Cci Projects Private Limited Mumbai- 400066 vs Rajesh Kumar Chaudhary And Anr

2026:BHC-AS:9416
SA-479-2021 (final).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
SECOND APPEAL NO. 479 OF 2021
CCI Projects Private Limited
Office at Rivali Park, CCI Compound, Western
Express Highway, Borivali East,
Mumbai 400 066.
]
]
]
] ...Petitioner
Versus
1. Mr. Rajesh Kumar Chaudhary ]
2. Mrs. Sapna Chaudhary
Both having address at
C-1001, Ekta Meadows, Off Western Express
Highway, Siddharth Nagar, Borivali (East),
Mumbai – 400066.
]
]
]
]
]
]
3. Mr. Abhijit Kumar Phanikumar ]
4. Ms. Nandini Hiten Khatau ]
5. Ms. Maithili Hiten Khatau ]
6. Mr. Pradip Haridas Udeshi ]
7. Ms. Nayna Bharat Pasta
All having office at Rivali Park,
CCI Compound, Western Express Highway,
Borivali (East), Mumbai – 400 066.
]
]
]
]
] …Respondents
——————
Mr. Naushad Engineer, Senior Advocate i/b Wadia Ghandy and Co. for Appellant.
Mr. Harshad Bhadbhade for Respondents.
——————
Coram : Sharmila U. Deshmukh, J.
th
Reserved on : 9 April, 2026.
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Pronounced on : 18 June, 2026.
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Judgment :
1. The Second Appeal is filed at the instance of the promoter,
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challenging the judgment dated 10 March, 2021 passed by
Maharashtra Real Estate Appellate Tribunal, Mumbai [for short,
th
“Appellate Tribunal” ] quashing the order dated 17 September, 2018
in Complaint No. CC006000000054636 passed by MahaRERA and
directing the promoters to pay interest for delayed possession. For
sake of brevity, the parties are referred to as Promoter and allottees.
th
2. By order dated 11 December, 2025, this Court framed the
following substantial questions of law:
“(i) Whether in view of provisions of Section 55 of the
Indian Contract Act, 1872, the acceptance of delayed
performance would disentitle the promisee from
compensation claimed on account of non-performance of
contract at the agreed time?
(ii) Whether the provisions of Section 18 of the Real
Estate (Regulation and Development) Act, 2016 will
override the provisions of Section 55 of the Indian
Contract Act, 1872?
(iii) Whether in view of provisions of Section 32 of Indian
Contract Act, 1872, the force majeure events listed in the
contract could have been ignored?”
3. The facts of the case are that allottees filed a complaint under
Section 31 of the Real Estate (Regulation and Development) Act, 2016
[for short, “RERA Act” ] with the Maharashtra Real Estate Regulatory
st
Authority [for short, “1 Authority” ] stating that the allottees had
booked an apartment in building known as Wintergreen in the project
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st
developed by the Promoters. On 1 October, 2011, the allotment letter
was issued by the Promoters which mentioned the date of possession
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as 30 June, 2015 with grace period of six months. The payment
schedule which was mentioned in Annexure-1 of allotment letter
provided for construction based payment schedule with payment of
5% which would be the balance payable on offer for possession. On
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26 March, 2013, an agreement was entered into between the
promoters and the allottees and as per Clause 17 thereof, the
promoters agreed to give possession to the allottees on or before
February, 2016.
4. The grievance was that till the filing of the complaint which was
rd
on 23 May, 2018, the possession was not given. The total flat
consideration was Rs. 1,82,18,640/- and the allottees had paid part
consideration of Rs 1,73,07,708/- and apart from that had also paid the
sum of Rs. 9,44,160/- towards stamp duty and registration charges on
th
26 March, 2013. The service tax, VAT, GST and TDS amounts were also
paid and thus the allottees have paid sum of Rs. 1,91,59,215/- to the
promoter.
5. As per the project registration under RERA, the proposed date of
st
completion of project was 31 December, 2018 and revised proposed
st
date of completion was 31 December, 2019. The allottees sought the
relief of handing over possession of the apartments along with
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payment of interest at the rate of 10.35% on the amount paid from the
st
agreed date of possession i.e. from 1 March, 2016 till the date of
actual possession and legal expenses of Rs. 1,00,000/-.
th st
6. By order dated 17 September, 2018, the 1 Authority noted the
submission of promoters that the construction work of project could
not be completed for reasons beyond the promoter’s control and that
the construction would be completed before the revised completion
date set out in the registration web page. It further noted that in
respect of some other complaint, the promoter had already completed
the project by December, 2019 and MahaRERA has passed various
orders allowing the promoter to complete the project first with liberty
to allottees to demand the interest at the relevant stage as per the
st
provision of Section 18 of RERA Act. The 1 Authority directed the
promoter to handover the apartments with occupancy certificate to
st
complainants before the period of 31 December, 2019 and that the
allottees shall be at liberty to demand interest at an appropriate stage
under Section 18 of the RERA Act for the delay in completing the
project and disposed of the complaint.
7. As against this, the allottees approached the Appellate Tribunal
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and by the impugned judgment dated 10 March, 2021, the Appellate
Authority quashed and set aside the order of the RERA Authority
allowing the complaint and directing the following :
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“(a) Promoter shall pay an interest @ State Bank of
India’s highest Marginal Cost of Lending Rate plus
2% to Allottees on the amount paid to Promoters for
st
delayed period of possession from 1 March, 2016
till handing over possession of the flat to Allottees.
(b) Promoter shall pay Rs. 25,000/- towards cost to
the Allottees and shall bear own costs.”
8. The Appellate Authority held that there is no authentic evidence
to show that the allottees had accepted the revised date of possession
or had acquiesced or waived their right to interest. It held that the
allottees stayed with the project despite the promoters failing to give
the possession as per the agreed date and gets the statutory right to
claim interest for delayed possession. It held that the promoters
unilaterally extended the date of possession which is not binding on
the allottees. In a concurrent judgment, the non-judicial member
agreed with the finding and conclusion recorded by judicial member
that allottees are entitled to interest for delayed period of possession.
9. Mr. Naushad Engineer, learned Senior Advocate appearing for
Appellant would submit that as per the allotment letter, the
st
possession was to be handed over by 31 December, 2015 and subject
to force majeure events by February, 2016. He points out that the
schedule of payments accordingly stipulated that the full payment will
th
be made by February, 2016. He submits that on 15 April, 2015, the
Promoter addressed a communication to the allottees pointing out
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that there is delay due to reasons beyond the control of the promoter
and possession would be handed over by March, 2018. He submits that
there was no denial or objection and in fact, the allottees accepted the
delayed payment schedule as per the altered delayed timelines. He
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would further submit that on 14 March, 2017, the promoters
addressed a letter to allottees stating that the revised date of
possession is December, 2018 to which also there was no response or
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denial. He submits that on 9 June, 2017, the promoter communicated
with the allottees revising the payment schedule for balance
installments stating that original allottees were to pay 5% towards six
months from completion of terrace slab which would have fallen due
th
on 9 June, 2017, which is revised to March, 2018 and last 5% will be
paid on possession. He submits that by this letter, the allottees were
put to notice that by reason of altered date of possession, timelines
were also being reworked. He submits that the allottees accepted the
th
revised payment schedule and made 5% installment payment on 30
March, 2018.
10. He submits that the flat purchaser’s agreement was pre-RERA
and by accepting the delayed performance, there is an implied consent
given to revised date of possession. He submits that by communication
th
dated 19 August, 2017 addressed by the promoters to the allottees, it
was reiterated that the final date of delivery is December, 2019 and the
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allottees were called upon to give an acknowledgment to the said
letter as a token of acceptance. He would further point out that in the
said communication, it was clearly stated that though as per RERA, the
final date of delivery is December, 2019, the building is likely to be
completed in or about December, 2018 and such early completion
would lead to earlier demands and as such payments would have to be
made as per the milestones determined. He submits that even this
letter was not responded by the allottees. He submits that despite the
acceptance of delayed performance, complaint was filed by the
th
allottees with MahaRERA. He submits that on 7 April, 2021, the
th
occupation certificate was obtained and possession was offered on 13
th
April, 2021 and has been taken on 18 June, 2021.
11. He submits that as the promoter had informed the allottees
about delay and the substituted performance, the allottees had the
duty to speak and to either confirm or to reject the substituted
performance. He submits that if the party chooses to remain silent, he
forfeits his right to contend that he did not agree to the revised date.
He submits that it is clear from the facts of the present case that the
allottees by their conduct had accepted the substituted performance
and the allottees did not choose to repudiate or terminate the contract
and had made the payments as per the revised timelines. Drawing
attention of this Court to Section 55 of the Indian Contract Act, 1872,
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he submits that once allottees have accepted the delayed
performance, no rights inures to the allottees to claim compensation
or interest unless he puts the promoter to notice that he is going to
claim compensation for delayed performance. He submits that when it
was pointed out to the allottee that the promoter is not in position to
comply with the timelines, the allottee has the option to either rescind
the contract or to continue the contract and unconditionally accept the
revised date or to continue with the contract and claim compensation
for delayed performance. He submits that if he chooses the third
option then under Section 55 of the Indian Contract Act, 1872 [for
short, “the Contract Act” ] the allottee, at the time of acceptance of
delayed performance, must give notice to the promoter of his
intention to claim compensation for delay.
st
12. He would submit that the interest has been awarded from 1
th
March, 2016 till the date of possession i.e. 18 June, 2021. He submits
that as the allottees by their conduct had accepted and made the
st
payment as per the revised timelines i.e. up to 31 December, 2019,
st
there is no question of allottees being entitled to any interest upto 31
December, 2019.
th
13. He would further submit that under a circular of RERA dated 18
May, 2020, period of six months has been considered as force majeure
period which is to be treated as moratorium for the purpose of
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calculating the interest under Section 18 of RERA Act and therefore,
st th
the period from 1 February, 2020 till 30 June, 2020 will also have to
be excluded. He submits that the promoter was therefore, liable to pay
st th
interest only from 1 July, 2020 to 13 April, 2021, being the date on
which the possession was offered.
14. He would further submit that there is no inconsistency between
Section 18 of RERA Act and Section 55 of the Contract Act as Section
18 of RERA Act does not contemplate a situation where the delayed or
substituted performance is accepted and it is in such a situation that
Section 55 of the Contract Act would apply and therefore, the allottees
cannot claim compensation for period of delay which he ratifies or
elects. He would further point out that under Section 88 of RERA Act,
the application of other Acts is not barred and therefore, the RERA Act
is in addition to and not in derogation of the Contract Act.
15. He would further submit that Section 18 of RERA Act gets
triggered once the agreed date for handing over of possession has
passed and has no role in determining the agreed date, which is to be
seen either from the written agreement or the correspondence and
conduct of the parties and in that regard, Section 55 or Section 62 of
Contract Act becomes relevant in interpreting the agreement between
the parties. He submits that provisions of Section 18 of RERA Act and
Sections 55 and Section 62 of the Contract Act operate entirely in
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different spheres and therefore, there is no question of inconsistency
between RERA Act and Contract Act. In support, he relies upon the
following decisions :
Bombay Dyeing and Manufacturing Company
1
Limited vs. Ashok Narang and Another
2
Arosan Enterprises Ltd. vs. Union of India
3
State of Kerala vs. M. A. Mathai
Hindustan Petroleum Corporation vs. Batliboi
4
Environmental Engineers Ltd.
Dr. Miss Kunda d/o Khemraj Choudhary vs.
5
Mathurabai w/o Mahadu Jadhav
6
Municipal Corporation of Delhi vs. Gurnam Kaur
7
Director of Settlements, AP vs. Mr. Apparao
Sarva Shramik Sanghatana vs. State of
8
Maharashtra
16. Per contra, Mr. Harshad Bhadbade, learned counsel appearing for
Respondents would submit that the promoter is trying to seek
advantage of its own wrong of failure to give possession as per the
agreed date. He would submit that unilateral extension of revised date
of possession by the promoter is not binding upon the allottees. He
th
1 Second Appeal (St.) No. 4996 of 2020, decided on 30 August, 2021.
2 (1999) 9 SCC 449.
3 (2007) 10 SCC 195.
4 2008 2 MH LJ 542.
(2016) 3 MH LJ 602.
5
6 (1989) 1 SCC 101.
7 (2002) 4 SCC 638.
8 (2008) 1 SCC 494.
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submits that the date of agreement in the context of Section 18 of
RERA Act is required to be ascertained from the Agreement for sale
entered into between the parties, which is February, 2016, regardless
of any unforeseen events which is not attributable to the allottees. He
submits that there is no question of application of Section 55 of the
Contract Act in view of express provision of Section 18 of RERA Act
which has been held to confer right on the allottee to seek interest on
delayed possession.
17. He submits that agreements were executed in pre-RERA regime
and possession could be handed over only with the occupation
certificate. He submits that as RERA Act is retroactive in operation,
even if the Agreements were entered pre-RERA, the provisions of
Section 18 would apply. He submits that the object of RERA Act is to
protect the interest of the consumers in the real estate sector and the
provisions have to be interpreted to further the stated object. He
would draw attention to Section 11(d) (e), Section 11(4) (b) and Section
19(2) of RERA Act, he submits that it was the duty of the promoters to
update the allottees about the occupation certificate. He would
further point out the provisions of Section 89 of RERA Act and would
submit that the provisions of RERA Act has overriding effect
notwithstanding anything inconsistent contained in any other law for
the time being in force. He submits that the Contract Act is general act
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whereas the RERA Act is a special Act and therefore, provisions of
Section 18 of RERA Act would prevail.
18. He submits that under Section 8 of MOFA, the allottee could only
exit from the project whereas under Section 18 of RERA Act, option is
given to either exit from the project or to continue with the project
and in case of the allottee continuing with the project, he is entitled to
interest for delayed possession. He submits that the payment in the
present case was construction linked and delay of construction meant
delayed payments. He submits that as the payment timelines were not
linked to specific dates, it cannot be said that there was any acceptance
of delayed performance.
19. He submits that Section 55 of the Contract Act entitles the
promisee to compensation which is the scenario if the allottees exit
from the project and if the allottees continue with the project, they are
entitled to interest. He would submit that in the case of Newton
9
Promoters and Developers Pvt. Limited vs. State of UP and Others ,
the Hon’ble Apex Court has held that the allottee has an unqualified
right to seek refund of an amount with interest under Section 18(1)(a)
and Section 19(4) of the RERA Act, which is not dependent on any
contingencies or stipulations thereof. He submits that the decision in
the case of Arosan Enterprises Limited vs. Union of India (supra)
9 2021 SCC OnLine SC 1044.
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relied upon by Mr. Engineer, it was held that where the contract itself
provides for extension of time, the same cannot be termed to be
essence of the contract and the default in such case, does not make the
contract voidable either.
20. He has taken this Court in detail through the impugned order
and would point out the findings of fact about absence of any evidence
to show that the allottee has accepted revised date of possession. He
submits that before the Appellate Authority, the plea raised was of
waiver and acquiescence and for the first time before this Court, the
plea of Section 55 of the Contract Act is raised. He submits that the
Appellate Authority has held that the allottees have not relinquished
their right to claim interest in the delayed possession and has
specifically held that the promoters unilaterally extended date of
possession which is not binding on the allottees.
21. He would submit that the circular of RERA relied upon is not
applicable as the possession was to be handed over pre-covid.
22. In rejoinder, Mr. Engineer would submit that the case of the
allottees is that time is of essence which gives him right to exit and
treat the contract as voidable and Section 55 of the Contract Act
contemplates such a case. He submits that there were reciprocal
obligation to be performed by the parties and allottees cannot claim
that because of change of law, the provisions of Section 55 of Contract
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Act will not apply. He submit that there is no requirement to update
every single buyer of the construction. He submits that the
Government circular will apply in the present case as the circular
specifically provides that the force majeure period will be treated as
moratorium period for the purpose of calculating interest under
Section 18 of RERA Act.
REASONS AND CONCLUSION :
23. The first substantial question of law framed by this Court seeks
an answer as to whether there was acceptance of delayed performance
and secondly, whether such acceptance of delayed performance
disentitles the allottees from claiming compensation under Section 18
of RERA Act in the absence of notice by the allottees of their intention
to do so as contemplated by Section 55 of Contract Act.
24. The RERA Act was enacted for regulating and promoting real
estate sector and to infuse transparency in the sale of real estate
projects and to protect the interest of consumer in the real estate
sector providing mechanism under the Act itself for adjudicating the
grievances. The scheme of RERA Act statutorily regulates the
development project creating rights and obligations aimed at ensuring
that the flat purchaser’s interest is protected by imposing obligations
on the promoters to complete the development project in a time
bound schedule and conferring various rights on the allottees upon
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failure of the promoter to perform its obligations.
25. Section 18 of RERA Act, reads as under :
“18. Return of amount and compensation. —(1) If the
promoter fails to complete or is unable to give possession
of an apartment, plot or building,—
(a) in accordance with the terms of the agreement for
sale or, as the case may be, duly completed by the date
specified therein; or
(b) due to discontinuance of his business as a developer
on account of suspension or revocation of the
registration under this Act or for any other reason, he
shall be liable on demand to the allottees, in case the
allottee wishes to withdraw from the project, without
prejudice to any other remedy available, to return the
amount received by him in respect of that apartment,
plot, building, as the case may be, with interest at such
rate as may be prescribed in this behalf including
compensation in the manner as provided under this Act:
Provided that where an allottee does not intend to
withdraw from the project, he shall be paid, by the
promoter, interest for every month of delay, till the
handing over of the possession, at such rate as may be
prescribed.
(2) The promoter shall compensate the allottees in case
of any loss caused to him due to defective title of the
land, on which the project is being developed or has been
developed, in the manner as provided under this Act, and
the claim for compensation under this subsection shall
not be barred by limitation provided under any law for
the time being in force.
(3) If the promoter fails to discharge any other obligations
imposed on him under this Act or the rules or regulations
made thereunder or in accordance with the terms and
conditions of the agreement for sale, he shall be liable to
pay such compensation to the allottees, in the manner as
provided under this Act.”
26. Section 18 of RERA Act codifies the summary nature of the
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proceedings by discharging the onus of proof of loss upon failure by
the Promoter to hand over possession as per terms of the agreement
or date specified therein. It gives an option to the allottee to exit from
the project with refund of the amounts paid alongwith interest
including compensation or to stay in the project and get interest for
every month of delay till handing over possession. Section 18 thus
confers a statutory right of the allottees to interest for the delayed
possession, if they choose to remain with the project.
27. Section 55 of Contract Act deals with the consequences of failure
to perform the contract at fixed time in cases where time is of essence
and where time is not of essence. Section 55 reads as under:
“55. Effect of failure to perform at fixed time, in
contract in which time is essential.— When a party to a
contract promises to do a certain thing at or before a
specified time, or certain things at or before specified
times, and fails to do any such thing at or before the
specified time, the contract, or so much of it as has not
been performed, becomes voidable at the option of the
promisee, if the intention of the parties was that time
should be of the essence of the contract.
Effect of such failure when time is not essential. —If it
was not the intention of the parties that time should be
of the essence of the contract, the contract does not
become voidable by the failure to do such thing at or
before the specified time; but the promisee is entitled to
compensation from the promisor for any loss occasioned
to him by such failure.
Effect of acceptance of performance at time other
than that agreed upon. —If, in case of a contract
voidable on account of the promisor’s failure to perform
his promise at the time agreed, the promisee accepts
performance of such promise at any time other than that
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agreed, the promisee cannot claim compensation for any
loss occasioned by the non-performance of the promise
at the time agreed, unless, at the time of such
acceptance, he gives notice to the promisor of his
intention to do so.”
28. In cases where time is of essence, Section 55 of Contract Act
provides that the contract, if not performed, becomes voidable at the
option of the promisee, who forgoes the right to compensation for any
loss occasioned by the non-performance in absence of notice at the
time of acceptance of delayed performance. Where time is not of
essence, the contract is not voidable by failure to perform at specified
time, however the promisee is entitled to compensation.
29. In the present case, the flat purchaser’s agreement has been
executed under Maharashtra Ownership of Flats Act, 1963. Section 4 of
MOFA Act prescribes the particulars of flat purchaser agreement to
include inter alia the date on which the possession shall be handed over
to the flat purchaser. The statutory provisions of RERA Act providing
for registration of the project requires the promoter to give the time
period within which the project shall be completed and provides for
consequences of failure to hand over possession as per the date duly
specified. Clause 17 of the flat purchaser’s agreement sets outs that
the possession of the premises shall be given by February, 2016. The
consequence of failure to hand over possession is provided in Clause
18 giving the purchaser the option to terminate the agreement.
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Clauses in the agreement make it clear that the intention of the parties
was to make time essence of contract. As the flat purchaser’s contract
is of the nature demanding compliance with the fixed date for
performance and provides consequence for non-compliance, time is
the essence of the contract.
30. The consequence of failure to hand over possession by the date
specified in the agreement in respect of real estate project is provided
under Section 18 of RERA Act. Plain reading of Section 18 does not
indicate that the rights conferred on the allottee upon failure of the
promoter to hand over possession by the date duly specified is
qualified by any contingency. Neither any provision of RERA Act has
been demonstrated which would have the effect of qualifying the
rights under Section 18.
31. Section 18 of RERA Act gives option to the allottees upon failure
of the promoter to hand over possession by the date specified in the
agreement or as per the terms of the agreement either to withdraw
from the project with refund of amounts paid along with interest
including compensation or to stay with the project and get interest for
every month of delay. In the context of real estate project, where the
performance of promise of the promoter is to hand over possession by
a specified date, the right given by Section 18 of RERA Act to continue
with the project is nothing but permitting acceptance of delayed
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performance without forgoing the allottee’s right to claim interest for
every month of delay.
32. Section 55 of Contract Act permits the same option to the
promisee when it gives the right to the promisee to accept the
performance of the promise at a date other than that agreed but
qualifies the right to claim compensation only upon giving notice while
accepting delayed performance.
33. If the right under Section 18 of RERA Act is an unqualified
absolute right, the acceptance of revised timelines and delayed
performance cannot lay fetters on the right to claim interest. The
10
Hon’ble Apex Court in Imperia Structures Limited vs. Anil Patni while
interpreting Section 18 of RERA Act, has held in paragraph 25 as under:
“ 25. In terms of Section 18 of the RERA Act, if a promoter
fails to complete or is unable to give possession of an
apartment duly completed by the date specified in the
agreement, the promoter would be liable, on demand, to
return the amount received by him in respect of that
apartment if the allottee wishes to withdraw from the
Project. Such right of an allottee is specifically made
“without prejudice to any other remedy available to him”.
The right so given to the allottee is unqualified and if
availed, the money deposited by the allottee has to be
refunded with interest at such rate as may be prescribed.
The proviso to Section 18(1) contemplates a situation
where the allottee does not intend to withdraw from the
Project. In that case he is entitled to and must be paid
interest for every month of delay till handing over of the
possession. It is up to the allottee to proceed either
under Section 18(1) or under proviso to Section 18(1)
…….”.
10 (2020) 10 SCC 783.
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34. The above interpretation placed on Section 18 of RERA Act was
noted in the case of Newtech Promoters and Developers Private
Limited vs. State of U.P. (supra). The Hon’ble Apex Court was
considering interalia the issues as to the retroactive operation of RERA
Act and the jurisdiction of the Regulatory Authority to direct refund
under the provisions of RERA Act including Section 18 and other
ancillary issues. The Hon’ble Apex Court considered the statutory
scheme of RERA Act and observed in paragraph 24 as under:
“24. The unqualified right of the allottee to seek refund
referred under Section 18(1)(a) and Section 19(4) of the
Act is not dependent on any contingencies or stipulations
thereof. It appears that the legislature has consciously
provided this right of refund on demand as an
unconditional absolute right to the allottee, if the
promoter fails to give possession of the apartment, plot
or building within the time stipulated under the terms of
the agreement regardless of unforeseen events or stay
orders of the court/tribunal, which is in either way not
attributable to the allottee/homebuyer, the promoter is
under an obligation to refund the amount on demand
with interest at the rate prescribed by the State
Government including compensation in the manner
provided under the Act with the proviso that if the
allottee does not wish to withdraw from the project, he
shall be entitled for interest for the period of delay till
handing over possession at the rate prescribed.”
(Emphasis supplied).
35. The Hon’ble Apex Court has interpreted the statutory provisions
of Section 18 and Section 19(4) of RERA Act noting the legislative
intent. It has held that Section 18 of RERA Act confers an unqualified,
unconditional absolute right upon the allottee to claim under Section
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18 of RERA. Though it is sought to be contended by Mr. Engineer, that
the decision in Newtech Promoters and Developers Pvt. Ltd. vs. State
of UP (supra) was not founded on considerations which arise in the
present case, the Hon’ble Apex Court has interpreted the statutory
scheme of the RERA Act to hold that the right of allottee under Section
18(1)(a) of the Act is unqualified right not affected by any
contingencies or stipulations or an unforeseen event or even stay
orders of the Court or Tribunals. On appreciation of the legislative
intent, it places the right of allottee to seek refund on demand beyond
the impact of any enactment by interpreting the right to be an
unqualified absolute right. The interpretation of Section 18 of RERA
Act by the Hon’ble Apex Court would bind this Court.
36. As the Hon’ble Apex Court has held the provisions of Section 18
of RERA Act to be beyond the pale of any qualification or condition,
Section 55 of Contract Act, making the right to demand interest
conditional upon giving notice to the promisor of his intention, would
have the effect of qualifying the absolute right of the allottee under
Section 18 of RERA Act, which runs contrary to the statutory provisions
and the interpretation by the Hon’ble Apex Court.
37. Under the provisions of Section 18 of RERA Act, primacy is given
to the due date specified in the agreement by linking the failure to
hand over possession to the terms of agreement or as per the date
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specified, whereas Section 55 of Contract Act contemplates a situation
of extension of time de-hors the date specified in the agreement. The
unqualified absolute right of the allottee stands statutorily recognised
and the continuation with the project, which if expressed in the
language of Section 55 of Contract Act, constitutes acceptance of
delayed performance, does not impact the unfettered statutory right
conferred by Section 18 of RERA Act to claim interest.
38. The Appellate Authority has come to a finding of fact that there
is no authentic evidence to show that the allottees accepted revised
date of possession or that the allottees have in fact acquiesced. The
revised timelines were unilateral and the contention of Mr. Engineer of
acceptance of delayed performance is premised on the basis that by
accepting the revised dates of payment in accordance with revised
schedule, the allottees have accepted the delayed performance by
their conduct.The payment schedule agreed between the parties was
construction linked payments and not linked to specific dates. Unless
and until, the specified construction was carried out, no right accrued
to the promoter to claim any money and hence, the contention that
there were revised timelines is unacceptable.
th
39. The communication of 15 April, 2015 informs the allottees
about the delay with an assurance to hand over final possession by
th
March, 2018. The communication of 18 March, 2017 assures
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possession by December, 2018. The communication of 19 August,
2017 informs allottees about RERA date of handing over possession of
December, 2019 and that they would endeavor to complete the project
by December, 2018 and such early completion would lead to early
demand for payments. The communications, at the highest, conveys
information about the delay and gives assurance to complete the
project. The revised timelines are couched in a manner so as to be in
nature of information requiring no further acts by allottees.
40. Even accepting that there was acceptance of revised date of
possession, considering Section 18 of RERA Act, the allottees were
well within their rights to accept the delayed performance without
foregoing their right to interest for delayed possession. The possession
th th
was offered to the allottees on 13 April, 2021 and taken on 18 June,
2021, which was permitted under Section 18 of RERA Act.
41. As the terms of the agreement provided for the possession to be
handed over by February, 2016, the Appellate Tribunal has rightly
directed payment of interest from March, 2016 till handing over of
possession.
42. The contention of Mr. Engineer is that Section 18 of RERA Act
has no role to play in determining what is the agreed date, which has to
be interpreted in terms of Section 55 of Contract Act. In view of the
discussion above, the said contention is unacceptable. Going further
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and dealing with the same, it needs to be noted that the claim for
interest is to be filed with the Regulatory Authority as opposed to the
Adjudicatory Authority, which is tasked with the function of
adjudicating compensation. Section 38 of RERA Act confers the power
on the Regulatory Authority to impose penalty or interest for
contravention of obligations by the promoters, the allottees etc or the
rules or regulations made thereunder.
43. Rule 6 of Maharashtra Real Estate (Regulation and
Development) (Recovery of Interest, Penalty, Compensation, Fine
payable, Forms of Complaints and Appeal, etc.) Rules, 2017 provides
for manner of filing complaints with the Authority and the manner of
holding of inquiry by the Authority and Rule 6(2)(c) provides that on
the date so fixed, the Authority to explain the Respondent or his
authorized representative about the alleged contravention and if the
Respondent pleads guilty, the Authority shall record the plea and pass
such orders including the imposition of penalty and if he does not
plead guilty and contests then the Authority must demand explanation
from him. Rule 6(2)(h) provides that where upon consideration of
evidence produced before it, the Authority is satisfied that the
Respondent is in contravention of provisions of Act or rules and
regulations made therein, it shall pass such orders including imposition
of penalty as it may think fit and if not, dismiss the complaint. The
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provisions indicate the summary nature of inquiry contemplated to be
conducted while deciding Section 18 complaint.
44. The Hon’ble Apex Court in Newtech Promoters and Developers
(P) Ltd. (supra), considered whether the jurisdiction to direct
return/refund of amount to the allottee under Sections 12, 14, 18 and
19 of RERA Act vests with the Regulatory Authority or Adjudicating
Authority. It noted the delineation of jurisdiction conferred upon the
Adjudicating Authority and Regulatory Authority under RERA Act. It
held in paragraph 76 as under:
“76. The further submission made by the learned
counsel for the appellants is that the return of the
amount adversely impacts the promoter and such a
question can be looked into by the adjudicating officer in
the better prospective. The submission has no
foundation for the reason that the legislative intention
and mandate is clear that Section 18(1) is an indefeasible
right of the allottee to get a return of the amount on
demand if he promoter is unable to hand over
possession in terms of the agreement for sale or failed
to complete the project by the date specified and the
justification which the promoter wants to tender as his
defence as to why the withdrawal of the amount under
the scheme of the Act may not be justified appears to
be insignificant and the Regulatory Authority with
summary nature of scrutiny of undisputed facts may
determine the refund of the amount which the allottee
has deposited, while seeking withdrawal from the
project, with interest, that too has been prescribed
under the Act, as in the instant case, the State of Uttar
Pradesh has prescribed MCLR +1% leaving no discretion
to the Authority and can also claim compensation as per
the procedure prescribed under Section 71(3) read with
Section 72 of the Act.”
45. The decision makes it clear that the legislative intent was to
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invest the Regulatory Authority with the jurisdiction to decide the
complaints under Section 18 of RERA Act by conducting summary
nature of scrutiny of undisputed facts, which may not fit in the scheme
of determination of agreed date of possession in context of Section 55
of Contract Act, which would require an adjudicating process.
46. Perusal of the statutory provisions of RERA Act would indicate
that the date referable to Section 18(1) of the Act as the date specified
in the agreement is sacrosanct and where the project is ongoing and
covered by the RERA Act, the only manner in which the extension can
be sought is under Section 6 of RERA Act by extension of registration.
Section 18 of RERA Act confers an unqualified absolute right upon the
allottee to accept delayed performance without foregoing their right
to claim compensation for every month of delay, which right is not
affected by non issuance of notice of intention to claim compensation.
The first substantial question of law is answered accordingly. In light
of the discussion above, the Appellate Authority has rightly granted
interest for every month of delayed performance.
47. In so far as the second question of law as to the overriding effect
of Section 18 of RERA Act qua Section 55 of Contract Act, the
contention of Mr. Engineer is that there is no conflict between the two
provisions as the question is what is the agreed date for handing over
possession as the revision of timelines was pre-RERA. In Newtech
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Promoters and Developers Pvt Ltd (supra), the Hon’ble Apex Court
considered whether RERA Act is retrospective or retroactive in its
operation and legal consequences and held in paragraph 40 as under:
“40. The clear and unambiguous language of the statute
is retroactive in operation and by applying purposive
interpretation rule of statutory construction, only one
result is possible i.e. the legislature consciously enacted a
retroactive statute to ensure sale of plot, apartment or
building, real estate project is one in an efficient and
transparent manner so that the interest of consumers in
the real estate sector is protected by all means and
Sections 13, 18(1) and 19(4) are all beneficial provisions
for safeguarding the pecuniary interest of the
consumers/allottees. In the given circumstances, if the
Act is held prospective then the adjudicatory mechanism
under Section 31 would not be available to any of the
allottees for an ongoing project. Thus it negates the
contention of the promoters regarding the contractual
terms having an overriding effect over the retrospective
applicability of the Act, even on facts of this case.”
48. The Hon’ble Apex Court has held that RERA Act being retroactive
will apply after getting the ongoing projects and future projects
registered under Section 3 to prospectively follow the mandate of
RERA Act and specifically negated the contention of the contractual
terms having an overriding effect over the retrospective applicability
of the Act.
49. The retroactive nature of RERA Act would result in creating new
obligations under Section 18 applicable to the flat purchaser’s
agreement. Section 18 confers a right on the allottees to claim interest
for every month of delay, where the possession is not handed over by
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the due date, by continuing with the project. To express Section 18 of
RERA Act in the language of Section 55 of Contract Act, is that even
though the flat purchaser’s agreement is voidable at the option of the
allottee as the possession was not handed over by due date, by
continuing with the project, the allottee accepts the performance at a
time other than that agreed. The distinction between Section 18 of
RERA Act and Section 55 of Contract Act comes upon such acceptance
and where Section 18 confers right upon the allottee to continue with
the project and be entitled to claim interest for every month of
delayed possession, Section 55 permits compensation to be claimed
only when he gives notice to the promoter of his intention to do so.
Whereas Section 18 of RERA Act gives an unqualified absolute
statutory right to claim interest unimpeded by any condition, Section
55 of Contract Act lays fetters on that right making it subject to giving
notice of intention to claim compensation. The inconsistency between
the two provisions appears on the aspect of right to claim
compensation.
50. RERA Act being a special enactment will prevail over Contract
Act, a general law. Section 89 of RERA Act gives it an overriding effect
over anything inconsistent with the other laws and the retroactive
application of RERA Act would impose an obligation on the promoter
to pay interest for the delayed possession computed from the date of
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handing over possession as specified in the agreement even in the
absence of any notice to the promoter by the allottee of its intention
to do so. The decisions cited by Mr. Engineer analysing the provisions
of Section 55 of Contract Act did not arise from consideration of
Section 18 of RERA Act making the decisions distinguishable on facts.
51. Coming to the third question of law as to whether the force
majeure events listed in the contract could be ignored, Covid 19
pandemic falls within the ambit of force majeure clause. The date of
handing over possession under the agreement for sale was February,
2016. Subsequently by communications, the Promoter revised the
timelines and as per RERA registration, the date of handing over
possession was December, 2019. Section 32 of Contract Act governs
the position when the performance is impacted by force majeure
event. The force majeure event of Covid-19 was subsequent to the due
date of performance by the Appellant and did not impact the
performance of the contract by the Promoter.
th
52. Mr. Engineer has emphasised on the RERA Order dated 18 May,
2020 seeking exclusion of period of six months which was clarified to
be treated as moratorium period for purpose of calculating interest
under Section 18 of RERA. In M/s. Pragatej Builders and Developers
11
Pvt Ltd vs Abhishek Anju Sukhadia , the Co-ordinate Bench of this
rd
11 Second Appeal No. 688 of 2023 and Second Appeal No. 689 of 2023, decided on 23 January,
2024.
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Court has considered the circulars issued by MahaRERA for moratorium
during Covid-19 pandemic. It held that where the possession was to be
handed over before the Covid-19 pandemic has held that the
subsequent Covid-19 pandemic, lockdown cannot come to the aid of
the promoter for claiming any relief for payment of interest and it
cannot seek to take advantage of Covid 19 pandemic to escape the
liability to pay interest. As the issue is settled by the decision of the Co-
ordinate Bench, the same does not constitute substantial question of
law.
53. In light of the above discussion, the substantial questions of law
are answered as under:
(a) Under the provisions of Section 18 of RERA Act,
the handing over possession as per terms of
agreement or as per the date specified is sacrosanct
remaining unqualified by any contingencies outside
the terms of the agreement and is not affected by
the acceptance of delayed performance. The allottee
would be well within their statutory right to claim
interest for every month of delayed possession for
the period specified in the flat purchaser’s
agreement till the date of handing over possession.
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(b) Whereas Section 18 of RERA Act gives an
unqualified absolute statutory right to claim interest
unimpeded by any condition, Section 55 of Contract
Act lays fetters on that right making it subject to
giving notice of intention to claim compensation. The
inconsistency between the two provisions is on the
aspect of claim of compensation. RERA Act being a
special enactment will prevail over Contract Act, a
general law. Section 89 of RERA Act gives it an
overriding effect over anything inconsistent with the
other laws and the retroactive application of RERA
Act would impose an obligation on the promoter to
pay interest for the delayed possession computed
from the date of handing over possession as
specified in the agreement even in the absence of
any notice to the promoter by the allottee of its
intention to do so.
(c) The aspect of seeking benefit of moratorium is
covered by decision of this Court in M/s. Pragatej
Builders and Developers Pvt. Ltd. vs. Abhishek Anju
Sukhadia (supra) and being settled does not give rise
to substantial question of law.
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54. In light of the substantial questions of law answered as above,
the Second Appeal stands dismissed.
55. In view of above, nothing survives for consideration in pending
Applications, if any, and the same stand disposed of.
[Sharmila U. Deshmukh, J.]
56. At this stage, learned counsel appearing for Appellant seeks
relief of stay of execution proceedings for period of four weeks from
today. Though said request is opposed by learned counsel appearing
for Respondent considering that the statement was operating during
the pendency of Second Appeal, the execution proceedings to be
th
deferred by period of four weeks from 24 June, 2026.
[Sharmila U. Deshmukh, J.]
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