₹1.33 Crore Interest With Full Refund: Dubai Buyer Wins Property Dispute With Mumbai Builder

(MENAFN- Live Mint) The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has protected a Dubai-based buyer from an unfair contract. Justice SS Shinde and member Rajagopal Devara delivered the ruling, ordering a Mumbai builder to provide a full refund with interest, ET Wealth reported.

Mr Raghuwanshi booked two flats in Mumbai in 2015. The flats cost ₹2.35 crore and ₹3.17 crore. He paid around 20% towards each booking. These payments were ₹48.73 lakh and ₹66.56 lakh.

Both sides signed allotment letters, but no registered sale agreements followed. Possession was promised before April 2017. However, the builder obtained the occupancy certificate only in May 2018. The buyer also found differences between the agreed terms and the draft sale agreements, according to the publication.

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Raghuwanshi cancelled both bookings and requested his money with interest. The builder linked repayment to finding replacement buyers for the flats. It also relied upon Clause 12 within the allotment letters.

That clause allowed forfeiture of 10% of each purchase price. It also imposed a monthly interest of 1.5% until termination. These amounts could be deducted from the buyer's eventual refund. Meanwhile, the buyer received no matching compensation for the builder's delay.

Raghuwanshi challenged this arrangement before the Mumbai real estate authorities. MahaREAT decided his appeal on 1 July 2026. It rejected Clause 12 as arbitrary and unreasonable. According to the tribunal, it heavily favoured the builder.

The tribunal said that repayment could not depend indefinitely upon another future sale. Finding replacement purchasers remained entirely within the builder's control. The builder had already used Raghuwanshi's money for several years, it said.

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MahaREAT also found important statutory violations. The builder accepted substantial payments without executing registered sale agreements. This breached Section 4(1) of the Maharashtra Ownership of Flats Act, 1963.

The builder also failed to provide possession by the promised date. Therefore, Section 18 of RERA entitled the buyer to repayment with interest. Contractual clauses cannot defeat these statutory homebuyer protections.

MahaREAT ordered refunds of ₹48.73 lakh and ₹66.56 lakh. Interest applies from each payment date until final realisation. The rate equals SBI's highest marginal lending rate plus two percentage points.

According to ET Wealth, the original payments amount to nearly ₹1.15 crore. So, 10.5% yearly interest over 11 years produces about ₹1.33 crore. The actual amount depends upon applicable rates and payment dates.

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The ruling also reflects MahaRERA's model allotment letter. Its cancellation rules limit builder deductions according to timing.

Cancellations within 15 days permit no deduction. Requests between 16 and 30 days are subject to a 1% deduction. Requests between 31 and 60 days are subject to a 1.5% fee. Later cancellations permit a maximum 2% deduction.

The remaining balance should normally be returned within 45 days. Delayed repayment can attract prescribed interest. These safeguards prevent builders from withholding refunds through unequal standard contracts.

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