MahaRERA Ruling: Builder Ordered to Refund Booking Amount After Home Loan Denial
Mumbai’s Maharashtra Real Estate Regulatory Authority (MahaRERA) tribunal has ordered Aishwarya Avant Builders LLP to refund a couple’s booking amount with interest after they withdrew from a housing project due to loan issues.
R S Pillai and his wife R R Pillai had booked a flat in the under-construction Avant Heritage project in Jogeshwari in 2019. Valued at Rs 1.15 crore, they paid Rs 13.50 lakh as part of the booking. However, their loan application was rejected because the developer issued a no-objection letter only in R R Pillai’s name, not both applicants. Unable to proceed without the loan, the couple requested a refund, which the developer did not honor.
Initially, MahaRERA ruled in January 2021 that a refund was not possible under section 13 of the Real Estate (Regulation and Development) Act, advising both parties to sign a sale agreement. If not registered, the developer would need to refund the money. The developer ignored this order, prompting the Pillais to approach the Maharashtra Real Estate Appellate Tribunal.
In September 2023, the tribunal overturned MahaRERA’s earlier decision, directing the developer to return Rs 13.50 lakh along with 2% interest. The tribunal highlighted that under section 13 of RERA, a promoter cannot collect more than 10% of the apartment’s cost without a written agreement. The developer had violated this by demanding additional payments.
The promoter claimed the booking was under a special discount scheme and argued that the couple was liable for the full price if payments were not timely. The tribunal, however, ruled there was no provision in RERA allowing the developer to forfeit the booking amount due to cancellation.