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The Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered the promoters of the Kalpataru Yashodhan project in Andheri West, Mumbai, to refund more than INR 1.4 crore to a homebuyer couple, along with interest, after the developer failed to deliver possession within the agreed timeframe and illegally forfeited the amount paid. The couple had booked a flat in 2017 and paid approximately INR 1.46 crore, about 20 per cent of the total consideration, for a property worth around INR 7.12 crore. When possession was delayed beyond the promised date, the promoter issued demand letters prematurely and eventually forfeited the payments, later selling the same unit to a third party. MahaRERA ruled that forfeiture under these conditions was arbitrary and violative of provisions of the Real Estate (Regulation and Development) Act, and that the buyers retained statutory protection regardless of the absence of a registered sale agreement.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed the promoters of the Kalpataru Yashodhan residential project in Andheri West, Mumbai, to refund a homebuyer couple more than INR 1.4 crore, plus interest, after finding that the developer had violated statutory provisions by forfeiting their payments and failing to deliver possession. The ruling highlights the authority's role in enforcing buyer protections under the Real Estate (Regulation and Development) Act. Advertisement
The dispute dates back to 2017, when the couple booked a flat in the high-end project with a total sale consideration of approximately INR 7.12 crore. They paid roughly INR 1.46 crore, representing around 20 per cent of the total price, with a scheduled possession date of December 2018. However, the promoter failed to hand over possession on time and began issuing demand letters even before possession was due, which MahaRERA later deemed premature and unlawful.
In February 2020 the developer forfeited the entire amount paid by the buyers and subsequently sold the same apartment to a third party. MahaRERA held that this forfeiture was arbitrary, disproportionate and in violation of statutory provisions, particularly those governing breach of contractual obligations and acceptance of more than 10 per cent consideration without a registered agreement. The authority noted that any person to whom an apartment is allotted for consideration qualifies as an allottee under the law, regardless of whether a formal agreement of sale has been executed, and that the promoter's attempt to characterise the buyers as investors was not supported by credible evidence.
MahaRERA's order specified that forfeiture of amounts paid by a homebuyer, especially where the developer itself is in breach of obligations, is unconscionable and illegal. The authority observed that, having sold the same flat to another party, the promoter could not simultaneously retain the original payments and benefit from a resale, as this would amount to unjust enrichment.
In addition to directing the refund of the principal amount paid by the couple, MahaRERA ordered payment of interest on the refunded sum calculated at the State Bank of India's highest marginal cost of funds lending rate (MCLR) plus two per cent. The judgment underscores the regulatory mechanism designed to protect homebuyers interests, particularly in cases of delayed possession and improper forfeiture of funds by developers.
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