Maharashtra REAT Tribunal Holds New Promoter Liable For Delay Interest After Taking Over Stalled Project

The Maharashtra Real Estate Appellate Tribunal (REAT) has held that a builder taking over a stalled project under Section 15 of the Real Estate (Regulation and Development) Act, 2016 (RERA) inherits the previous promoter's liability to pay interest for delayed possession.

A bench of Chairperson Justice S. S. Shinde and Member Dr. Rajagopal Devara observed:

“Having accepted the pending obligations of the erstwhile Promoter under Section 15(2) of the RERA Act 2016, Respondent No.2 is liable to discharge the statutory obligation to pay interest for delayed possession.”

The tribunal also held that consent letters signed by a majority of allottees cannot bind homebuyers who refused to sign them. It observed:

“The statutory rights of Allottees cannot be curtailed by such arrangement made through Letter of Understanding.”

The homebuyers had booked a 625 sq. ft. flat in the US Open project in Mumbai in 2011, with possession promised by December 2015. They paid ₹1,05,80,514, but the original promoter, Nirmal Lifestyle Limited, failed to complete the project.

Ricardo Constructions Private Limited took over the project in June 2019 under a Development Agreement. The homebuyers, however, refused to sign the consent letters circulated as part of the arrangement. They instead approached MahaRERA seeking interest for the delay in possession and rental compensation.

MahaRERA clubbed their complaint with those filed by the Association of Allottees and passed a common order directing compliance with an interim order. The homebuyers then challenged the decision before the tribunal.

Ricardo Constructions maintained that it could not be held liable in a complaint to which it was not a party. It also pointed out that around 78% of the allottees had signed consent letters accepting a one-time compensation arrangement. The company further relied on the extension of the project's registration until March 31, 2026.

The tribunal was not persuaded. It held that taking over the project meant accepting the original promoter's pending obligations under Section 15(2) of RERA. The change in promoter did not, by itself, push back the agreed possession deadline. Neither could an arrangement accepted by the majority take away the rights of those who had refused to sign it.

The tribunal directed Ricardo Constructions to pay interest on ₹1,05,80,514 from January 1, 2016, until actual possession, at SBI's highest MCLR plus 2% per annum. It also ordered the company to pay ₹25,000 in costs.