Imp. Rulings - Allottee’s Right of Interest for Delayed Possession in RERA
Index;
HC Bombay (2026.06.08) in Runwal Constructions Registered Partnership Firm Vs Bharat Shah [2026:BHC-AS:22794, Second Appeal No.251 Of 2022 With Civil Application No. 288 of 2019] [Delayed period interest mandatory]
REAT Punjab (2026.05.25) in Neeraj Verma & Anr. vs ATS Estates Pvt. Ltd.& Ors. [Complaint No. RERA/ GC No.0171 of 2023]
REAT Maharashtra (2026.04.27) in CCI Projects Private Limited v. Ramesh Shivsaran Singh & Ors. [Appeal Nos. AT006-53079 to 53179 of 2021 ] [ Waiver of Interest]
HC Bombay (2025.10.08) in Keyana Estate LLP (Earlier Known as Kiyana Ventures LLP) Vs. Paresh Parihar & Anr. [2025:BHC-AS:44637, Second Appeal No. 537 Of 2025 with Interim Application No. 11757 Of 2025]
UP-REAT (2025.04.01) in Smt. Sushma Shukla Vs. Lucknow Development Authority, [Appeal No.100 of 2019] [Waiver of delayed period interest]
UP-REAT (2025.04.01) in Sanjeev Aggarwal Vs. Greater Noida Industrial Development Authority [Appeal No.687 of 2022] [Allottee’s demand of interest]
REAT Mumbai (2025.02.24) in Pratibha Fabrics Limited Vs. Macrotech Developers Limited,. [APPEAL NO. AT006000000052817 Of 2021] [Claim after possession]
REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020]
REAT Mumbai (2024.08.21) in Spenta Builders Pvt. Ltd. Vs. Mr. Ashlesh Gosain .[(2024) ibclaw.in 115 REAT, Appeal No. AT00600000052402/20, Appeal No. AT00600000052942/21] [ Interest & compensation]
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i). HC Bombay (2026.06.08) in Runwal Constructions Registered Partnership Firm Vs Bharat Shah [2026:BHC-AS:22794, Second Appeal No.251 Of 2022 With Civil Application No. 288 of 2019] held that;-
The object and reasons of the said Act and the peculiar position of allottees as explained by the Supreme Court to the effect that the buyer borrows money to pay for a house and simultaneously plays the role of a financer as building projects collect money upfront and this puts the buyer in a very vulnerable position i.e. the weakest stakeholder with a high financial exposure clearly shows that the legislative intent to use "shall " in Section 18 of the said Act is to make the same mandatory.
Thus it is specifically held by the Supreme Court that the proviso to Section 18(1) contemplates the situation where the allottee does not intend to withdraw from the project, however, there is delay in handing over possession of the apartment. In that case, he is entitled to and must be paid interest for every month's delay till handing over the possession and it is the entire discretion of the allottee either to withdraw from the project and seek refund, interest and compensation or to continue with the project and seek interest for every month's delay in handing over possession.
In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made "without prejudice to any other remedy available to him".
Section 18 of the RERA gives unqualified statutory right to the allottees if there is delay in handing over possession by the promoter and if the allottee does not intend to withdraw from the project, he shall be paid every month's interest for delay in handing over possession as such rate as may be prescribed.
In this context, the Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd.(supra) in paragraphs 22 and 25 has expressly observed that the allottee has an unqualified right to claim interest under Section 18(1) of the RERA Act if the promoter fails to discharge his obligation in accordance with the terms and conditions of the agreement. This unqualified right is not dependent on any contingencies or stipulations and therefore the legislature has consciously provided this right of refund as an unconditional absolute right to the allottee if the promoter fails to give possession within the stipulated time regardless of unforeseen events or stay order of the Court which is in either way not attributable to the allottee.
Thus, it is clear that the doctrine of frustration comes into play when a contract becomes impossible of performance, after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Contract Act. However, the performance of a contract is never discharged merely because it may become onerous to one of the parties. It is settled legal position that this doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances.
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ii). REAT Punjab (2026.05.25) in Neeraj Verma & Anr. vs ATS Estates Pvt. Ltd.& Ors. [Complaint No. RERA/ GC No.0171 of 2023] held that;-
The right to claim interest on the period of delayed possession is an indefeasible and unqualified right given to an allottee by the statute which cannot be taken away or declined as has been observed by Hon’ble Supreme Court in its landmark decision in M/s. Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P. and others in Civil Appeal Nos. 6745-6749 of 2021.
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iii) REAT Maharashtra (2026.04.27) in CCI Projects Private Limited v. Ramesh Shivsaran Singh & Ors. [Appeal Nos. AT006-53079 to 53179 of 2021 ] held that;-
The substantive provisions of Section 18 (1) (a) of RERA Act, 2016 would prevail to provide interest and/or compensation on account of delay, rendering Section 55 of the Indian Contract Act ineffective.
Right conferred under Section 18 of RERA Act, 2016 to allottees is indefeasible. Section 18 of RERA Act itself is a notice to the promoter about the claim of allottees and therefore, merely because allottees have made payments to promoter towards consideration value even after unilateral change of dates of possession by the promoter that does not mean that allottees have waived their right to claim interest.
Therefore, we are of the considered view that there is no waiver and allottees are well within their right to claim interest for delay in possession in terms of Section 18 (1) (a) of RERA Act, 2016.”
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iv). HC Bombay (2025.10.08) in Keyana Estate LLP (Earlier Known as Kiyana Ventures LLP) Vs. Paresh Parihar & Anr. [2025:BHC-AS:44637, Second Appeal No. 537 Of 2025 with Interim Application No. 11757 Of 2025] held that;
in view of the decision of the Supreme Court in the case of M/s Newtech Promoters and Developers Pvt Ltd Vs State of U.P. & Ors,[ 2021 SCC OnLine SC 1044.] the allottee has an unqualified right to seek the interest on the delayed handing over the possession of the flat, as agreed.
A mere offer to deliver possession of the subject flat, without complying with the necessary conditions subject to which the O.C. has been issued, where those conditions bear upon the occupation of the subject flat as a habitable unit, cannot be considered as the compliance of the obligation of the promoter under the Act, 2016.
Section 270A of the MMC Act, inter alia provides that no person shall occupy or permit to be occupied, or use or permit to be used, any premises or part thereof until he has obtained a certificate from the Commissioner to the effect that there is adequate supply of water to the persons intending to occupy or use such premises.
In these circumstances, the Appellate Tribunal was justified in holding that the Appellant committed default in the delivery of the possession of the subject flat, even after the grant of O.C. At any rate, the grant of O.C. was also much beyond the agreed date of delivery of possession of the subject flat. A clear case of violation of the provisions of Section 18 of the Act, 2016 was made out.
The submission of Mr. Dave premised on the force majeure is required to be noted to be repelled as in view of the decision of the Supreme Court in the case of Newtech Promoters and Developers (Supra) such submission cannot be readily acceded to. Even otherwise, no case of unforeseen event resulting in delay has been made out.
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v). UP-REAT (2025.04.01) in Smt. Sushma Shukla Vs. Lucknow Development Authority, [Appeal No.100 of 2019] held that.
The allottee on booking/allotment of the unit, the document would bind the promoter to the declared date of completion. In the event no date is declared, in that event three years would be taken as the tentative completion date depending on facts and circumstances of each case vide, M/s. Fortune Infrastructure. Vs. Trevor D’lima and others: (2018) 5 SCC 442.
In the event, the date of completion of the project with U.P. RERA, being at variance with the declared date of completion would have no bearing on computation of the interest component on the deposits made by the allottee. The burden of interest, on the promoter begins to run from the date declared by the promoter to the appellant till handing over possession of the unit.
In the event, promoter declares a date subsequent to the earlier date of completion, it would mean and indicate that the project is delayed. Section 18 (1) of the Act would become operative leaving it open to the allottee to either continue in the delayed project or withdraw from the project.
It, therefore, follows that the declaration of a subsequent date of completion with RERA made by the promoter does not shift the liability and obligation mandated under Section 18 (1) of the Act, 2016.
The mandate of Section 18 (1) is absolute and unconditional casting upon the promoter a positive mandatory obligation to pay interest to the allottee who has continued in the project for the delay. The liability to pay interest by the promoter would start running from the initial date declared by the promoter. The promoter cannot recile/retract from his commitment declared to the allottee.
A mandatory statutory obligation is cast upon the promoter to pay the interest to such allottees. The expression employed by the legislature is, ‘shall be paid, by the promoter,’ to the allottee. Unlike the main provision, under the proviso allottee is not required to make a demand for the interest. In the event promoter fails to comply the mandatory obligation to pay the interest, the promotee exposes itself for penal consequences under Chapter VIII of Act, 2016.
Hence, settlement cannot override the rights and obligations created by statutes in favour of a party. The proviso to Section 18 (1) of the Act, 2016 casts upon the promoter a statutory obligation to pay interest for the delayed project creates a statutory right in favour of allottee to receive the amount towards interest.
Any agreement/settlement circumventing the statutory provision (proviso to Section 18 (1) of the Act, 2016, cannot contradict or circumvent the statutory requirements and the mandatory legal obligations that govern to protect the interest of the allottee.
The compromise or the contract must align with the statutory provisions and the terms of the contract cannot be interpreted in a manner that would contradict the statutory requirement of Act, 2016.
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vi). UP-REAT (2025.04.01) in Sanjeev Aggarwal Vs. Greater Noida Industrial Development Authority [Appeal No.687 of 2022] held that.
In view thereof, the offer of possession made by the respondent without obtaining completion certificate is not a legal and valid offer of possession of the unit. The appellant was justified in not accepting the physical possession of the unit as the respondent/promoter was at default. There is no concept in law/bye laws of the competent authority of issuing completion certificate (OC/CC) of a project from a retrospective date.
The offer of possession, execution of lease/sale deed and thereafter physical possession of the unit in habitable condition follows OC/CC and not other way round as per scheme of Act 2016.
That the declaration of a subsequent date of completion with RERA made by the promoter does not shift the liability and obligation mandated under Section 18 (1) of the Act, 2016 to a future date.
The mandate of Section 18(1) (proviso) is absolute and unconditional casting upon the promoter a positive mandatory obligation to pay interest to the allottee who has continued in the project for the delay. The liability to pay interest by the promoter would start running from the initial date of completion declared by the promoter to the allottee. The promoter cannot recile/retract from his commitment declared to the allottee.
Unlike the main provision, under the proviso, allottee is not required to make a demand for the interest. In the event promoter fails to comply the mandatory obligation to pay the interest, the promoter, in that event, exposes itself for penal consequences under Chapter VIII of Act, 2016.
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vii). REAT Mumbai (2025.02.24) in Pratibha Fabrics Limited Vs. Macrotech Developers Limited,. [APPEAL NO. AT006000000052817 Of 2021] held that;
It is the settled positions of law that the provisions of the Section 18 of the Act continue to be applicable even if the captioned complaints have been filed after taking possession of the respective subject flats.
Therefore, it is more than evident that the possession offer letter dated 14th January 2018 and the e-mail dated 06th June 20t7 had been prepared as one sided, without full disclosure of all relevant specific details and therefore, the possession letter is unreasonable, one sided and imbalanced.
A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 ® of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.
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viii). REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020] held that;
The issue of offering handing over possession prior to obtaining occupancy certificate was also examined by the Hon’ble Supreme Court in Civil Appeal Nos. 1232 and 1443-1444 of 2019 R.V. Prasannakumaar and ors. Vs. Mantri Castles Pvt. Ltd. and ors. decided on 11.02.2019 wherein it has been observed that possession cannot be handed over prior to obtaining occupancy certificate.
That as per the provisions of the U.P. Apartments Act, 2010 read with the provisions of Act, 2016 a Promoter is required to offer legal and habitable possession to the allottees only after obtaining OC/CC and ask for clearing dues by raising final demand.
The failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. Given the one-sided nature of the Apartment Buyer’s Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.
That the right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed and the
Proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession.
It is upto the allottee to proceed either under Section 18(1) or under proviso to Section 18(1).
If an allottee chooses to remain in the project and in case the allottee seeks refund then he is entitled for interest on the deposited amount and/or compensation in accordance with the provisions of the Act 2016, which in our considered view will be in accordance with the principles of equity as well.
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ix). REAT Mumbai (2024.08.21) in Spenta Builders Pvt. Ltd. Vs. Mr. Ashlesh Gosain .[(2024) ibclaw.in 115 REAT, Appeal No. AT00600000052402/20, Appeal No. AT00600000052942/21] held that;
If the Allottee chooses to continue in the project, he is entitled only interest on delayed possession and not compensation.
Explanation to Section 6 of RERA which clearly clarifies that" force majeure" shall mean case of war, flood, drought, fire, cyclone' earthquake or any other calamity caused by nature, affecting the regular development of real estate project.
Therefore, we are of the considered view that delay in granting permissions/ sanctions from various competent authorities, etc. as contended by the Promoter cannot be construed as "force majeure” The Promoter can neither expect Allottee to be aware of the likely delay nor can make Allottee bear the brunt of the failure on the part of Promoter act professionally by assessing the requisite date for possession'
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