Promoter's Pre-Deposit Can Be Released To Homebuyer After Promoter's Appeal Fails: Maharashtra REAT

The Maharashtra Real Estate Appellate Tribunal has ruled that a promoter's pre-deposit made while challenging an order can be released to the allottee (homebuyer) once the appeal does not survive.

The tribunal observed that the pre-deposit safeguards the amount already determined in the allottee's favour. It also prevents the allottee from having to go “from pillar to post” to recover the amount if the promoter's appeal fails.    

The Tribunal, comprising Chairperson S.S. Shinde and Administrative Member Shrikant M. Deshpande, allowed the allottee to withdraw the pre-deposit made by P.R. Builders & Developers after rejecting its authorised partner Sachin Prakash Dhavle's plea to condone a 674-day delay in challenging the order passed in non-compliance proceedings. 

With the delay plea rejected, the appeal itself did not survive. The tribunal then considered Bhagwat's application seeking withdrawal of the amount deposited by the promoter under the proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016.

Explaining the purpose of the pre-deposit requirement, the tribunal observed that the provision is intended to safeguard the amount already determined by the Authority while the promoter challenges the order.

It noted that if the appeal ultimately fails, the allottee should not be left to undertake another recovery exercise for an amount that has already been determined in his favour.

The Tribunal observed:

“The said proviso reflects the wisdom of the legislature to ensure that the money which has been computed by the Authority at least must be safeguarded if the promoter intends to prefer an appeal before the Tribunal and in case, appeal fails at a later stage, it becomes difficult for the allottee to get the amount recovered which has been determined by the Authority and to avoid the allottee requiring to go from pillar to post for recovery of the amount that has been determined by the Authority, in fact, belongs to the allottee at a later stage could be safeguarded from all the miseries which come forward against him. Therefore, it is imperative that once the appeal filed by the promoter is dismissed the amount deposited by the promoter which actually belongs to the allottee is required to be allowed to be withdrawn by the allottee.”

The dispute arose from a complaint filed on March 3, 2020 by homebuyer Atul Dilip Bhagwat against promoter M/s P.R. Builders & Developers, represented by authorised partner Sachin Prakash Dhavle.

The Maharashtra Real Estate Regulatory Authority (Maharashtra RERA) passed an order on Bhagwat's complaint on December 4, 2023. When the promoter failed to comply, Bhagwat initiated non-compliance proceedings, following which the Adjudicating Officer passed a further order on April 8, 2024.

Recovery proceedings followed. The promoter's property was attached on September 29, 2025, and on April 1, 2026, an order was passed for its sale.

Dhavle then approached the Maharashtra Real Estate Appellate Tribunal against the April 8, 2024 order, with a delay of 674 days.

Seeking condonation, Dhavle argued that the firm had not received summons and notices, one of the main partners was outstation, and the illness and death of his grandmother had caused mental distress. He also attributed the delay to an oversight in approaching counsel and obtaining instructions.

Bhagwat opposed the plea, arguing that the promoter had remained absent earlier and approached the Tribunal only after attachment and sale proceedings had substantially progressed. He also pointed out that no medical records, death certificate or other documents supported the reasons given for the delay.

The Tribunal found the explanation insufficient, noting the absence of supporting material and the promoter's conduct throughout the proceedings. By then, the allottee had already reached the final stage of securing the benefit of the December 4, 2023 order.

It said condoning the delay at that stage would force the allottee into another round of litigation and make him go “from pillar to post” for recovery of the amount already determined in his favour.

The Maharashtra REAT then considered Bhagwat's application to withdraw the promoter's pre-deposit under the proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016.

It held that the pre-deposit safeguards the amount already determined by the Authority while the promoter pursues an appeal. Once the appeal fails, the allottee should not be forced into another recovery process for the same amount.

Accordingly, the Maharashtra REAT rejected the delay-condonation application, held that the appeal did not survive, disposed of the connected applications, and directed release of the promoter's pre-deposit to the allottee.

For Appellant/applicant (Sachin Prakash Dhavle): Advocate Raheel Malik.

For Respondent/allottee (Atul Dilip Bhagwat): Advocate Nilesh Borate.