Mumbai: Observing that a builder and buyer cannot be placed on an equal footing since buyer is “generally very vulnerable”, the HC permitted a flat purchaser to withdraw an amount deposited by the builder, pending appeal in a dispute over a project delayed by over a decade. The HC on Monday ruled that the provisions of RERA do not preclude the appellate tribunal from exercising its discretion in a deserving case for releasing amounts deposited by a builder during pendency of his appeal. The discretion would depend on facts of each case, the HC clarified and set out general factors that would weigh in, including any dispute over the amounts paid by the buyer of which the refund is ordered due to delays in a project.The builder filed an appeal before the HC to challenge a RERA appellate tribunal order that permitted a buyer to withdraw from a deposit during the pendency of his appeal. The builder first filed an appeal against a Maharashtra Real Estate Regulatory Authority (MahaRERA) order of Sept 2025 that, on a complaint filed by the flat allottee Mitul Gada, allowed him to withdraw the pre-deposits made by the builder — Rare Townships Private Limited. The state RERA appellate tribunal, which required the builder to make a pre-deposit to hear his appeal, in Jan 2026 allowed the buyer to withdraw the amount and thus prompted the builder to rush to the HC. Gada in 2015 booked, for over Rs 3 crore, two flats on the 15th floors of a project called North Sea Heights (A1), which was being developed by Rare Townships. The delivery was due on Dec 31, 2018. He paid almost Rs 2 crore. Since possession was delayed, the buyer complained before MahaRERA and sought refund under Section 18 of RERA, with interest and compensation. In March 2021, MahaRERA ordered the refund with interest. On March 30, Justice N J Jamadar, sitting singly, observed, “it is no solace to an allottee that the amount ordered to be refunded is secured and kept in a deposit. The release of the amount ameliorates the situation of the allottee by relieving him of the financial constraints and also the mental anguish caused by the breach of obligations.” The builder pleaded that permitting withdrawal of his deposits was a “transgression of the jurisdiction” and legally impermissible. The buyer’s lawyer said the release is safeguarded by an undertaking to bring back the amount with interest if builder succeeds. “A party (the builder in this case), who has deprived the adversary of his hard-earned money for over a decade cannot be heard to urge that if the amount is released in favour of the allottee, and eventually, he succeeds, he would find it difficult to recover the amount,” the HC ruled. The HC also said “avowed object of the provisions contained in the proviso to Section 43(5) of RERA 2016 is to obviate a situation where the allottee, despite succeeding before the Authority as well as the Appellate Tribunal, is left in the lurch.” Thus, to ensure that the interest of the allottee is adequately protected when the promoter prefers an appeal against an order passed by the Authority or Adjudicating Officer directing the payment of any amount to the allottee, the legislature has provided that the promoter shall deposit the amount. The HC dismissed the builder’s submission that RERA Tribunal is empowered only to secure the pre-deposit and not permit withdrawal. The character of the amount which is ordered to be refunded by the Authority under Section 18 of the RERA 2016 is of critical salience, the HC observed. Section 18(1) of RERA obliges a builder to refund buyers with interest over delays. The HC said what is thus “directed to be refunded is the amount which was, in the first place, paid by the allottee to the promoter, and, in a fair number of cases, like the case at hand, years ago.” At heart is the liability to pay interest on amounts received from buyers, the court observed, adding, “In law, interest whether statutory or contractual, represents the profit the person deprived of the money.” The HC noted the capacity to withstand deprivation of legitimate amounts vastly differs between buyers and builders. It held that the RERA Appellate Tribunal exercised the discretion in a judicious manner.
