Accepting Delayed Possession Does Not Waive Homebuyer's Right To Delay Interest: Maharashtra REAT

The Maharashtra Real Estate Appellate Tribunal (REAT) has recently ruled that a homebuyer's right to claim interest for delayed possession does not disappear merely because the buyer later takes possession or the project's RERA registration is extended.

The tribunal observed that accepting possession does not amount to waiver of the accrued right unless the homebuyer consciously and expressly relinquishes it.

A bench comprising Chairperson Justice S. S. Shinde and Member (A) Dr. Rajagopal Devara made the observation while dismissing an appeal filed by Kanakia Spaces Realty Pvt. Ltd. against a Maharashtra RERA order granting interest to a homebuyer for delayed possession of a flat in the “Levels” project at Malad (East), Mumbai.

The tribunal observed, “Acceptance of possession thereafter does not amount to waiver of such accrued statutory right unless there is a conscious express relinquishment thereof, which is absent in the present case.”

The dispute concerned Flat No. 3205 on the 32nd floor of 'C' Wing in the “Levels” project.

Panchgalle and Kanakia Spaces executed an Agreement for Sale on February 1, 2017, for a total consideration of ₹2,01,59,220. Under the agreement, possession was to be handed over by October 2018, with a six-month grace period, making March 2019 the agreed possession date.

Panchgalle had paid about 80% of the consideration, with the remaining amount payable when possession was handed over. The developer obtained the Occupancy Certificate on October 10, 2019 and handed over the flat on November 5, 2019. Panchgalle then approached MahaRERA on April 27, 2020, nearly five months after taking possession, seeking interest for the delay.

MahaRERA partly allowed his complaint on May 12, 2022 and granted interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016. Kanakia Spaces then challenged the order before the tribunal

The developer argued that Panchgalle had accepted possession after full and final settlement and without protest. According to Kanakia Spaces, no independent cause of action therefore remained for claiming interest for delayed possession.

The developer pointed out that the project's RERA registration was initially valid until October 31, 2019, but was later extended from time to time until April 30, 2021. It also relied on Clause 13 of the Agreement for Sale, which it said allowed a reasonable extension if the delay was caused by circumstances beyond its control.

Panchgalle, however, argued that he had met his obligations under the agreement, while the developer failed to hand over possession by the agreed date. He maintained that extending the project's RERA registration did not change the agreed possession date or free the developer from liability for the delay.

The tribunal rejected the developer's contention. It held that the entitlement to interest under Section 18 is founded on the promoter's failure to deliver possession within the agreed timeline.

“The said entitlement is not extinguished because possession is subsequently offered or because the project completion date stands revised for regulatory purposes,” the tribunal observed.

It added that obtaining the Occupancy Certificate later or extending the project's registration did not take away the allottee's accrued right to claim interest for the delayed period.

The tribunal also held that the possession date in the Agreement for Sale is “sacrosanct” and cannot be rewritten by RERA or the promoter without the allottee's consent. If possession is handed over after that date, the consequences under Section 18 follow.

It agreed with MahaRERA that Panchgalle's entitlement to interest had “crystallised” when the promoter failed to hand over possession within the agreed period and continued until possession was actually handed over.

The fact that Panchgalle subsequently accepted the flat did not, by itself, amount to waiver. The tribunal found no conscious and express relinquishment of the accrued statutory right in the present case.

The tribunal therefore found no reason to interfere with MahaRERA's order, dismissed Kanakia Spaces' appeal and directed the parties to bear their own costs

For Appellant (Kanakia Spaces Realty Pvt. Ltd.): Advocate Vikramjit Garewal.

For Respondent (Subhash Mahadappa Panchgalle): Advocate Aman Shukla.