Bombay HC Rules Flat Buyers Entitled to Monthly Interest for Delayed Possession Under RERA

In a ruling that sends a strong message to India's real estate developers, the Bombay High Court has upheld a homebuyer's right to receive monthly interest for delayed possession of a flat  firmly establishing that this right under RERA is unconditional, irrespective of what the builder's agreement says.

The judgment, delivered by Justice Madhav Jamdar on June 9, 2026, dismissed 10 appeals filed by Runwal Constructions challenging a 2018 order of the Maharashtra Real Estate Appellate Tribunal (MahaREAT). The tribunal had directed the developer to pay interest at 10.05% per annum from February 1, 2014, until actual possession is handed over to buyers of its Runwal Infinity (also known as Runwal Sanctuary) project in Nahur, Mulund, a project in Mumbai.

The Case: Nearly Two Decades of Waiting

The numbers in this case are staggering. Buyers had booked their flats in the Runwal Infinity project between 2005 and 2007, paying anywhere between ₹36.32 lakh and ₹60.75 lakh per unit. They were promised possession between 2008 and 2010.

By the time the High Court ruled, many of these buyers had been waiting for close to two decades with their money locked in, no home to show for it, and no adequate compensation from the developer. In at least one case, a buyer had paid the entire sale consideration and still had not received possession.

The Maharashtra Real Estate Appellate Tribunal had stepped in with its 2018 order, directing interest payments starting February 2014, notably, that was already four to six years after the contractual possession dates had passed, reflecting a balanced, not punitive, approach by the tribunal.

The developer challenged this order. The High Court has now conclusively shut that door.

What the Court Said: 3 Key Observations

1. Interest for delay is an "unqualified right"

Justice Jamdar made it categorically clear: under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA), a buyer's right to receive interest for delayed possession is an unqualified right. It cannot be watered down by any clause in a builder-buyer agreement, and it does not depend on any contingency.

This is significant. Many developers insert clauses in sale agreements attempting to limit or exclude liability for delays. The court has confirmed such clauses cannot override RERA's statutory protection.

2. Builders cannot hold money indefinitely

The court's most quotable line from the 230-page judgment was pointed: "The promoter cannot be permitted to hold the money paid by the allottees and postpone handing over possession endlessly."

This addresses a common pattern in delayed real estate projects where developers collect substantial payments, often 80–95% of the flat's cost, years before completion, only to delay possession without bearing any real financial consequence. The court has now firmly closed that loophole.

3. Tribunal's balanced order was not excessive

The developer argued that the tribunal's order was harsh. The court disagreed, noting that MahaREAT had actually exercised restraint, awarding interest only from February 2014, even though the contractual possession dates were 2008–2010. The developer had effectively received a six-year grace period before interest obligations kicked in. The court saw no grounds for further leniency.

Financial Penalties Imposed

Beyond upholding the interest order, the court also imposed costs on the developer:

• ₹1 lakh each in 2 of the 10 appeals

• ₹10,000 each in the remaining 8 appeals

• All costs payable within four weeks

The court also refused to stay its own judgment, citing the fact that buyers had already waited far beyond the promised possession dates. Any further delay in relief was deemed unjustifiable.

Why This Ruling Matters for Every Homebuyer in India

This is not just a Mumbai story. Delayed possession is arguably the most widespread grievance in Indian real estate. According to industry estimates, hundreds of thousands of homebuyers across the country are currently stuck in delayed projects, many registered under RERA.

Here is what this ruling practically means for buyers:

• If your developer has missed the possession date in the registered sale agreement, you are entitled to monthly interest on every rupee you have paid from the date of default to the date of actual possession.

• This right cannot be contractually waived by the developer.

• You can approach MahaRERA (or your state's RERA authority) to claim this interest even if you have already accepted possession, as a separate Bombay HC precedent from May 2026 affirmed.

• The interest rate is typically calculated at MCLR + 2%, or the rate specified in your state's RERA rules.

The Bigger Picture

The Runwal Infinity ruling is part of a broader judicial trend of strengthening RERA's enforcement teeth. Section 18 of the Act was designed to shift financial pain from buyers to developers in case of delay and courts are increasingly making sure that intent holds.

For the real estate sector, the message is equally clear: delay costs money, and that cost compounds monthly. Developers who continue to hold buyers' funds without delivering possession will face escalating financial liability, with courts increasingly disinclined to grant relief from tribunal orders.

For homebuyers, this is a moment of reassurance. The law is on your side and the courts are enforcing it.

Key Facts at a Glance