The MahaRERA ruling is modified by MREAT, who also instructs the builder to pay interest going forward.

MUMBAI: A MahaRERA order from 2021 that barred homebuyers from receiving interest retroactive to the date of their payments as well as a refund for other payments, such as stamp duties and registration fees, was modified by the Maharashtra Real Estate Tribunal (MREAT).

The MREAT directed an Andheri-based developer to pay interest on the amount paid by the home buyer right from the day of deposit and also to refund the statutory payments.

While determining interest liability, the MREAT also rejected the promoter’s request for the relief provided by MahaRERA for the Covid moratorium period.

The property purchasers, who were represented by Attorney Nilesh Gala, had reserved a unit at Andheri (East)’s Krishna Residences for a total of Rs 2.66 crore in 2015, with delivery scheduled for 2017.

Kunal and Sonal Kumbhat, who purchased a home, paid roughly Rs 70 lakh in total, including taxes and statutory charges. The promoter did not, however, provide possession by the scheduled date.

According to the MREAT’s judgment, it would be just and fair to refund the amount paid along with interest to the home buyer’s right from the date of receipts, even though MahaRERA had ordered the promoter Krishna Developers to do so as of the date of default, which is 2017 in its order.

The Bombay High Court order stated that the requirement to pay interest is not a penalty, as the payment of interest is compensatory in nature in light of the delay experienced by the allottee who has paid for his flat but has not yet received possession of it, was cited by MREAT along with Supreme Court rulings and the explanation of Section 2(a) of the Real Estate (Regulation and Development) Act.

Simply said, interest serves as a payment for the usage of money. The MREAT refused the promoter’s request to use the MahaRERA-allowed moratorium and pointed out that in the two circulars issued in 2020, the project registration’s validity dates had been extended during the Covid-19 without changing the date of possession.