2020) and Newtech Promoters vs. State of UP (2021), the Tribunal held that once delay occurs beyond the agreed date (and buyer is not at fault), interest is payable unconditionally till lawful possession with OC. Full payment by buyer and no fault on their part strengthen the claim.
Developer’s liability continues — The promoter remains bound to obtain OC and hand over lawful possession.

Directions Issued

Set aside the MahaRERA order of 19 April 2024.
Developer to pay interest on ₹36,94,150/- at SBI’s highest MCLR + 2%:
- From 7 September 2019 till 23 June 2025 — payable within 30 days.
- If delayed, further interest on outstanding amount (as on 23 July 2025) till realization.
- Continuing interest at same rate from date of order till OC is obtained.
Developer to obtain OC and hand over lawful possession with OC.
Parties bear own costs.

Why This Matters for Homebuyers This ruling reinforces that developers cannot use “soft possession” as a tactic to escape interest liability for years-long delays. Homebuyers should: