'Homebuyers Cannot Be Made To Wait Indefinitely For Relief': Bombay HC In RERA Refund Case

Mumbai, March 31: Reinforcing that homebuyers cannot be made to wait indefinitely for relief, the Bombay High Court has held that an allottee cannot be deprived of refund amounts merely because a developer has filed an appeal.

HC upholds tribunal order

Justice N.J. Jamadar on Monday dismissed appeals filed by Rare Townships Private Limited and upheld the Maharashtra Real Estate Appellate Tribunal’s order allowing allottee Mitul Gada to withdraw the amount deposited by the developer, subject to an undertaking to return it with interest if the developer succeeds.

Details of the dispute

Gada had booked two flats in a project, North Sea Heights (A1), 19th floor, in 2015. Agreements for sale were executed on November 2, 2015, with possession promised by December 31, 2018. For the flats worth over Rs 1.60 crore and over Rs 1.56 crore, Gada had paid Rs 98.92 lakh and Rs 69.66 lakh respectively.

However, the project failed to progress, and the flats were not delivered within the stipulated time.

MahaRERA directs refund

After receiving no response to legal notices, Gada approached the Maharashtra Real Estate Regulatory Authority (MahaRERA) seeking a refund with interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016.

Following earlier rounds of litigation, MahaRERA, by an order dated September 9, 2025, directed the promoter to refund the entire amount paid by the allottee along with interest.

Developer challenges, tribunal allows withdrawal

The developer challenged this order before the Appellate Tribunal and sought a stay. While granting partial relief, the tribunal allowed Gada to withdraw the deposited amount. The developer challenged this before the HC.

Advocate for the developer argued that permitting withdrawal during the pendency of the appeal effectively prejudged the case and would render the appeals infructuous. It was contended that Section 43(5) of RERA only allows securing the amount and does not empower the tribunal to release it.

HC rejects developer’s arguments

Opposing this, Gada’s advocate argued that the order was consistent with earlier HC directions and emphasised the prolonged financial burden faced by the buyer.

The HC agreed with the allottee and clarified that the pre-deposit requirement under Section 43(5) is a condition for “entertainability” of an appeal and cannot be equated with a stay on execution of the impugned order.

“The pre-deposit under Section 43(5) cannot be equated with the condition for stay to the execution and operation of the order,” the court observed.

Relief for homebuyer after long delay

It further held that the Appellate Tribunal is not “completely denuded of the power” to release deposited amounts during the pendency of appeals, though such discretion must depend on the facts of each case.

Highlighting the facts, the court noted that over 11 years had passed since the agreements were executed and more than seven years since the promised possession date, with the allottee having paid substantial amounts.

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“In a situation of the present nature, it is no solace to an allottee that the amount… is secured and kept in a deposit,” the court said, adding that release of funds helps alleviate financial strain and mental anguish.

Holding that the tribunal had exercised its discretion judiciously and that no substantial question of law arose, the HC dismissed the appeals with costs.

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