by THO
In a rare ruling in favour of homebuyers, the Maharashtra Real Estate Appellate Tribunal (MREAT) has directed Mumbai-based Ekta Parksville Homes Pvt Ltd, a part of Ekta World, to refund the amount homebuyers paid for their apartment. The refund will include interest from the date of payment, along with stamp duty, registration charges, pre-EMI, and home loan settlement charges paid to a leading lender.
The case
Two homebuyers named Hemal Mehta and Shibani Mehta booked a flat in a project named Ekta Parksville in Vasai near Mumbai for ₹32.17 lakh. The agreement for the sale of the flat was executed on December 2, 2014.
According to the agreement, the apartment was to be delivered in December 2016. The homebuyers paid an amount of over ₹11 lakh and HDFC Bank disbursed a home loan of over ₹23 lakh to the developer as part of the subvention scheme floated by him.
Homebuyers first approach MahaRERA over possession
Owing to the developer’s ‘failure’ to give possession of the flat within the timeline, the homebuyers first approached the Maharashtra Real Estate Regulatory Authority (MahaRERA) seeking a refund of the entire amount paid to the developer, along with interest.
The developer appeared before the MahaRERA bench and submitted that the homebuyers had opted for the subvention scheme. The developer contended that the homebuyers had paid only around ₹8.43 lakh and that he had offered homebuyers take fit-out possession of the said apartment in February 2019.
The HDFC Bank submitted that they had sanctioned a home loan of ₹27 lakh, and ₹23.80 lakh had already been disbursed to the developer at the homebuyers’ request to purchase the apartment. Therefore, the bank contended that the homebuyers and the developer be directed to pay the outstanding HDFC dues and interest up to the actual payment date.
After hearing all the parties on August 9, 2021, the MahaRERA passed an order directing the developer to refund the amount to the homebuyers along with interest from January 1, 2017, up to the date of realisation of the total refund amount with interest at the prescribed rate.
Homebuyers approach MREAT against MahaRERA order
The homebuyers then approached MREAT to grant a refund of the total amount paid, including the equated monthly installments (EMIs) paid to HDFC Bank, together with stamp duty, registration fees, brokerage, and other expenses incurred to approve the loan for the flat.
The homebuyers submitted that the total cost of the flat was ₹32.17 lakh, besides other charges that included ₹1.93 lakh towards stamp duty, ₹30,000 registration fees, ₹33,024 towards MVAT, and possession charges ₹1.69 lakh. The amount paid for the flat was ₹36.42 lakh.
The homebuyers contended that HDFC Bank sanctioned the home loan under the 20:80 subvention scheme, for which a tripartite agreement was executed among the homebuyers, developer, and the bank. The developer was to bear the pre-EMI for the flat until the date of possession but failed to do so. The homebuyers contended that they had paid six months of pre-EMI interest, but the developer had not reimbursed it.
Also Read: Delayed possession: MahaRERA keeps registration of 1,750 lapsed real estate projects in abeyance
Possession delayed due to factors beyond the developer’s control.
The developer argued before MREAT that possession of the flat was delayed due to reasons beyond his control (force majeure). The builder contended that a third party had delayed completion of the subdivision of the larger layouts of the project’s land, roads, reservations, and internal infrastructure.
The developer also contended that the delay was due to stop work notices issued by the municipal corporation, certain court orders, delays in getting approvals, and the COVID-19 lockdown.
The developer also claimed that pre-EMI was to be paid until the handover of possession of the flat, for which fit-out possession was already offered in February 2019. The developer further added that he had completed the project’s construction and obtained an occupation certificate (OC) in July 2023.
The developer said that homebuyers’ contention is untenable as they are investors and not genuine allottees.
Maharashtra Tribunal’s verdict
MREAT, in its order, stated that the homebuyers are entitled to a refund of the paid amount together with interest and compensation for the developer’s failure to fulfil contractual obligations in the agreement for sale.
“The homebuyers were forced to file complaints seeking withdrawal from the project and pray for a refund of the entire amount. Homebuyers had to pay stamp duty, registration fees, MVAT, brokerage and other statutory charges,” the tribunal said in its judgment.
The Tribunal also stated that the homebuyers had to settle the HDFC bank loan as the promoter did not pay the pre-EMI or reimburse the amount to the buyers.
“It is just and proper to direct the developer to refund the entire amount paid by the homebuyers and also reimburse the actual amount paid by the homebuyers towards stamp duty, registration fees, MVAT, including other taxes/statutory payments together with the incidental expenses as well as to reimburse the actual expenses incurred towards the loan settlement and pre-EMI of the HDFC Bank,” the order stated.
The order also directed the developer to pay interest from receipt of the payments until the date of realisation.
The MREAT judgment dated February 17, 2025, directed the developer to pay the amount within 41 days.
An email query sent to Ekta Developers and HDFC Bank did not get any response.
Advocate Nilesh Gala, who appeared for the homebuyers along with advocate Manish Gala said that the “judgment will be a precedent for homebuyers fighting for a refund in a delayed possession along with stamp duty, registration, and EMI paid to the bank for a home loan. In this particular case, the developer had promised possession by 2017, but the project got an occupation certificate only in 2023. The booking was made in 2014, which is almost a decade-long wait,” said Gala.
