The Bombay High Court recently issued a landmark ruling affirming that the Real Estate Appellate Tribunal has the discretionary power to allow homebuyers to withdraw funds deposited by developers, even while the developer's appeal is still pending. This decision arose from a case involving a homebuyer who booked two flats in a project called North Sea Heights in 2015. Despite paying nearly ₹2 crore, the buyer faced a delay of over a decade. In 2021, MahaRERA ordered a refund with interest, leading the builder to appeal and deposit the required amount with the tribunal.
In its judgment, the High Court emphasized that builders and buyers do not stand on equal footing, describing the homebuyer as generally very vulnerable. Justice N.J. Jamadar observed that simply securing a deposit provides little relief to an allottee suffering from financial constraints and mental anguish due to prolonged project delays. The court rejected the builder's argument that the tribunal’s jurisdiction was limited only to securing the pre-deposit. Instead, it ruled that the provisions of RERA do not preclude the release of such amounts in deserving cases.
To safeguard the developer's interests, the court noted that such withdrawals are typically permitted against an undertaking from the buyer to return the amount with interest should the builder ultimately succeed in the appeal. The court clarified that this discretion depends on the specific facts of each case, including the validity of the amounts paid and the extent of the delay. Ultimately, the ruling underscores the compensatory nature of RERA, ensuring that the law serves to ameliorate the hardships faced by consumers rather than just serving as a procedural hurdle for developers.
