Homebuyers' Right To Interest Under RERA For Delayed Possession Is Independent, Indefeasible: Bombay High Court

The Bombay High Court has held that a homebuyer's right to receive interest for delayed possession under the Real Estate (Regulation and Development) Act, 2016 (RERA) is an independent and indefeasible statutory right.

The court held that this right cannot be defeated by relying on the principle under the Indian Contract Act that may restrict a claim for compensation where delayed performance is accepted without reserving such a claim.

A Single Bench of Justice N.J. Jamadar delivered the ruling while dismissing a second appeal filed by Kiyana Estate LLP against flat buyers Tina Dharamshey and another allottee.

The appeal challenged a common judgment dated June 24, 2025, by which the Maharashtra Real Estate Appellate Tribunal dismissed Kiyana's appeals against an order passed by the Maharashtra Real Estate Regulatory Authority (MahaRERA). The order was for delayed possession of flats.

The Appellate Tribunal subsequently directed the release of ₹29.10 lakh deposited by Kiyana to the allottees, along with the interest accrued on the amount.

The builder initially approached HC against REAT orders, which were dismissed.

Kiyana then approached the Bombay High Court in a second appeal.

The developer argued that although possession was delayed, the buyers accepted it without informing Kiyana that they intended to claim compensation for the delay.

Relying on Section 55 of the Indian Contract Act, 1872, Kiyana argued that accepting delayed performance without reserving a claim for compensation prevented the buyers from subsequently claiming compensation for the delayed period.

The developer contended that this principle should apply despite Section 18 of RERA, which provides an allottee with a remedy when possession is delayed.

The court rejected the argument.

The court held that Section 89 of RERA contains a non-obstante clause and gives RERA overriding effect over other laws.

It further held that an allottee's right to receive interest for every month of delay until possession is handed over in accordance with the agreement is an independent and indefeasible right.

“First, in view of the provisions contained in Section 89 of the RERA 2016, which incorporates a non-obstante clause, the provisions of RERA 2016 shall have an overriding effect over any other law for the time being in force. Second, the right of the allottee to get interest for every month of delay till the handing over of possession in accordance with the agreement between the parties, is an independent and indefeasible right of the allottee,” the Court held.

The Court relied on the Supreme Court's judgment in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P., which held that Section 18(1) gives an allottee an indefeasible right to seek the statutory relief where the promoter fails to hand over possession in accordance with the agreement.

It also relied on the Supreme Court's judgment in Imperia Structures Ltd. v. Anil Patni, which held that Section 18 confers an unqualified right upon an allottee to seek refund and interest where the promoter fails to complete or is unable to give possession by the date specified in the agreement.

The Court noted that where an allottee does not intend to withdraw from the project, the proviso to Section 18(1) entitles the allottee to interest for every month of delay until possession is handed over.

It further held that Section 18(1) is a beneficial provision intended to safeguard the interests of allottees.

"If the submission sought to be canvassed by Mr. Kamat is accepted, the very object of the enactment of RERA 2016 would be defeated,” the Court observed.

The High Court also noted that Kiyana had previously challenged the same common judgment of the Appellate Tribunal in a secind appeal

That appeal was dismissed on October 8, 2025, after the Court held that no question of law, much less a substantial question of law, arose for consideration.

In that earlier appeal, the High Court had also considered the Occupation Certificate dated April 10, 2023.

It noted that the certificate was subject to the condition regarding adequate water supply and that Kiyana had not shown compliance with the condition before handing over possession.

Kiyana, thereafter, filed a special leave petition before the Supreme Court.

The SLP was dismissed as withdrawn on February 11, 2026, after Kiyana sought permission to withdraw the appeal.

In the present appeal, Kiyana raised the fresh argument based on Section 55 of the Contract Act.

The High Court held that this argument also did not give rise to any question of law, much less a substantial question of law.

The Court accordingly dismissed the second appeal.

For Appellant (Kiyana Estate LLP): Senior Advocate Ashish Kamat with Advocates Abir P. and Kartik Joshi.

For Respondents (Tina Dharamshey and another): Advocate Manish Gala.