Maharashtra Tribunal Orders Developer to Refund Homebuyers for Delayed Possession

The Maharashtra Real Estate Appellate Tribunal (MREAT) has ruled in favor of two homebuyers, directing Mumbai-based Ekta Parksville Homes Pvt Ltd, a part of Ekta World, to refund the amount paid for a flat in Vasai, near Mumbai. The refund includes interest from the date of payment, along with stamp duty, registration fees, pre-EMI, and home loan settlement charges. The tribunal’s decision comes after a prolonged legal battle where the homebuyers sought compensation for delayed possession.

Two homebuyers, Hemal Mehta and Shibani Mehta, booked an apartment in Ekta Parksville for ₹32.17 lakh. The agreement for sale was executed on December 2, 2014, with the promised possession date set for December 2016. The buyers paid ₹11 lakh, while HDFC Bank disbursed ₹23 lakh to the developer as part of a 20:80 subvention scheme, under which the developer was responsible for pre-EMI payments until possession. However, the possession was delayed, leading the homebuyers to seek a full refund.

Homebuyers First Approached MahaRERA

Due to the delay in possession, the homebuyers initially filed a complaint with the Maharashtra Real Estate Regulatory Authority (MahaRERA), requesting a refund with interest. The developer appeared before MahaRERA and argued that the homebuyers had opted for the subvention scheme, and they had only directly paid ₹8.43 lakh. The developer also claimed that fit-out possession was offered in February 2019 and that homebuyers should have accepted it.

HDFC Bank also intervened in the case, stating that it had sanctioned a home loan of ₹27 lakh, out of which ₹23.80 lakh had already been disbursed to the developer at the homebuyers’ request. The bank argued that both the homebuyers and the developer should be held responsible for settling the outstanding loan amount and the interest accrued.

After reviewing the case, MahaRERA passed an order on August 9, 2021, directing the developer to refund the amount to the homebuyers with interest from January 1, 2017, until the date of full repayment.

Homebuyers Challenge MahaRERA Order at MREAT

Dissatisfied with the MahaRERA decision, the homebuyers approached MREAT, requesting a full refund, including equated monthly installments (EMIs) paid to HDFC Bank, stamp duty, registration fees, brokerage, and other charges related to the loan approval process. The buyers submitted that the total cost of the flat was ₹32.17 lakh, but additional payments, including ₹1.93 lakh for stamp duty, ₹30,000 for registration fees, ₹33,024 for MVAT, and ₹1.69 lakh for possession charges, increased their total expenditure to ₹36.42 lakh.

The homebuyers further stated that under the 20:80 subvention scheme, a tripartite agreement was executed between the homebuyers, developer, and HDFC Bank, wherein the developer was responsible for pre-EMI payments until possession was handed over. However, the developer failed to make these payments, forcing the homebuyers to pay six months of pre-EMI interest out of pocket.

Developer Defends Delayed Possession

The developer contested the claims, stating that possession was delayed due to factors beyond their control (force majeure). The reasons cited included:

• Delays in land subdivision for roads, reservations, and internal infrastructure.
• Stop-work notices issued by the municipal corporation.
• Court orders affecting the project’s progress.
• Delays in obtaining necessary approvals.
• COVID-19 lockdown restrictions.

The developer also maintained that pre-EMI payments were required only until fit-out possession was offered in February 2019. Additionally, they pointed out that the project received its occupation certificate (OC) in July 2023 and was now ready for handover. The developer argued that the homebuyers were investors rather than genuine allottees, and their demand for a refund was unjustified.

Maharashtra Tribunal’s Final Verdict

After reviewing the arguments from all parties, MREAT ruled in favor of the homebuyers, stating that they were entitled to a full refund with interest and compensation for the developer’s failure to meet contractual obligations. The tribunal emphasized that the homebuyers were forced to seek legal remedies due to the developer’s failure to honor the sale agreement and possession timeline.

The tribunal’s order directed the developer to:

• Refund the entire amount paid by the homebuyers.
• Reimburse the actual amounts paid towards stamp duty, registration fees, MVAT, and other statutory charges.
• Cover the incidental expenses incurred by the homebuyers.
• Reimburse the loan settlement amount and pre-EMI payments made to HDFC Bank.
• Pay interest on the refunded amount from the date of receipt until full repayment.

The MREAT judgment, also mandated that the developer must complete the refund process within 41 days from the date of the order.

Advocate Nilesh Gala, who represented the homebuyers along with Advocate Manish Gala, stated that the ruling would set a precedent for similar cases involving delayed possession. He highlighted that in this case, the developer had promised possession in 2017, but the occupation certificate was granted only in 2023, leading to an almost decade-long wait for the homebuyers.

This decision is expected to have a significant impact on similar disputes in Maharashtra, as homebuyers facing delays in possession may now refer to this ruling to strengthen their claims. The real estate sector in Mumbai has seen several project delays, and regulatory bodies like MahaRERA and MREAT are now taking a stricter stance to protect homebuyers’ rights.

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