Imp. Rulings - Allottee’s Right to withdraw from project under RERA.

  Imp. Rulings - Allottee’s Right to withdraw from project under RERA.

Index;

1. HC Bombay (2025.07.18) in Linker Shelter Pvt. Ltd. Vs. Charmaine Chougule & Ors. [2025:BHC-AS:30212, Second Appeal No.. 391 of 2025 With Interim Application No. 10454 OF 2024]

2. SCI (2020.11.02) in M/s. Imperia Structures Ltd. Vs Anil Patni And Anr. [Civil Appeal No. 3581-3590 of 2020]

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i). HC Bombay (2025.07.18) in Linker Shelter Pvt. Ltd. Vs. Charmaine Chougule & Ors. [2025:BHC-AS:30212, SECOND APPEAL NO. 391 OF 2025 WITH INTERIM APPLICATION NO. 10454 OF 2024] held that;

• 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". 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.

• The unqualified right of the allottee to seek refund referred under Section 18(1)(a) and Section 19(4) of the Act is not dependent on any contingencies or stipulations thereof. It appears that the legislature has consciously provided this right of refund on demand as an unconditional absolute right to the allottee, if the promoter fails to give possession of the apartment, plot or building within the time stipulated under the terms of the agreement regardless of unforeseen events or stay orders of the court/tribunal, which is in either way not attributable to the allottee/homebuyer, the promoter is under an obligation to refund the amount on demand with interest at the rate prescribed by the State Government including compensation in the manner provided under the Act with the proviso that if the allottee does not wish to withdraw from the project, he shall be entitled for interest for the period of delay till handing over possession at the rate prescribed."

• The proviso to section 12 provides that if the person affected by any incorrect false statement intends to withdraw from the proposed project, he shall be entitled to return of his entire investment along with interest at such rate as may be prescribed and compensation in the manner provided under the said Act.

• The case of an allottee where he or she wants to claim compensation for loss caused 'due to defective title of the land' covers the aspect of litigation about title of the land. This is specifically provided under section 18(2) of the said Act and it cannot be included or confused with the remedy provided under section 18(1) or the proviso thereto.

•  It is therefore clear that in cases where the promoter/developer fails to complete or is unable to give possession of premises by the date specified in the agreement, the liability of the developer depends on the decision taken by the allottee whether to withdraw from the project or continue therewith as provided under section 18(1)(a) & (b) and the proviso.

• Therefore I hold that the allottee under section 18(1) of the said Act can not indefinitely postpone the decision about withdrawing from the project or continuing therewith beyond a period of 2 months from the date of possession being offered alongwith OC / CC as the case may be, provided there is no injunction against the developer from doing so.

• There is no indication that pendency of litigation is fatal to the offer of possession by the promoter as long as the competent planning authority has issued the OC/CC (as the case may be) and there is no order of injunction restraining the promoter from doing so. No such prohibition is either pointed out or seen in the scheme of the said Act.

• Therefore in my view, the possession offered by the developer can not be compulsorily meant as only without any litigation over the subject property; of course it has to be offered with OC / CC (as the case may be) duly obtained from competent planning authority and there has to be no order of injunction restraining the developer from doing so.

• When the allottees were under duty to take possession of the flat within a period of 2 months of OC issued to the said premises, it cannot be said that despite possession being offered, the allottees can wait indefinitely and decide on some day of their choice to demand refund. Therefore it has to be held that the Appellant developer will be liable to refund with interest till end of 2 months from the date when possession was offered with OC (21.12.2018).

• The Appellant Developer is directed to refund to the Respondents the respective amounts paid by Respondents (including amounts of taxes, registration fees and other statutory payments) with interest (at the rate of highest marginal cost of lending rate of State Bank of India plus 2%) from date of receipt of payments till 21.02.2019. This amount is to be paid within a period of 4 weeks from today. Charge of these amounts will continue on the respective flats, till payment is fully made.

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ii). SCI (2020.11.02) in M/s. Imperia Structures Ltd. Vs Anil Patni And Anr. [Civil Appeal No. 3581-3590 of 2020] held that;

• It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.

• 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”. 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.

• Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERA Act.

• It is relevant to note that even for the purposes of Section 18, the period has to be reckoned in terms of the agreement and not the registration.

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