Bombay HC: a RERA home buyer's refund-with-interest right is absolute, whatever the builder's excuse

Deciding a second appeal under Section 58 of the Real Estate (Regulation and Development) Act, 2016 (RERA), the Bombay High Court upheld an order directing a builder, Sanklecha Constructions, to refund the entire amount paid by home buyers, with interest, because the promised occupation certificate for the project had still not been obtained. The builder argued that since the delay was partly for reasons beyond its control and it had made genuine efforts to finish the project, the Maharashtra Real Estate Appellate Tribunal should have relaxed the direction to pay interest immediately, letting refund follow only once an occupation certificate was secured.

Justice Sandeep V. Marne rejected this, holding that under Section 18(1) of RERA, an allottee's right to demand return of the amount paid, with interest, is 'absolute and unqualified': the regulator and the Appellate Tribunal have no discretion to postpone or soften this obligation based on a promoter's good faith or genuine efforts to complete the project, and refund cannot be made conditional on the promoter first obtaining an occupation certificate. The Court also held that the Supreme Court's observations to this effect in Newtech Promoters v. State of UP formed part of the binding ratio of that judgment, not mere obiter dicta, applying the 'inversion test' to tell the two apart.