Promoter Cannot Delay Refund Till OC – Scope of 18 RERA Clarified
Judgment dated 28.9.2026 of the High Court of Bombay in Second Appeal (Stamp) No.8825 of 2025 of Sanklecha Constructions Pvt Ltd and others Vs. Nitin Madhukar Shewale and others with connected second appeal.
Section 48 of RERA –
MahaRER passed order and permitted the allottees to withdraw from the project and for refund of entire amount with interest. However, it had allowed the promoters to refund the amount after obtaining occupancy certificate.
REAT, however, directed the refund with interest within 23 days.
The Appeal involves the Appellants-Promoters being aggrieved by the ultimate direction for refund of the entire amount to the allottees along with interest thereon with effect from 1 January 2018. Since the ultimate direction contemplates immediate return of amounts with interest to the allottees and since option of returning the amount at the time of securing OC is deleted, the Appellants have filed the present Appeal.
It must be observed at the very outset that the Appellate Tribunal has rather passed confusing orders posing challenge to comprehend the same. Initially, MahaRERA had granted option to the promoter to refund the paid consideration to the allottee along with interest after securing OC for the project. By the main judgment and order dated 7 November 2023, the Appellate Tribunal withdrew that option by directing deletion of portion of direction from MahaRERA’s Order and directed that the promoter must refund the paid consideration with interest from the dates of receipt of payments within 23 days of the Order. The main Order is later reviewed by the Appellate Tribunal deleting the direction for payment of interest from the date of receipt of payments. Thus, the net effect of the Order passed by MahaRERA as modified twice by the Appellate Tribunal is that the promoter needs to ‘forthwith’ refund the paid consideration with interest w.e.f. 1 January 2018.
Whether the obligation for the Promoter to return to the allottee the amount received by him with interest on demand made by the allottee under Section 18(1) of the Real Estate (Regulation and Development) Act, 2016 (RERA Act) is absolute and unqualified or whether the Real Estate Regulatory Authority and/or the Appellate Tribunal has discretion to take into consideration any mitigating circumstances or genuine efforts made by the Promoter in completing the project in time for the purpose of claiming any relaxation either in respect of period of interest or rate of interest or the date on which the refund is to be made?
Whether it is permissible for the Real Estate Regulatory Authority and/or the Appellate Tribunal to direct that return of the amount with interest shall be only after securing occupation certificate of the project and not upon demand by the allottee under provisions of Section 18(1) of the RERA Act?
HELD that on plain reading of Section 18 of RERA, in my view, the right to seek return of amount with interest is absolute and unqualified. The right cannot be diluted by the Regulatory Authority or by the Appellate Authority or even by the High Court by giving any concession to the promoter to return the amount only after securing OC for the project.
The obligation of a promoter to return to the allottee the amount received by him with interest on demand made by the allottee under Section 18(1) of RERA is absolute and unqualified. The Regulatory Authority and/or the Appellate Tribunal does not have discretion to take into consideration any mitigating circumstances or genuine efforts made by the promoter in completing the project in time for the purpose of granting any relaxation, either in respect of the period during which interest is payable, or in the rate of interest or the date on which refund is to be made.
It is impermissible for the Regulatory Authority and/or the Appellate Tribunal to direct that return of amount with interest shall only be after securing Occupation Certificate of the project and not upon demand made by the allottee under Section 18(1) of RERA.
