Homebuyer Labelled As 'Investor' To Undermine Rights: Bombay High Court Dismisses Developer Appeal

The Bombay High Court has dismissed a developer's second appeal, holding that it could not justify cancelling a flat allotment and pushing the homebuyer toward a refund by treating her as an "investor" instead of honoring the allotment.

The court found that, in this case, calling the buyer an “investor” was not an innocent choice of words. She had already paid 30% of the price for a clearly identified flat. Describing her as an investor was a way to deny her the apartment and steer her toward a refund.

Justice N. J. Jamadar upheld an order of the Maharashtra Real Estate Appellate Tribunal directing Sai Enterprises to allot a 775 sq ft flat to Sangeeta Ravi Punjabi and pay interest on the amount she had paid.

“From a perusal of the Development Agreement dated October 17, 2017, it also becomes abundantly clear that Respondent No. 2 and the Appellant intended to run roughshod over the rights of the Allottees by terming them as investors. True, in the ultimate analysis, the nomenclature is of no consequence. However, the repeated reference to the Allottees, from whom the first developer had accepted valuable consideration many years ago, and had also issued the allotment letter with particulars of the apartment and the dimensions thereof, as 'investors' betrayed a devious design to trample upon the rights of the Allottees,” the court said.

The dispute goes back to September 25, 2010, when Super Constructions allotted Flat No. 1701 in a Malad project for ₹42.62 lakh. Sangeeta Ravi Punjabi paid Rs 12.78 lakh, about 30% of the price.

The project did not move forward. Over the years, through agreements executed in April 2013, April 2016 and October 2017, Sai Enterprises stepped in as the second developer.

On March 23, 2018, the first developer told the allottee that the project had stalled and asked her to seek a refund. She did not agree. In letters sent in April and June 2018, she said she was ready to pay the balance and take the flat.

Even so, Sai Enterprises issued a termination letter on January 29, 2019. It pointed to the passage of time and a sharp rise in construction costs, and offered to return Rs. 12.78 lakh with interest at 10.55% per annum.

The homebuyer approached the Maharashtra Real Estate Regulatory Authority. On August 3, 2021, the authority directed the parties to act in line with the development agreement but did not grant possession.

She appealed. On November 26, 2025, the appellate tribunal directed the developers to allot the flat, execute an agreement for sale and pay interest on the amount already paid.

Sai Enterprises challenged that order, arguing that it was only required to settle the claims of “investors”, that there was no direct contract with the allottee, that no such flat was available, and that performance had become impossible.

The homebuyer, in response, maintained that she remained an allottee with a subsisting right to the flat. She also pointed to the developer's conduct. Flats shown as unsold on September 30, 2025, were later reflected as sold on November 14, 2025, just before the tribunal's decision.

The court was not persuaded by the developer's reading of the development agreement. It said the obligation undertaken could not be limited to refunding money and extended to the allottee's claim.

That position, the court noted, ran directly against the scheme of the Real Estate (Regulation and Development) Act, 2016. Accepting such a defence would strip the protections meant for homebuyers.

“Under no circumstances, the promoter can be permitted to present a fait accompli to an Allottee in flagrant violation of the contractual and statutory obligations,” the court said.

It also pointed out that the choice under the law rests with the allottee, whether to seek a refund or insist on possession. A developer cannot force a refund.

Rising costs or financial strain do not change that position. The court said financial unviability cannot sustain a plea of impossibility of performance.

The claim that the flat could no longer be allotted did not find favour either. The court termed the plea “disingenuous”, noting the timing of the sale of flats shortly before the tribunal's order.

Finding no substantial question of law, the court dismissed the appeal and directed Sai Enterprises to pay costs of Rs. 1 lakh to Sangeeta Ravi Punjabi within four weeks.

For Appellant (Sai Enterprises): Advocates Rubin Vakil, Abir P, Kartik Joshi.

For Respondent (Sangeeta Ravi Punjabi): Advocates Manish Gala, Minil Shah, Nilesh Gala.