Q. I had booked a 2 BHK flat with a total price of `1.45 crores. As of date, I have paid the developer ₹1 crore, including stamp duty, registration and GST. My agreement for sale dated December 9, 2021, gives the possession date as December 31, 2024, with a further grace period of one year, i.e., up to December 31, 2025. MahaRERA has extended the project completion date to December 31, 2026. Looking at the progress of the work on site, I do not think the developer will be able to give possession even by December 2026. In such a scenario, if I want to cancel the booking, can I do so now or do I have to wait till December 31, 2026? My builder says that if I cancel the booking now, I should forget about interest because MahaRERA has extended the project completion date. If I am entitled to interest for delay, from what date will I get the interest? Will the interest be restricted only to the delayed period or will it be calculated from the dates I made the payments? Additionally, can I also claim from the developer the refund of amounts paid by me towards stamp duty, registration and GST with interest? – Avinash Kulkarni, Kanjur Marg
A. The provisions of RERA under Section 18 clearly state the homebuyer’s right to claim a refund with interest and compensation if the developer “fails to complete or is unable to give possession in accordance with the terms of the agreement for sale.” As per your agreement for sale, the developer promised possession by December 31, 2024. Even after considering the oneyear grace period, the possession deadline expired on December 31, 2025. Therefore, notwithstanding MahaRERA’s extension of the project completion date to December 31, 2026, you can cancel the booking now and claim a refund with interest and compensation.
You do not have to wait until the extended date given by MahaRERA, because such an extension does not alter the terms of the agreement for sale between you and the developer. The possession date mentioned in the agreement remains unaffected by the extension granted by the MahaRERA Authority. In this situation, the developer is legally bound to refund the entire amount paid by you along with interest as prescribed under MahaRERA rules (the highest MCLR rate plus 2%). If cancellation is due to delay, the interest must be calculated from the respective dates of each payment made by the homebuyer until the date the refund is made.
This is clarified in the definition of “interest” under Section 2(za) of RERA. Importantly, when a homebuyer exits due to delay, the interest is not limited to the period of delay but is calculated from the date of each payment made. You also asked whether you can claim a refund of the amounts paid towards stamp duty, registration and GST, along with interest. In several cases, the MahaRERA authority has declined such claims. However, the Maharashtra Real Estate Appellate Tribunal (MREAT) has set aside such orders and allowed homebuyers to claim refunds of stamp duty, registration and GST from the developer, along with interest.
In the MREAT order dated June 14, 2023, in Kunal Kumbhat & Anr. v/s Krishna Developers, the Tribunal specifically observed: “Sec 18 of RERA provides for an unconditional and unqualified right to complainants for refund, and the promoter has a bounden duty, inter alia, to refund the entire paid amounts including statutory payments for taxes, fees, etc., with interest from the date of receipt of these payments.” Accordingly, in your case, you can cancel the booking even now and demand a full refund of the amounts paid by you, including stamp duty, registration fees and GST, along with interest. You are also entitled to claim compensation from the developer for losses suffered due to the delay.
The questions are answered by Adv. Shirish V. Deshpande, Chairman – Mumbai Grahak Panchayat.
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