Project Delay | Bombay HC Explains RERA Rules for Refund of Booking Amount in Maharashtra

Bombay High Court has ruled that a promoter's obligation to refund a homebuyer's investment with interest upon demand is absolute and unqualified, leaving no room for judicial or regulatory discretion to delay payments based on project progress. The Bench held that even genuine efforts by developers to complete a project cannot dilute the statutory mandate of immediate restitution under the Real Estate (Regulation and Development) Act, 2016 once a possession deadline is breached.

Justice Sandeep V. Marne presided over the matter, which arose from an appeal by a developer aggrieved by a direction to immediately refund an allottee. The Bombay High Court was tasked with determining whether the Real Estate Regulatory Authority (MahaRERA) or the Appellate Tribunal possesses the discretion to mold reliefs by allowing developers to refund amounts only after securing an Occupation Certificate (OC), particularly when mitigating circumstances for delay exist.

Court Rejects Deferment of Refund Until Occupation Certificate

The dispute originated from a project in Nashik where the promoter failed to deliver possession by the agreed date of December 31, 2017. While MahaRERA initially allowed the allottees to withdraw, it granted the promoter an option to refund the amount only after obtaining the OC, citing the need to protect the project's financial flow for other buyers. The Appellate Tribunal later withdrew this option, prompting the developer to challenge the decision before the High Court.

The Bombay High Court scrutinized the interplay between Section 18 of Real Estate (Regulation and Development) Act, 2016 and judicial precedents. The Bench observed that the promoter’s obligation is triggered the moment they fail to give possession in accordance with the agreement for sale. It further added that "A plain reading of Section 18(1) of RERA would indicate that promoter has an obligation to return the amount received by him alongwith interest on demand by the allottee. Section 18(1) of RERA does not leave any option or discretion about the timeline at which refund is to be made... In that sense, there is an unqualified right created in favour of the allottee to seek the refund."

Interpretation of 'On Demand' and Judicial Precedents

The Appellants argued that the Supreme Court's observations in Newtech Promoters and Developers Private Limited vs. State of U.P. & Ors. Etc. were obiter dicta and that the Bombay High Court's earlier ruling in Neelkamal Realtors Suburban Pvt. Ltd. and Anr. vs. Union of India and Ors. allowed for molding relief in genuine cases. The Bombay High Court rejected this, clarifying that Newtech Promoters and Developers Private Limited vs. State of U.P. & Ors. Etc. explicitly interpreted the expression "on demand" to signify priority, immediacy, and expediency.

The Bombay High Court further clarified the scope of Neelkamal Realtors Suburban Pvt. Ltd. and Anr. vs. Union of India and Ors., stating that while the conduct of a developer might be relevant for "compensation" (damages), it cannot be used to withhold the "return of amount" (restitution). The Court clarified that  “Return of amount received by the promoter from the allottee together with interest is the bare minimum which the promoter must perform in every case, including a case where the promoter has made genuine efforts to complete the project within the agreed timeline.”

Background

The appellants, Sanklecha Constructions Pvt. Ltd., had entered into an agreement for sale in May 2016 for a flat in their 'Waterways' project. Despite receiving over Rs. 22 lakhs, they failed to deliver possession by the end of 2017. The allottees filed a complaint under Section 31 of Real Estate (Regulation and Development) Act, 2016. While MahaRERA recognized the delay, it attempted to balance interests by allowing the developer to defer the refund until the project's completion. The allottees appealed this deferment to the Maharashtra Real Estate Appellate Tribunal, which modified the order to require an immediate refund. The Bombay High Court upheld the Tribunal's modification, ruling that the law does not permit such financial leeway at the expense of the homebuyer's statutory right to exit.

Case Details:
Case No.: SECOND APPEAL (STAMP) NO.8825 OF 2025
Neutral Citation: 2026:BHC-AS:39337
Case Title: Sanklecha Constructions Pvt. Ltd. & Ors. V/S Nitin Madhukar Shewale & Ors.
Appearances:
For the Petitioner(s): Mr. Abhishek Pungaliya, Advocate
For the Respondent(s): Mr. Akshay R. Kapadia, Advocate for Respondent Nos. 1 and 2

Source: 2026 CaseBase(BOM) 6497