Judgment Affirms Allottees' Unqualified Right to Immediate Refund, Dismissing Promoters' Appeal for Deferred Payment
In a significant ruling, the Bombay High Court has reinforced the absolute and unqualified right of allottees to demand a refund with interest under Section 18(1) of the Real Estate (Regulation and Development) Act, 2016 (RERA), affirming the decision of the Maharashtra Real Estate Appellate Tribunal. The judgment, delivered by Justice Sandeep V. Marne, rejected the appeal by Sanklecha Constructions Pvt. Ltd. and its directors, who sought to defer the refund until after obtaining the Occupation Certificate for their delayed project.
The case revolved around the delayed possession of flats in the "Waterways" project in Nashik, with allottees Nitin Madhukar Shewale and others demanding refunds due to non-completion within the stipulated timeline. Despite the promoters' arguments citing mitigating circumstances, the court held that the obligation to refund the amount with interest is immediate upon demand, as enshrined in RERA.
Justice Marne referred extensively to the Supreme Court's decision in Newtech Promoters, emphasizing that the right to refund is unconditional and not contingent upon any mitigating factors or efforts by the promoter. The court dismissed the promoters' plea for discretion to defer payments, reiterating that RERA's provisions are designed to protect the interests of homebuyers and ensure timely restitution.
The ruling clarifies that neither the Regulatory Authority nor the Appellate Tribunal has the discretion to alter the timeline for refunds based on the promoter's situation, underscoring the priority and immediacy of the allottees' rights. This judgment is expected to have far-reaching implications for real estate transactions, reinforcing the protection of buyers under RERA.
Bottom Line :
RERA - Section 18(1) - Allottee's right to seek refund of amount paid with interest on demand is absolute and unqualified - Regulatory Authority and Appellate Tribunal cannot grant relaxation to promoter on basis of mitigating circumstances, genuine efforts, or by postponing refund till obtaining Occupation Certificate - Observations of Supreme Court in Newtech Promoters are binding ratio and not obiter.
Statutory provision(s): Real Estate (Regulation and Development) Act, 2016 Section 18(1), Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rate of Interest and Disclosures on Website) Rules, 2017 Rule 18
Sanklecha Constructions Pvt. Ltd. v. Nitin Madhukar Shewale, (Bombay) : Law Finder Doc id # 2987538
