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MUMBAI: The High Court observed that a builder and a buyer cannot be treated equally as the buyer is typically in a vulnerable position. Consequently, it allowed a flat purchaser to withdraw a sum deposited with the builder, amidst an appeal regarding a project that has been delayed for over a decade.
On Monday, the High Court ruled that the provisions of RERA do not prevent the appellate tribunal from exercising its discretion in exceptional cases to release amounts deposited by the builder during the appeal process. The Court clarified that this discretion is contingent on the specific circumstances of each case and outlined key factors to consider, including any disputes regarding sums paid by the buyer for which a refund is sought due to project delays.
The builder appealed the RERA appellate tribunal’s order that allowed a buyer to withdraw funds during the appeal’s pendency. Initially, the builder contested a September 2025 order from the Maharashtra Real Estate Regulatory Authority (MahaRERA) that permitted flat allottee Mitul Gada to reclaim pre-deposits made by the builder, Rare Townships Private Limited. The State RERA appellate tribunal mandated the builder to make a pre-deposit to proceed with his appeal; however, in January 2026, it ruled in favor of the buyer, prompting the builder to approach the High Court.
Mital Gada had booked two flats in the North Sea Heights (A1) project for over ₹3 crore in 2015, with possession originally set for December 31, 2018. Having paid nearly ₹2 crore, and facing delays in possession, he filed a complaint with MahaRERA, seeking a refund under Section 18 of RERA, along with interest and compensation. In March 2021, MahaRERA ordered the refund with interest.
On March 30, Justice N J Jamadar acknowledged that “it is no solace to an allottee that the amount ordered to be refunded is secured and kept in a deposit.” He emphasized that releasing the amount would alleviate financial strain and reduce the mental anguish caused by the builder’s breach of obligation.
The builder contended that allowing the withdrawal of deposits amounted to a “transgression of jurisdiction” and was legally invalid. However, the buyer’s attorney noted that the release included a safeguard requiring the buyer to return the amount with interest if the builder’s appeal succeeded.
The High Court ruled, “A party (the builder) that has denied its adversary access to hard-earned money for over a decade cannot argue that releasing the sum would create recovery difficulties if the allottee eventually prevails.”
Additionally, the High Court remarked that the primary aim of the provisions in Section 43(5) of RERA 2016 is to prevent situations where an allottee, upon succeeding before the Authority and Appellate Tribunal, is left without recourse. To safeguard the allottee’s interests when a promoter appeals against an order directing payment, the law mandates that the promoter must deposit the required amount.
The High Court dismissed the builder’s claim that the RERA Tribunal’s role is limited to securing pre-deposits without permitting withdrawals.
The Court highlighted the significance of the amount ordered for refund under Section 18 of RERA 2016, which obligates builders to refund buyers along with interest due to delays.
The High Court stated that the amount directed for refund represents what the allottee initially paid the promoter, often years prior. At the core of the issue is the builder’s liability to pay interest on the received amounts, reinforcing the notion that interest, whether statutory or contractual, compensates for deprivation of funds.
Finally, the Court noted the disparity in financial resilience between buyers and builders, affirming that the RERA Appellate Tribunal exercised its discretion judiciously.
