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The Bombay High Court has imposed a penalty of INR 1 lakh on a developer for dragging homebuyers into unnecessary litigation, reinforcing the importance of MahaRERA's authority in safeguarding consumer rights. The case stems from a 2019 dispute where a couple, after facing issues securing a home loan due to the developer's partial documentation, sought a refund for a flat booked in an under-construction project in Jogeshwari. Despite a favorable MahaRERA and tribunal ruling, the developer escalated the matter to the Bombay High Court. The court has now closed the second appeal, directing the developer to honor the refund along with interest and additional costs.
The Bombay High Court has recently imposed a penalty of INR 1 lakh on a developer for forcing flat buyers into unnecessary litigation, first before the appellate tribunal and now the high court, after failing to comply with earlier orders. Advertisement
The dispute dates back to 2019, when R S Pillai and his wife, R R Pillai, jointly booked flat 1603 in Avant Heritage, a project under construction by Aishwarya Avant Builders LLP in Jogeshwari, priced at INR 1.15 crore. The couple paid over 10 percent of the flat's value, amounting to INR 13.50 lakh, but their attempt to secure a home loan was unsuccessful. The obstacle arose as the developer issued a no-objection certificate solely in R R Pillai's name, leaving out the joint applicant. Opting to withdraw, the Pillais requested a refund, but their efforts went unanswered.
They approached MahaRERA, which ruled in favor, ordering a refund with 2 percent interest. The developer, however, challenged the order before the appellate tribunal, which upheld the MahaRERA directive. Instead of complying, the developer escalated the matter to the Bombay High Court.
In its ruling, the high court observed that the developer displayed no genuine intention of following MahaRERA's initial option to execute a registered agreement for sale. The court pointed out that no communication was made by the developer to the respondents after the order was issued in early 2021, reinforcing the perception of a lack of interest in fulfilling this commitment.
Concluding the matter, the court imposed a fine of INR 1 lakh on the developer and directed that the full refund, as ordered by the tribunal, along with interest and legal costs, be paid to the respondents by mid-April 2025.
Advocate Anil D'Souza, representing the Pillais and part of the Bar Association of MahaRERA, noted that developers cannot simply forfeit homebuyers' money based on insubstantial grounds, especially when project delays are already commonplace. He emphasized that this ruling will strengthen homebuyers' confidence in MahaRERA and inspire more people to challenge errant developers who unjustly withhold booking amounts or further payments.
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