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:

1. 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.
2. 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.
3. 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.
4. 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:

• Insist on possession only with valid OC and all amenities.
• Not accept soft possession if it risks waiving delay compensation claims.
• Approach RERA/MahaREAT promptly for interest even after partial access.

Such judgements strengthen buyer protections under RERA and deter incomplete handovers.

Also Read: What Is Carpet Area?

The post Soft possession without OC is not lawful possession: MahaREAT rules in favour of homebuyer appeared first on Square Feat India.

The Case Background: A Delayed Project in Vasai

The complainants, Sameer Khan and Falaknaz Shabbir Shaikh, booked Flat No. F-602 in the “RG-A, B, E, F” project (MahaRERA Registration No. P99000003885) located in Vasai, Palghar. The registered Agreement for Sale (AFS) was executed on July 1, 2016, for a total consideration of ₹18,90,000. The promoter committed to handing over possession by May 31, 2018, as per Clause 29 of the AFS and a confirmation letter to ICICI Bank, from which the buyers availed a 90% home loan.

Despite full payments (including VAT, Service Tax, legal charges, stamp duty, and registration), the project remained incomplete well beyond the deadline. The complainants filed the online complaint on July 14, 2024, under Section 31 of RERA, seeking interest and compensation for the delay under Section 18. They alleged illegal offers of possession in Wings A, B, and E without OC, unsafe site conditions (e.g., open lift shafts, tanker-supplied water, non-fire compliance), and unauthorized project extensions without allottee consent.

An amendment on April 15, 2025, added the co-allottee (Shaikh) and the firm Reliable Realtouch as a respondent, which was allowed unopposed on June 25, 2025.

Promoter’s Defenses: COVID, Partner’s Death, and “Fit-Out” Offers

The respondents, Salim Mehmood Khan (proprietor and partner) and Reliable Realtouch, contested the complaint as “defective and unauthorized.” They claimed possession was offered in March 2024, but the complainants refused it, demanding three parking spaces (against one per sanctioned plans). They cited external factors for delays:

• The sudden death of Managing Partner AliAsger Abid Bhanpurawala on March 4, 2017, disrupting finances and operations.
• COVID-19 pandemic halting construction from 2020 onward.
• Pending OC due to MHADA’s delay in allotting 36 flats via lottery – a statutory requirement for this redevelopment project on MHADA land.

The promoter asserted that 80% of flats in Wing F had been handed over as “fit-out possession,” and around 40 allottees had accepted it. They argued these were “extraordinary circumstances beyond control,” absolving them of liability.

In their rejoinder, the complainants denied lawful possession claims, highlighting the site’s uninhabitable state (e.g., ongoing construction in Wings C and D posing safety risks) and illegal GST/Service Tax charges. They relied on precedents like Jyoti K. Narang v. CCI Projects Pvt. Ltd. to argue strict promoter liability.

MahaRERA’s Key Finding: “Fit-Out Possession” is Invalid Without OC

In Paragraph 12 of the order, MahaRERA categorically stated: “Since the OC for the said project has not yet been obtained, the question of handing over possession (whether physical or otherwise) does not arise at all. Moreover, it is a settled legal position that ‘fit-out possession’ does not constitute valid or lawful possession in the eyes of law, as lawful possession can be delivered only upon receipt of the requisite statutory approvals, including the OC.”

This ruling dismisses the promoter’s shelter under “fit-out” offers, emphasizing that RERA mandates full compliance with building norms. The authority rejected allegations of buyer default for refusing such possession, reinforcing that allottees cannot be forced to accept incomplete or unsafe units.

Delay Liability and Interest Calculation Under Section 18

MahaRERA analyzed the delay under Section 18 of RERA, which entitles allottees to monthly interest (SBI MCLR + 2%) for delays if they choose to stay in the project. The AFS date (May 31, 2018) was undisputed, but the promoter’s excuses were scrutinized:

• COVID-19: Invalid for pre-2020 delays but entitled to MahaRERA’s moratorium benefits (Orders 13 and 14 of 2020–2021, excluding March 15, 2020–February 28, 2022).
• Partner’s Death: Not “force majeure”; an internal business risk.
• Even assuming force majeure, the pre-RERA AFS allowed only a 6-month extension under MOFA Section 8(b), pushing the deadline to November 30, 2018.

Thus, interest accrues from December 1, 2018, till the date of lawful possession with OC, on actual consideration paid (excluding taxes, stamp duty, etc.).

Rejection of Compensation and Rent Claims

The complainants’ demands for separate compensation and rent reimbursement were rejected (Para 21). MahaRERA clarified that Section 18 limits relief to interest for allottees opting to continue, with no provision for additional compensation or rent loss.

Deferred Payment and Set-Off: Balancing Buyer Rights with Project Viability

In a pragmatic move (Para 23), MahaRERA deferred interest payment until full OC is obtained, to prevent fund diversion that could stall the project (valid till December 2025). This aligns with RERA’s objectives under Sections 11, 14, 34, and 37 to ensure timely completion for all allottees.

Key directions (Para 24):

• Mutual set-off: Promoter can deduct outstanding dues (e.g., society charges) from interest at possession time.
• Equity safeguard: If interest exceeds dues, dues are waived immediately; no further demands.

This protects the project’s cash flow while ensuring buyers aren’t burdened further.

Broader Implications for Homebuyers and Developers

The order underscores RERA’s dual focus: protecting allottees from delays while incentivizing project completion. It warns promoters against using “fit-out” as a workaround and highlights the need for transparent extensions and OC timelines. For buyers in similar situations, it advises documenting payments and refusing invalid possession offers. With thousands of delayed projects in Maharashtra, this precedent could embolden more complaints, pushing for stricter compliance.

The complaint was partly allowed and disposed of, with no further hearings scheduled.

Also Read: MahaRERA Inaugurates the First batch of Real Estate Agents Training

The post “Fit-Out Possession” Declared Legally Invalid Without OC: MahaRERA Rules in Favor of Delayed Homebuyers appeared first on Square Feat India.