SA-472-2021 (final).doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

SECOND APPEAL NO. 472 OF 2021

CCI Projects Private Limited

Office at Rivali Park, CCI Compound, Western

Express Highway, Borivali East,

Mumbai 400 066.

]

]

]

]...Appellant

Versus

1.Mr. Sriram Krishnan

having address at

Krishna, E-404, Vasant Sagar Complex

Thakur Village, Kandivali (East), Mumbai –

400101.

]

]

]

]

]

]

2.Mrs. Vidya Sriram

having address at

Krishna, E-404, Vasant Sagar Complex,

Thakur Village, Kandivali (East), Mumbai –

400101.

]

]

]

]

]

]

3. Mr. Abhijit Kumar Phanikumar

having office at Rivali Park,

CCI Compound, Western Express Highway,

Borivali (East), Mumbai 400 066.

]

]

]

]

]

4.Ms. Nandini Hiten Khatau

having Office at Rivali Park,

CCI Compound, Western Express Highway,

Borivali (East), Mumbai – 400 066.

]

]

]

]

]

5.Ms. Maithili Hiten Khatau

having Office at Rivali Park,

CCI Compound, Western Express Highway,

Borivali (East), Mumbai 400 066.

]

]

]

]

]

6.Mr. Pradip Haridas Udeshi

having Office at Rivali Park,

]

]

]

Sairaj 1 of 40 2026:BHC-AS:9415

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CCI Compound, Western Express Highway,

Borivali (East), Mumbai 400 066.

]

]

7.Ms. Nayna Bharat Pasta

having office at Rivali Park,

CCI Compound, Western Express Highway,

Borivali (East), Mumbai – 400 066.

]

]

]

]

]…Respondents

——————

Mr. Rubin Vakil, Mr. Abir P. and Mr. Kartik Joshi i/b Wadia Ghandy and Co. for

Appellant.

Mr. Bhavin Gada i/b Mr. Chirag Desai for Respondent Nos. 1 and 2.

——————

Coram : Sharmila U. Deshmukh, J.

Reserved on : 22

nd

April, 2026.

Pronounced on : 18

th

June, 2026.

Judgment :

1.The Second Appeal is filed at the instance of the promoter,

challenging the judgment dated 10

th

March, 2021 passed by

Maharashtra Real Estate Appellate Tribunal, Mumbai [for short,

“Appellate Tribunal”] quashing the order dated 31

st

January, 2019 in

Complaint No. CC006000000056115 passed by MahaRERA and

directing the promoters to pay interest for delayed possession. For

sake of brevity, the parties are referred to as Promoter and allottees.

2.By order dated 5

th

March, 2026, this Court framed the following

substantial questions of law:

“(i) Whether in view of provisions of Section 55 of the

Indian Contract Act, 1872, the acceptance of delayed

performance would disentitle the promisee from

compensation claimed on account of non-performance of

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contract at the agreed time?

(ii) Whether the provisions of Section 18 of the Real

Estate (Regulation and Development) Act, 2016 will

override the provisions of Section 55 of the Indian

Contract Act, 1872?

(iii) Whether in view of provisions of Section 32 of Indian

Contract Act, 1872, the force majeure events listed in the

contract could have been ignored?”

(iv) Whether the Appeals would be maintainable at

instance of Respondents in view of the concession given

by the Respondents that the issue of interest will be

considered subsequent to the completion of the project?

3.The facts of the case are that allottees filed a complaint under

Section 31 of the Real Estate (Regulation and Development) Act, 2016

[for short, “RERA Act”] with the Maharashtra Real Estate Regulatory

Authority [for short, “1

st

Authority”] stating that the allottees had

booked an apartment in building known as Wintergreen in the project

developed by the Promoters. On 18

th

November, 2014, an agreement

was entered into between the promoters and the allottees and as per

Clause 17 of the agreement, the promoters agreed to give possession

to the allottees on or before 30

th

June, 2017.

4.The grievance was that till the filing of the complaint, the

possession of the flat was not given. The total flat consideration was

Rs. 1,95,06,060/- and the allottees had paid part consideration of Rs.

1,85,32,899/- and apart from that had also paid the sum of Rs.

10,09,220/- towards stamp duty and registration charges on 18

th

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September, 2014. The service tax, VAT, GST and TDS amounts were also

paid and thus the allottees have paid sum of Rs. 2,05,89,715/- to the

promoter.

5.As per the project registration under RERA, the proposed date of

completion of project was 31

st

December, 2018 and revised proposed

date of completion was 31

st

December, 2019. The allottees sought the

relief of handing over possession of the apartments along with

payment of interest for delayed possession from 1

st

July, 2017 till the

handing over possession.

6.By order dated 31

st

January, 2019, the 1

st

Authority noted the

submission of promoters that the construction work of project could

not be completed for reasons beyond the promoter’s control and that

the construction would be completed before the revised completion

date set out in the registration web page. The submission of learned

counsel for complainants before the 1

st

Authority was that in

Complaint No. CC006000000054636, the 1

st

Authority had directed the

Promoter to handover possession by December, 2019 allowing the

Promoter in the interest of completing the project to complete the

project first with liberty to allottees to demand interest at an

appropriate stage under Section 18 of RERA Act and that similar order

be passed in the present complaint also. The 1

st

Authority directed the

promoter to handover the apartments with occupancy certificate to

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allottees before 31

st

December, 2019 and that the allottees shall be at

liberty to demand interest at an appropriate stage under Section 18 of

the RERA Act for delay in completing the project and disposed of the

complaint.

7. As against this, the allottees approached the Appellate Tribunal

and by the impugned judgment dated 10

th

March, 2021, the Appellate

Authority quashed and set aside the order of the RERA Authority

directing the following :

“iii) Complaint No. CC006000000056115 is allowed

as under :

a) Promoters shall pay an interest @ State Bank of

India’s highest Marginal Cost of Lending Rate plus

2% to Allottees on the amount paid to Promoters for

delayed period of possession from 1

st

July, 2017 till

handing over possession of flat to Allottees.

b) Promoters shall pay Rs. 25,000/- towards cost to

the Allottees and shall bear own costs.”

8.The Appellate Authority held that there is no authentic evidence

to show that the allottees had accepted the revised date of possession

or had acquiesced or waived their right to interest. It held that the

allottees stayed with the project despite the promoters failing to give

the possession as per the agreed date and gets the statutory right to

claim interest for delayed possession. It held that the promoters

unilaterally extended the date of possession which is not binding on

the allottees. In a concurrent judgment, the non-judicial member

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agreed with the observations and conclusion recorded by the judicial

member that as the promoters have failed to give possession on the

date i.e. 30

th

June, 2017 agreed in the Agreement for Sale registered

on 18

th

November, 2014 for non-justifiable reasons, the allottees are

entitled to interest for the delayed period of possession.

9.Mr. Rubin Vakil, learned counsel appearing for Appellants would

submit that the date mentioned in Section 18 of RERA Act is the

contractual agreement between the parties and Section 55 of the

Indian Contract Act, 1872 [for short, “the Contract Act”] takes note of

the fact that the party is accepting delayed possession. He would point

out that Section 55 deals with performance of reciprocal promises and

where delayed possession is accepted, it in fact, constitutes addendum

to main agreement accepting the alteration of date. He would submit

that under Section 62 of the Contract Act, the parties by conduct can

alter the original contract and in the present case, the allottees by their

conduct had altered the dates specified in the Agreement for sale. He

would further point out that clause 17 of the Agreement for sale

provided that possession shall be handed over on or before 30

th

June,

2017 automatically stand extended when delay is in beyond the control

of the promoter.

10.He would further point out the communication addressed by the

promoter to the allottees updating the allottees about the challenges

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faced in the subject project and revising the date of possession from

March, 2018 to December, 2018. He submits that the first

communication was addressed on 15

th

April, 2015 and there was no

response or denial to the said communication by allottees which

constitutes an acceptance of revised timelines. He submits that by

communication of 9

th

June, 2017, the Promoter communicated a

revised payment schedule to the allottees which was also accepted and

payments were made accordingly.

11.He submits that provisions of Section 88 of RERA Act provides

that the provisions of RERA Act is in addition to and not in derogation

to other enactment and there is no conflict between the provisions of

RERA Act and Contract Act. He submits that Section 18 of RERA Act is

compensatory in nature and provides for payment of interest without

any proof of loss ocassioned on account of delayed possession. He

submits that it is only the obligation to prove loss which is obviated and

not the provisions of the Contract Act.

12. He would further point out that the initial dates in the schedule

of payments provided for payment on the basis of slabwise

construction and from 30

th

June, 2015 was based on fixed dates and

thereafter, payments were made by the allottees as per the revised

timelines which constitutes an acceptance of delayed possession. He

submits that by their conduct, the allottees have given go-by to the

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original date. He would further point out that payments were made

even beyond 30

th

June, 2017, which was the date set out in the

agreement for sale for handing over the possession.

13.He would further submit that the order of 1

st

authority is an

order in invitum and the Appellate Authority did not consider the issue

of maintainability of appeal though raised. He submits that the only

remedy available to the Appellate Authority was to remand the matter

and by failing to do so as the order was in invitum, the promoter’s right

to set up the case of acceptance of delayed possession and

consequences thereof as provided under Section 55 of the Contract

Act was taken away. He points out that in the written submissions

before the Appellate Authority, specific plea of maintainability was

raised. He would further point out that the impugned order does not

consider the aspect of concession granted by the allottees by inviting

the order. He submits that the promoter’s remedy of opportunity of

being heard before the 1

st

Authority cannot be substituted by right of

hearing granted at the appellate stage. He would further submit that

the allottees have not canvassed any submission that no concession

was made by them before the Appellate Authority and even in the

present proceedings, there is no such submission canvassed. In

support, he relies upon the following decisions :

Era Realtors Private Limited vs. Prakash Shah and

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Another

1

Institute of Chartered Accountants of India vs. L. K.

Ratna and Others

2

Sports Authority of India and Another vs. Dr. Kulbir

Singh Rana

3

Rajasthan State Industrial Development and

Investment Corporation and Another vs. Diamond

and Gem Development Corporation Limited and

Another

4

Municipal Corporation of Delhi vs. Gurnam Kaur

5

14.Per contra, Mr. Gada, learned counsel appearing for the Allottees

would submit that the complaint before the 1

st

Authority was filed in

September, 2018 and the order came to be passed in January, 2019 and

till that time, there was no reply filed by the promoter and no stand

taken and therefore, now it is too late to contend that they have lost an

opportunity for placing their stand before the 1

st

Authority. He would

submit that in Affidavit-in-reply filed before the Appellate Authority,

there is no ground of Section 55 of the Contract Act taken and only

case, which was set up was delay beyond their control and waiver and

acquiescence. He submits that for the first time, in the present Second

Appeal, the ground of Section 55 of the Contract Act is taken.

15.He would further submit that whenever the demand was made

1 Second Appeal (St.) No. 27241 of 2023, decided on 14

th

March, 2024.

2 (1986) 4 SCC 537.

3 (2025) 10 SCC 819.

4 (2013) 5 SCC 470.

5 (1989) 1 SCC 101.

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by the promoter, the payments were made by the allottees and there is

no submission that there is any delay in payment. He would further

submit that the communications which were addressed to the allottees

were in the year 2015 and 2017 and 85% of the amount was demanded

and already paid. He would further point out the additional Affidavit

filed before the Appellate Authority by the promoters contending that

project is at the stage of nearing completion which Affidavit was filed

in November, 2020 and therefore, even at the Appellate stage, the

project was not complete.

16.He would further submit that the provisions of Section 55 of the

Contract Act cannot be read for the purpose of determining date of

possession as envisaged by Section 18 of RERA Act. He submits that by

reason of the complaint being filed, there is already an objection raised

and even the applicable test of Section 55 of the Contract Act stands

satisfied as the complaint makes a specific reference for payment of

interest. He submits that the provisions of Section 55 of the Contract

Act provides that at the time of acceptance of performance, the notice

is required to be given and in the present case, the possession was

given in the year 2021 and the complaint would constitute notice to

claim compensation.

17.He submits that the provisions of RERA Act does not extend the

date mentioned in the Agreement for sale which is sacrosanct. He

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would further submit that in the communication of 15

th

April, 2015, the

promoter does not seek for consent and neither mentions that

payment timelines would be revised. He submits that as and when

demand was made, the payments were made. He would further submit

that by the time, communication of 2017 was issued, the allottees had

already paid 90% of consideration. He would submit that the Appellate

Authority has appropriately dealt with the case of waiver which was set

up by the promoter.

18.He would submit that being part of the same project and as

order was already passed by the 1

st

Authority in identical matter, the 1

st

Authority was requested to pass same order which would not

constitute concession. He submits that the allottees were entitled to

the remedy of appeal and there can be no estoppel against law. He

would further submit that there was no argument canvassed on the

aspect of concession and by way of amendment to Appeal memo, the

said issue is raised and being question of fact or mixed question of fact

or law cannot be raised in the Second Appeal. He submits that

concession is what is given up and cannot be withdrawn. He submits

that the right to claim interest was not given up by the allottees. He

would further submit that even the defence of Section 55 of the

Contract Act have been raised for the first time in the Second Appeal,

which is not pure question of law.

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19.He would submit that in any event, Section 55 of the Contract

Act cannot override the provisions of RERA Act in view of Section 89 of

RERA Act. He submits that allottees have filed the appeal in 2019 and

even at the appellate stage, as the possession was not given, there is

no question of Section 55 of the Contract Act being triggered.

20.He would further submit that the promoter did not argue the

aspect of concession before the Appellate Court and in fact, had

argued delay and would point out the findings of the Appellate

Authority dealing with the submissions canvassed. He submits that by

way of amendment, in the year 2023, the issue of Section 55 of the

Contract Act and the order being an order in invitum has been raised.

He would further submit that the arguments canvassed that no

opportunity of taking the defense of Section 55 of the Contract Act by

reason of the concession given by the allottees is not a ground taken

in the present Second Appeal. He submits that the decision in the case

of Newtech Promoters and Developers Private Limited vs. State of

Uttar Pradesh

6

covers the issue raised in the present case that Section

18 of RERA Act gives an unqualified right to the allottees to stay with

the project and demand interest. He would submit that the concession

which is being argued would be a benefit which is altogether given up

and not a benefit which is deferred and therefore, it cannot be said

6 (2021) 18 SCC 1.

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that the Appeal is not maintainable. In support, he relies upon the

following decisions :

Newtech Promoters and Developers Private Limited

vs. State of Uttar Pradesh and Others

(supra)

Imperia Structures Limited vs. Anil Patni and

Another

7

Director of Elementary Education, Odisha vs.

Pramod Kumar Sahoo

8

Pathan Murtazakhan Dadamkhan and Others vs.

Pathan Pirkhan Amdumiyan (dead) by LRs.

9

Krishnapasuba Rao Kundapur (dead) after him his

L.R. and Another vs. Dattatraya Krishnaji Karani

10

Babu Ram alias Durga Prasad vs. Indra Pal Singh

(dead) by LRs.

11

K. Chelliah Servai vs. P. Muthusami Servai

12

Hardayal Gir vs. Sohna Ram

13

Boodireddy Chandraiah and Others vs. Arigela

Laxmi and Another

14

Municipal Committee, Amritsar vs. Hazara Singh

15

Director of Settlements, A.P. and Others vs. Mr.

Apparao and Another

16

M/s. Pragatej Builders and Developers Pvt. Ltd. vs.

7 (2020) 10 SCC 783.

8 (2019) 10 SCC 674.

9 1993 Supp (2) SCC 518.

10 1965 SCC OnLine SC 251.

11 (1998) 6 SCC 358.

12 1995 Supp. (1) SCC 202.

13 1970(3) SCC 635.

14 (2007) 8 SCC 155.

15 (1975) 1 SCC 794.

16 (2002) 4 SCC 638.

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Mr. Abhishek Anuj Sukhadia and Another

17

21.In rejoinder, Mr. Vakil would submit that the written submissions

filed before the Appellate Authority raised the issue of maintainability.

He would further submit that in the Second Appeal, what is required to

be set out is the substantial question of law and not the grounds on

which the order is assailed as in the case of First Appeal. He submits

that once the question of law is framed, the Court can decide the same.

He would submit that by reason of concession given by the allottees,

the promoter’s statutory right to raise appropriate defence before the

1

st

authority is taken away which would also constitute violation of

principles of natural justice. He submits that once the promoters have

acted on the concession, the allottees are estopped from claiming

interest. He submits that by reason of concession granted, there was

no question of raising the issue of Section 55 of the Contract Act. He

submits that the provisions of Section 55 of the Contract Act will have

to be considered for the purpose of deciding the date of performance

which can be determined by the regulatory authority under RERA Act.

He would further submit that act of acceptance of the delayed

performance is implied from acceptance of revised payment schedule.

He would submit that decision in the case of Newtech Promoters and

Developers Private Limited vs. State of Uttar Pradesh and Others

17 Second Appeal No. 688 of 2023 and Second Appeal No. 689 of 2023, decided on 23

rd

January,

2024.

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(supra), the issue as to the applicability of Section 55 of the Contract

Act was not dealt with and is therefore, distinguishable.

REASONS AND CONCLUSION :

22.In identical facts arising in Second Appeal No. 479 of 2021,

identical questions of law were raised except the fourth substantial

question of law as regards the maintainability of appeal in view of

concession granted by the allottees. Both the Second Appeals were

listed together from time to time, however, were argued separately.

The submissions canvassed on the questions of law are broadly similar

and as the questions stand answered in Second Appeal No. 479 of

2021, the findings are reproduced hereinbelow with necessary

variations. This Court in Second Appeal No. 479 of 2021 have answered

the first three substantial question of law, which would also answer the

first three substantial questions of law raised in this Appeal as under.

23.The first substantial question of law framed by this Court seeks

an answer as to whether there was acceptance of delayed performance

and secondly, whether such acceptance of delayed performance

disentitles the allottees from claiming compensation under Section 18

of RERA Act in the absence of notice by the allottees of their intention

to do so as contemplated by Section 55 of the Contract Act.

24.The RERA Act was enacted for regulating and promoting real

estate sector and to infuse transparency in the sale of real estate

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projects and to protect the interest of consumer in the real estate

sector providing mechanism under the Act itself for adjudicating the

grievances. The scheme of RERA Act statutorily regulates the

development project creating rights and obligations aimed at ensuring

that the flat purchaser’s interest is protected by imposing obligations

on the promoters to complete the development project in a time

bound schedule and conferring various rights on the allottees upon

failure of the promoter to perform its obligations.

25. Section 18 of RERA Act, reads as under :

“18. Return of amount and compensation.—(1) If the

promoter fails to complete or is unable to give possession

of an apartment, plot or building,—

(a) in accordance with the terms of the agreement for

sale or, as the case may be, duly completed by the date

specified therein; or

(b) due to discontinuance of his business as a developer

on account of suspension or revocation of the

registration under this Act or for any other reason, he

shall be liable on demand to the allottees, in case the

allottee wishes to withdraw from the project, without

prejudice to any other remedy available, to return the

amount received by him in respect of that apartment,

plot, building, as the case may be, with interest at such

rate as may be prescribed in this behalf including

compensation in the manner as provided under this Act:

Provided that where an allottee does not intend to

withdraw from the project, he shall be paid, by the

promoter, interest for every month of delay, till the

handing over of the possession, at such rate as may be

prescribed.

(2) The promoter shall compensate the allottees in case

of any loss caused to him due to defective title of the

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land, on which the project is being developed or has been

developed, in the manner as provided under this Act, and

the claim for compensation under this subsection shall

not be barred by limitation provided under any law for

the time being in force.

(3) If the promoter fails to discharge any other obligations

imposed on him under this Act or the rules or regulations

made thereunder or in accordance with the terms and

conditions of the agreement for sale, he shall be liable to

pay such compensation to the allottees, in the manner as

provided under this Act.”

26.Section 18 of RERA Act codifies the summary nature of the

proceedings by discharging the onus of proof of loss upon failure by

the Promoter to hand over possession as per terms of the agreement

or date specified therein. It gives an option to the allottee to exit from

the project with refund of the amounts paid alongwith interest

including compensation or to stay in the project and get interest for

every month of delay till handing over possession. Section 18 thus

confers a statutory right of the allottees to interest for the delayed

possession, if they choose to remain with the project.

27.Section 55 of the Contract Act deals with the consequences of

failure to perform the contract at fixed time in cases where time is of

essence and where time is not of essence. Section 55 reads as under:

“55. Effect of failure to perform at fixed time, in

contract in which time is essential.— When a party to a

contract promises to do a certain thing at or before a

specified time, or certain things at or before specified

times, and fails to do any such thing at or before the

specified time, the contract, or so much of it as has not

been performed, becomes voidable at the option of the

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promisee, if the intention of the parties was that time

should be of the essence of the contract.

Effect of such failure when time is not essential.—If it

was not the intention of the parties that time should be

of the essence of the contract, the contract does not

become voidable by the failure to do such thing at or

before the specified time; but the promisee is entitled to

compensation from the promisor for any loss occasioned

to him by such failure.

Effect of acceptance of performance at time other

than that agreed upon.—If, in case of a contract

voidable on account of the promisor’s failure to perform

his promise at the time agreed, the promisee accepts

performance of such promise at any time other than that

agreed, the promisee cannot claim compensation for any

loss occasioned by the non-performance of the promise

at the time agreed, unless, at the time of such

acceptance, he gives notice to the promisor of his

intention to do so.”

28.In cases where time is of essence, Section 55 of the Contract Act

provides that the contract, if not performed, becomes voidable at the

option of the promisee, who forgoes the right to compensation for any

loss occasioned by the non-performance in absence of notice at the

time of acceptance of delayed performance. Where time is not of

essence, the contract is not voidable by failure to perform at specified

time, however the promisee is entitled to compensation.

29.In the present case, the flat purchaser’s agreement has been

executed under Maharashtra Ownership Flats Act, 1963 [for short,

“MOFA”]. Section 4 of MOFA prescribes the particulars of flat

purchaser agreement to include inter alia the date on which the

possession shall be handed over to the flat purchaser. The statutory

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provisions of RERA Act providing for registration of the project

requires the promoter to give the time period within which the project

shall be completed and provides for consequences of failure to hand

over possession as per the date duly specified. Clause 17 of the flat

purchaser’s agreement sets outs that the possession of the premises

shall be given by 30

th

June, 2017. The consequence of failure to hand

over possession is provided in Clause 18 giving the purchaser the

option to terminate the agreement. The clauses in the agreement

makes it clear that the intention of the parties was to make time

essence of contract. As the flat purchaser’s contract is of the nature

demanding compliance with the fixed date for performance and

provides consequence for non-compliance, time is essence of the

contract.

30.The consequence of failure to hand over possession by the date

specified in the agreement in respect of real estate project is provided

under Section 18 of RERA Act. Plain reading of Section 18 does not

indicate that the rights conferred on the allottee upon failure of the

promoter to hand over possession by the date duly specified is

qualified by any contingency. Neither any provision of RERA Act has

been demonstrated which would have the effect of qualifying the

rights under Section 18.

31.Section 18 of RERA Act gives option to the allottees upon failure

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of the promoter to hand over possession by the date specified in the

agreement or as per the terms of the agreement either to withdraw

from the project with refund of amounts paid along with interest

including compensation or to stay with the project and get interest for

every month of delay. In the context of real estate project, where the

performance of promise of the promoter is to hand over possession by

a specified date, the right given by Section 18 of RERA Act to continue

with the project is nothing but permitting acceptance of delayed

performance without foregoing the right to claim interest for every

month of delay.

32.Section 55 of the Contract Act permits the same option to the

promisee when it gives the right to the promisee to accept the

performance of the promise at a date other than that agreed but

qualifies the right to claim compensation only upon giving notice while

accepting delayed performance.

33.If the right under Section 18 of RERA Act is an unqualified

absolute right, the acceptance of revised timelines and delayed

performance cannot lay fetters on the right to claim interest. The

Hon’ble Apex Court in Imperia Structures Limited vs. Anil Patni

18

while

interpreting Section 18 of RERA Act has held in paragraph 25 as under:

“25. In terms of Section 18 of the RERA Act, if a promoter

fails to complete or is unable to give possession of an

18 (2020) 10 SCC 783.

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apartment duly completed by the date specified in the

agreement, the promoter would be liable, on demand, to

return the amount received by him in respect of that

apartment if the allottee wishes to withdraw from the

Project. Such right of an allottee is specifically made

“without prejudice to any other remedy available to him”.

The right so given to the allottee is unqualified and if

availed, the money deposited by the allottee has to be

refunded with interest at such rate as may be prescribed.

The proviso to Section 18(1) contemplates a situation

where the allottee does not intend to withdraw from the

Project. In that case he is entitled to and must be paid

interest for every month of delay till handing over of the

possession. It is up to the allottee to proceed either

under Section 18(1) or under proviso to Section 18(1)

…….”.

34. The above interpretation of Section 18 of RERA Act was noted in

the case of Newtech Promoters and Developers Private Limited vs.

State of U.P. (supra). The Hon’ble Apex Court was considering interalia

the issues as to the retroactive operation of RERA Act and the

jurisdiction of the Regulatory Authority to direct refund under the

provisions of RERA Act including Section 18 and other ancillary issues.

The Hon’ble Apex Court considered the statutory scheme of RERA Act

and observed in paragraph 24 as under:

“24. The unqualified right of the allottee to seek refund

referred under Section 18(1)(a) and Section 19(4) of the

Act is not dependent on any contingencies or stipulations

thereof. It appears that the legislature has consciously

provided this right of refund on demand as an

unconditional absolute right to the allottee, if the

promoter fails to give possession of the apartment, plot

or building within the time stipulated under the terms of

the agreement regardless of unforeseen events or stay

orders of the court/tribunal, which is in either way not

attributable to the allottee/homebuyer, the promoter is

under an obligation to refund the amount on demand

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with interest at the rate prescribed by the State

Government including compensation in the manner

provided under the Act with the proviso that if the

allottee does not wish to withdraw from the project, he

shall be entitled for interest for the period of delay till

handing over possession at the rate prescribed.”

(emphasis supplied).

35.The Hon’ble Apex Court has interpreted the statutory provisions

of Section 18 and Section 19(4) of RERA Act noting the legislative

intent. It has held that Section 18 of RERA Act confers an unqualified,

unconditional absolute right upon the allottee to claim under Section

18 of RERA Act. Though it is sought to be contended, that the decision

in Newtech Promoters and Developers Pvt. Ltd. vs. State of UP

(supra) was not founded on considerations which arise in the present

case, the Hon’ble Apex Court has interpreted the statutory scheme of

the RERA Act to hold that the right of allottee under Section 18(1)(a) of

the Act is unqualified right not affected by any contingencies or

stipulations or an unforeseen event or even stay orders of the Court or

Tribunals. On appreciation of the legislative intent, it places the right

of allottee to seek refund on demand beyond the impact of any

enactment by interpreting the right to be an unqualified absolute

right. The interpretation of Section 18 of RERA Act by the Hon’ble

Apex Court would bind this Court.

36.As the Hon’ble Apex Court has held the provisions of Section 18

to be beyond the pale of any qualification or condition, Section 55 of

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Contract making the right to demand interest conditional upon giving

notice to the promisor of his intention, would have the effect of

qualifying the absolute right of the allottee under Section 18 of RERA

Act, which runs contrary to the statutory provisions and the

interpretation by the Hon’ble Apex Court.

37.Under the provisions of Section 18 of RERA Act, primacy is given

to the due date specified in the agreement by linking the failure to

hand over possession to the terms of agreement or as per the date

specified, whereas Section 55 of Contract Act contemplates a situation

of extension of time de-hors the date specified in the agreement. The

unqualified absolute right of the allottee stands statutorily recognized

in Section 18 of RERA Act and the continuation with the project, which

if expressed in the language of Section 55 of the Contract Act

constitutes acceptance of delayed performance, does not impact the

unfettered statutory right conferred by Section 18 of RERA Act to

claim interest.

38.The Appellate Authority has come to a finding of fact that there

is no authentic evidence to show that the allottees accepted revised

date of possession or that the allottees have in fact acquiesced. The

revised timelines were unilateral and the contention of Mr. Vakil of

acceptance of delayed performance is premised on the basis that by

accepting the revised dates of payment in accordance with revised

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schedule, the allottees have accepted the delayed performance by

their conduct. The payment schedule agreed between the parties

enumerates that the initial payments from Serial No 1 to 9 were

construction linked payments and would show that at Serial No 9, the

casting work of terrace slab would commence. From Serial No 10 to 15,

the payments are linked to specified dates. For Serial No 10 to 15 to

apply, the commencement of casting work of terrace slab was required

to be completed. If the construction itself was delayed, the payments

at Serial No 1 to 9 would be delayed and consequently the subsequent

payments.

39.The acceptance of delayed possession is premised on the

communications of 15

th

April, 2015, 14

th

March, 2017 and 19

th

August,

2017. The contents of the communications dated 15

th

April, 2015 and

14

th

March, 2017 indicate that the same is mere information to the

allottees about the reasons for the delay and an assurance of handing

over final possession by March, 2018. In the communication of 19

th

August, 2017, the allottees are informed about the RERA date of

handing over possession of December, 2019 and that they would

endeavour to complete the project in or around December, 2018 and

that such early completion would lead to earlier demands for payment.

40.The communications, at the highest conveys information about

the delay and gives assurance to complete the project. The revised

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timelines are couched in a manner so as to be in nature of information

requiring no further acts by the allottees.

41. Even accepting that there was acceptance of revised date of

possession, considering Section 18 of RERA Act, the allottees were

well within their rights to accept the delayed performance without

foregoing their right to interest for delayed possession.

42.As the terms of the agreement provided for the possession to be

handed over by 30

th

June, 2017, the Appellate Tribunal has rightly

directed payment of interest from 1

st

July, 2017 till handing over of

possession.

43.The contention of Mr. Vakil is that the date mentioned in Section

18 is contractual agreement and Section 55 of the Contract Act

constitutes an addendum to the main agreement. The provisions of

Section 18 of RERA Act would militate against such contention as

primacy is given to the date specified in the agreement, which under

Section 4 of MOFA is required to be in writing. The purported

alteration based on conduct of parties cannot be accepted as an

addendum to the main agreement. Accepting such contention would

require an inquiry for determining the agreed date of possession for

purpose of Section 18 of RERA Act. It needs to be noted that the claim

for interest is to be filed with the Regulatory Authority as opposed to

the Adjudicatory Authority, which is tasked with the function of

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adjudicating compensation. Section 38 of RERA Act confers the power

on the Regulatory Authority to impose penalty or interest for

contravention of obligations by the promoters, the allottees etc or the

rules or regulations made thereunder.

44.Rule 6 of Maharashtra Real Estate (Regulation and Development)

(Recovery of Interest, Penalty, Compensation, Fine payable, Forms of

Complaints and Appeal, etc.) Rules, 2017 provides for manner of filing

complaints with the Authority and the manner of holding of inquiry by

the Authority and Rule 6(2)(c) provides that on the date so fixed, the

Authority to explain the Respondent or his authorized representative

about the alleged contravention and if the Respondent pleads guilty,

the Authority shall record the plea and pass such orders including the

imposition of penalty and if he does not plead guilty and contests then

the Authority must demand explanation from him. Rule 6(2)(h)

provides that where upon consideration of evidence produced before

it, the Authority is satisfied that the Respondent is in contravention of

provisions of Act or rules and regulations made therein, it shall pass

such orders including imposition of penalty as it may think fit and if

not, dismiss the complaint. The provisions indicate the summary nature

of inquiry contemplated to be conducted while deciding Section 18

complaint.

45.The Hon’ble Apex Court in Newtech Promoters and Developers

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(P) Ltd. (supra), considered whether the jurisdiction to direct

return/refund of amount to the allottee under Sections 12, 14, 18 and

19 of RERA Act vests with the Regulatory Authority or Adjudicating

Authority. It noted the delineation of jurisdiction conferred upon the

Adjudicating Authority and Regulatory Authority under RERA Act. It

held in paragraph 76 as under:

“76. The further submission made by the learned

counsel for the appellants is that the return of the

amount adversely impacts the promoter and such a

question can be looked into by the adjudicating officer in

the better prospective. The submission has no

foundation for the reason that the legislative intention

and mandate is clear that Section 18(1) is an indefeasible

right of the allottee to get a return of the amount on

demand if he promoter is unable to hand over

possession in terms of the agreement for sale or failed

to complete the project by the date specified and the

justification which the promoter wants to tender as his

defence as to why the withdrawal of the amount under

the scheme of the Act may not be justified appears to

be insignificant and the Regulatory Authority with

summary nature of scrutiny of undisputed facts may

determine the refund of the amount which the allottee

has deposited, while seeking withdrawal from the

project, with interest, that too has been prescribed

under the Act, as in the instant case, the State of Uttar

Pradesh has prescribed MCLR +1% leaving no discretion

to the Authority and can also claim compensation as per

the procedure prescribed under Section 71(3) read with

Section 72 of the Act.”

46.The decision makes it clear that the legislative intent was to

invest the Regulatory Authority with the jurisdiction to decide the

complaints under Section 18 by conducting summary nature of scrutiny

of undisputed facts, which may not fit in the scheme of determination

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of agreed date of possession in context of Section 55 of Contract Act,

which would require an adjudicating process.

47.Perusal of the statutory provisions of RERA Act would indicate

that the date referable to Section 18(1) of the Act as the date specified

in the agreement is sacrosanct and where the project is ongoing and

covered by the RERA Act, the only manner in which the extension can

be sought is under Section 6 of RERA Act by extension of registration.

Section 18 of RERA Act confers an unqualified absolute right upon the

allottee to accept delayed performance without foregoing their right

to claim compensation for every month of delay, which right is not

affected by non issuance of notice of intention to claim compensation.

The first substantial question of law is answered accordingly. In light

of the discussion above, the Appellate Authority has rightly granted

interest for every month of delayed performance.

48.In so far as the second question of law as to the overriding effect

of Section 18 of RERA Act qua Section 55 of Contract Act, the

contention of Mr. Vakil is that there is no conflict between the two

provisions as the question is what is the agreed date for handing over

possession as the revision of timelines was pre-RERA. In Newtech

Promoters and Developers Pvt Ltd (supra), the Hon’ble Apex Court

considered whether RERA Act is retrospective or retroactive in its

operation and legal consequences and held in paragraph 40 as under:

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“40. The clear and unambiguous language of the statute

is retroactive in operation and by applying purposive

interpretation rule of statutory construction, only one

result is possible i.e. the legislature consciously enacted a

retroactive statute to ensure sale of plot, apartment or

building, real estate project is one in an efficient and

transparent manner so that the interest of consumers in

the real estate sector is protected by all means and

Sections 13, 18(1) and 19(4) are all beneficial provisions

for safeguarding the pecuniary interest of the

consumers/allottees. In the given circumstances, if the

Act is held prospective then the adjudicatory mechanism

under Section 31 would not be available to any of the

allottees for an ongoing project. Thus it negates the

contention of the promoters regarding the contractual

terms having an overriding effect over the retrospective

applicability of the Act, even on facts of this case.”

49.The Hon’ble Apex Court has held that RERA Act being retroactive

will apply after getting the ongoing projects and future projects

registered under Section 3 to prospectively follow the mandate of

RERA Act and specifically negated the contention of the contractual

terms having an overriding effect over the retrospective applicability

of the Act.

50.The retroactive nature of RERA Act would result in creating new

obligations under Section 18 applicable to the flat purchaser’s

agreement. Section 18 confers a right on the allottees to claim interest

for every month of delay, where the possession is not handed over by

the due date, by continuing with the project. To express Section 18 of

RERA Act in the language of Section 55 of Contract Act, is that even

though the flat purchaser’s agreement is voidable at the option of the

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allottee as the possession was not handed over by due date, by

continuing with the project, the allottee accepts the performance at a

time other than that agreed. The distinction between Section 18 of

RERA Act and Section 55 of Contract Act, comes upon such acceptance

and where Section 18 confers right upon the allottee to continue with

the project and be entitled to claim interest for every month of

delayed possession, Section 55 permits compensation to be claimed

only when he gives notice to the promoter of his intention to do so.

Whereas Section 18 of RERA Act gives an unqualified absolute

statutory right to claim interest unimpeded by any condition, Section

55 of Contract Act lays fetters on that right making it subject to giving

notice of intention to claim compensation. The inconsistency between

the two provisions appears on the aspect of right to claim

compensation.

51. RERA Act being a special enactment will prevail over Contract

Act, a general law. Section 89 of RERA Act gives it an overriding effect

over anything inconsistent with the other laws and the retroactive

application of RERA Act would impose an obligation on the promoter

to pay interest for the delayed possession computed from the date of

handing over possession as specified in the agreement even in the

absence of any notice to the promoter by the allottee of its intention

to do so.

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52.Coming to the third question of law as to whether the force

majeure events listed in the contract could be ignored, Covid 19

pandemic falls within the ambit of force majeure clause. The date of

handing over possession under the agreement for sale was June, 2017

and as per RERA registration, the possession was to be handed over by

2019. The force majeure event of Covid-19 was subsequent to the due

date of performance by the Appellant and does not impact the

performance of the contract.

53. Mr. Vakil has emphasised on the RERA Order dated 18

th

May,

2020 seeking to exclude period of six months which was clarified to be

treated as moratorium period for purpose of calculating interest under

Section 18 of RERA Act. In M/s Pragatej Builders and Developers Pvt

Ltd vs Abhishek Anju Sukhadia (supra), the Co-ordinate Bench of this

Court considered the circulars issued by MahaRERA for moratorium

during Covid-19 pandemic. It held that where the possession was to be

handed over before the Covid 19 pandemic, the subsequent Covid 19

pandemic lockdown cannot come to the aid of the promoter for

claiming any relief for payment of interest and it cannot seek to take

advantage of Covid 19 pandemic to escape the liability to pay interest.

As the issue is settled by the decision of the Co-ordinate Bench, the

same does not constitute substantial question of law.

54.The fourth substantial question of law is the maintainability of

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Appeal as according to Mr. Vakil, the order of 1

st

Authority was passed

in view of the concession given by the allottees and thereafter the

allottees could not have appealed against the said order. He would

submit that the Appeal ought to have been remanded to the 1

st

Authority as the decision takes away the right of the promoter to raise

their defense to the complaint under Section 18 of RERA Act.

55. In the written submissions before the Appellate Authority, the

Promoters had pleaded, under the heading of “Appeal Misuse of Legal

Process”, that the allottees prayed for a similar order as passed in the

connected complaint and that the appeal is mala fide. There is no

specific plea raised to the maintainability of the appeal on the ground

of concession granted by the allottees and there is no pleading or

argument canvassed seeking remand of the matter to the 1

st

Authority,

which is sought to be pleaded for the first time in Second Appeal

proceedings. There is no foundation in the pleadings on maintainability

of Appeal in view of the purported concession granted by the allottees.

As there was no such pleading or argument of concession, the allottees

did not have the chance to meet the case of concession before the

Appellate Authority.

56.The allottees in the present case are identically placed in the

same project as the allottees in CC006000000054636, who had filed

identical complaint before the 1

st

Authority. Similar submissions were

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raised in the other complaint and as the 1

st

Authority had already

passed the order in the other complaint, the allottees requested for

similar order to be passed. The submission recorded in paragraph 3 of

the 1

st

Authority’s order reads as under:

“3. The learned counsel for the Complainants submitted

that MahaRERA in Complaint no. CC006000000054636,

has directed the Respondent to handover possession by

December, 2019 allowing the Respondent, in the interest

of completing the project, to complete the project first

with liberty to Complainants to demand interest at an

appropriate stage, as per the provisions of Section 18 of

the Real Estate (Regulation and Development) Act, 2016

and that similar order be passed in the present complaint

also. Further, he submitted that the Respondent be

directed to initiate process of society formation.”

57.The above submissions canvassed by learned counsel for

allottees was a plea of parity being fully aware of the earlier order and

that same consequences would follow. The request for identical order

does not explicitly abandon the right to interest and the intent was to

follow the same course as the allottees in other complaint. The

contention of Mr. Vakil is in fact an argument on estoppel and waiver of

right to file appeal, which principle is traceable to Section 96(3) of

Code of Civil Procedure, 1908 precluding the filing of appeal against a

consent decree. For estoppel to operate it must be shown that there

was express waiver, compromise or relinquishment of some benefit

which is now sought in the appeal. The submissions does not indicate

any express waiver by the allottees. The request for similar order is not

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a concession as there is no waiver or abandonment of right. Even

accepting that the submission of the Advocate for the allottees

constitutes a concession, the allottees had a right under Section 18 of

RERA Act to demand interest for every month of delayed possession

and deferment of the statutory right to demand interest, if accepted as

concession, amounts to concession given by the Advocate on question

of law, which would not preclude the allottees from filing the appeal as

there can be no estoppel against law.

58.Dealing with the citations relied upon by Mr. Vakil, the decision in

the case of Era Realtors Private Limited vs. Prakash Shah and

Another

19

was pressed into service in support of the contention that

the Appeal was not maintainable in view of the concession of the

allottees. In the case of Era Realtors Private Limited (supra), the

complaint was filed under Section 18 of RERA Act for a direction to

Developer to execute a registered Agreement for sale, to pay interest

for delayed possession and to pass GST credit on to the Respondents

therein. The RERA Authority directed handing over possession and

payment of interest on the amounts collected after May, 2017 with the

finding recorded that the amount post May, 2017 had already been

collected after executing registered agreement for sale in accordance

with Section 13 of RERA Act. The Appellate Authority was moved to

19 S.A. (St.) No. 27241 of 2023, decided on 14

th

March, 2024.

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the extent of denial of payment of interest before May, 2017, which

was entertained by the Appellate Tribunal. The contention before this

Court was that the Respondents specifically agreed before the

Regulatory Authority that the interest can be only paid after the

implementation of the RERA Act and therefore, the regulatory

authority directed the payment of interest post May, 2017. It is in such

facts where the Respondents therein gave up their claim for interest

prior to May, 2017 that this Court held that the Appeal was not

maintainable. Before the Appellate Authority, the Respondents therein

claimed that no such concession was given by them before the

Regulatory Authority and as the Respondent’s neither filed an

application before the Regulatory Authority complaining about

erroneous recording of concession nor any specific ground was raised

in Appeal, this Court held that the Appellate Authority could not have

entertained the Appeal. In the facts of that case, there was an express

waiver of the benefit by the Respondents which was thereafter,

questioned before the Appellate Authority on the ground that no such

concession was given. The present factual scenario is completely

distinguishable as there is no express waiver of any benefit.

59.The decision in the case of Institute of Chartered Accountants

of India vs. L. K. Ratna (supra) holds that if natural justice is violated at

first stage, the right of appeal is not so much a true right of appeal as a

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corrected initial hearing. Essentially, it holds that the defense of

natural justice before the Trial Court cannot be cured by giving a

hearing at the Appellate stage. There is no quarrel with the said

proposition. In the present case, the order of 1

st

authority notes the

submission of learned counsel for Promoter in the order of 31

st

January, 2019. It is not the case of Promoters that there was no

hearing which was given to them. The complaint was filed in

September, 2019 and there was an ample opportunity available to the

promoter to file their reply. In the hearing of 31

st

January, 2019, it is

not even the submission of promoter that the time be given for the

purpose of filing reply. It was open for the promoters to advance

arguments now sought to be raised before this Court for payment of

interest before the 1

st

Authority. The only submission canvassed is that

the construction work or project could not be completed for reasons

beyond the Promoter’s control. The order of 31

st

January, 2019 was not

passed without without giving an opportunity of hearing to the

promoter, merely on the basis of submissions of learned counsel

appearing for Allottees. The violation of principles of natural justice is

an afterthought raised in the present case.

60.The decision of Sports Authority of India vs. Dr. Kulbir Singh

Rana (supra) is on the aspect of maintainability of the Appeal, once the

concession has been given. As this Court has already held that the

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order of the 1

st

Appellate Authority was only on parity and not a

concession given, the decision does not assist the case of the

promoter. Similarly, the decision in the case of Rajasthan Industrial

Development and Investment Corporation vs. Diamond and Gem

Development Corporation Limited (supra) reiterates the principles of

estoppel which does not assist the case of the promoter.

61.In light of the above discussion, the substantial questions of law

are answered as under:

(a) Under the provisions of Section 18 of RERA Act,

the handing over possession as per terms of

agreement or as per the date specified is sacrosanct

remaining unqualified by any contingencies outside

the terms of the agreement and is not affected by

the acceptance of delayed performance. The allottee

would be well within their statutory right to claim

interest for every month of delayed possession for

the period specified in the flat purchaser’s

agreement till the date of handing over possession.

(b) Whereas Section 18 of RERA Act gives an

unqualified absolute statutory right to claim interest

unimpeded by any condition, Section 55 of Contract

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Act lays fetters on that right making it subject to

giving notice of intention to claim compensation. The

inconsistency between the two provisions is on the

aspect of claim of compensation. RERA Act being a

special enactment will prevail over Contract Act, a

general law. Section 89 of RERA Act gives it an

overriding effect over anything inconsistent with the

other laws and the retroactive application of RERA

Act would impose an obligation on the promoter to

pay interest for the delayed possession computed

from the date of handing over possession as

specified in the agreement even in the absence of

any notice to the promoter by the allottee of its

intention to do so.

(c) The aspect of seeking benefit of moratorium is

covered by decision of this Court in M/s. Pragatej

Builders and Developers Pvt. Ltd. vs. Abhishek Anju

Sukhadia (supra) and being settled does not give rise

to substantial question of law.

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(d) The submission of the allottees before the 1

st

authority was plea of parity and the request for

identical order does not explicitly abandon the right

to interest and for estoppel to operate, there must be

express waiver, compromise or relinquishment of the

benefit. The allottees have a right under Section 18 of

RERA Act to demand interest for every month of

delayed possession and deferment of the statutory

rights, if accepted, as concession, amounts to

concession given by the Advocate on question of law

which would not preclude the allottees from filing

the Appeal.

62.In light of the substantial questions of law answered as above,

the Second Appeal stands dismissed.

63.In view of above, nothing survives for consideration in pending

Applications, if any, and the same stand disposed of.

[Sharmila U. Deshmukh, J.]

64.At this stage, learned counsel appearing for the Appellant seeks

relief of stay of execution proceedings for period of four weeks from

today. Though the said request is opposed by learned counsel

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appearing for the Respondent, considering that the statement was

operating during the pendency of Second Appeal, the execution

proceedings to be deferred by period of four weeks from 24

th

June,

2026.

[Sharmila U. Deshmukh, J.]

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