Section 18 of RERA – Can home buyer withdraw from the project after OC
There are total 110 residential and 14 commercial tenants in the building redeveloped. The Respondent no.3 could not complete the construction but applied for part occupancy certificate of certain portions. It was rejected on 17.4.2017. However, commercial structures were constructed on the ground floor and permitted to be occupied without occupancy certificate.
No action on such illegal occupancy was taken for more than about ten years. Not only that but water and electricity supply was given. Full fledge business is undertaken. No notice to such illegal occupants is given
In that context, the High Court directed the Municipal Commissioner to form “appropriate teams” ward wise to inspect the structures which are unauthorized and occupied without occupancy certificates, before things go completely out of hand.
Judgment dated 18.7.2025 of the Bombay High Court in Second Appeal NO.391 of 2025 of Linker Shelter Pvt Ltd Vs. Charmaine Chougule and another with connected matters.
The appellant is the Developer and the Respondents – complainants are allottees of four flats in the project at Nashik.
In this case, two questions arose for consideration – whether the allottee has unqualified right under Section 18 of the RERA Act to withdraw from the project at any time at his own will and when possession with OC is already offered. Secondly, whether the possession with OC offered by the developer under Section 19(1) should be without any litigation on the property.
In 2013, there was agreement of flats with possession date of 31.12.2017.
Some time in 2013, an ex parte injunction was passed by the Court against the developer in the litigation filed by third party. The developments in the litigation were informed to the allottees.
On 16.2.2016, the Developer informed the allottees that the Court had come in its favour.
On 11.7.2018, Occupancy Certificate for the building was obtained.
On 21.12.2018 and 1.9.2019, the allottees were informed to take possession.
On 18.2.2020, the allottees demanded refund of paid amounts on the ground that the title of the building land is defective.
On 17.2.2022, the RERA complaints were dismissed keeping open compensation claim open.
However, the appeals were allowed and the development was directed to refund all the amounts including taxes, registration fees, etc with interest.
In that context, the question was answered that the choice to the allottee either to withdraw or continue with the project on the ground “defective title of the land” is not available under sub-section (1) of Section 18 but it can be independently raised under sub-section (2) of Section 18 of the Act.
It was HELD that the allottee is duty bound to take possession in two months from the occupancy certificate as per mandate of Section 19(10) and cannot postpone decision either to withdraw or continue with the project beyond two months period.
Whether existence of litigation vitiates the offer of possession by the Developer with the occupancy certificate. The Developer under the RERA Act can inform about litigation in the format provided under Circular NO.28 of 2021. There is no indication that pendency of litigation is fatal to the offer of possession by the promoter so long as the planning authority has issued OC and there is no injunction order against the promoter.
Therefore, it cannot be said that the allottees can wait indefinitely and decide on some day of their choice to demand refund.
