'Homebuyers Need Not Wait For OC To Get Refund From Delayed Housing Project': Bombay HC

Mumbai, September 29, 2026: The Bombay High Court has held that homebuyers who opt out of a delayed housing project cannot be made to wait for a refund until the developer obtains an Occupation Certificate (OC), observing that their right to get back the money paid with interest is “absolute and unqualified”.

Justice Sandeep Marne made the observation while dismissing an appeal filed by Sanklecha Constructions Pvt. Ltd. and its directors against orders directing them to refund money paid by two homebuyers for the Waterways project in Nashik.

Homebuyers Seek Refund Over Delay

The homebuyers had booked flats for Rs 43.13 lakh and paid Rs 22.58 lakh to the developer. Their Agreement for Sale was executed on May 16, 2016, with possession promised by December 31, 2017.

As the project was not completed within the agreed timeline, the buyers approached the Maharashtra Real Estate Regulatory Authority (MahaRERA) in 2019 and sought to withdraw from the project and receive a refund.

MahaRERA allowed their plea in August 2021 and directed the developer to refund the amount with interest from January 1, 2018, at the rate prescribed under Rule 18 of the Maharashtra RERA Rules. However, it permitted the developer to make the payment after obtaining the OC, while allowing it to pay earlier if it wished.

Appellate Tribunal Removes Concession

The buyers challenged this concession before the Maharashtra Real Estate Appellate Tribunal. In November 2023, the tribunal removed the concession and directed the developer to make the refund.

Before the High Court, the developer argued that it had made genuine efforts to complete the project and that an immediate refund would affect the project's cash flow and prejudice other homebuyers. Its advocate submitted that two of the five buildings were 95% complete, another was 85% complete and Building C-1 was 70% complete.

The buyers' counsel argued that once they exercised their right to withdraw, the developer could not postpone repayment until the OC was obtained.

Court Upholds Refund Right

Justice Marne agreed, holding that Section 18(1) of the Real Estate (Regulation and Development) Act (RERA) does not give the promoter discretion over when the refund should be made.

“Once the promoter fails to complete the project or is unable to give possession... allottee has a right to demand refund... and the promoter has an obligation to fulfil that demand,” the court said.

The court also distinguished between refund and compensation, observing that return of the amount paid with interest is the “bare minimum” an allottee is entitled to receive.

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“Thus, on plain reading of Section 18 of RERA... the right to seek return of amount with interest is absolute and unqualified,” Justice Marne held.

The court said genuine efforts to complete a project or concerns about its cash flow cannot be used to postpone a refund. It accordingly upheld the direction to refund Rs 22.58 lakh with interest from January 1, 2018, and dismissed the appeal.

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