In a landmark ruling favoring homebuyers, the Maharashtra Real Estate Appellate Tribunal (MREAT) has directed Mumbai-based Ekta Parksville Homes Pvt Ltd, a subsidiary of Ekta World, to refund the total amount paid by homebuyers, including pre-EMI, stamp duty, registration charges, and loan settlement fees. The tribunal ruled that the builder failed to deliver possession within the stipulated timeframe, leaving homebuyers with financial and legal hardships.
This ruling sets a significant precedent for homebuyers struggling with delayed possession and seeking a refund of their investment along with compensation.
Background of the Case
Homebuyers Hemal Mehta and Shibani Mehta had booked a flat in Ekta Parksville, a residential project in Vasai, near Mumbai, for ₹32.17 lakh. The Agreement for Sale was executed on December 2, 2014, with a promised possession date of December 2016.
To finance the purchase, the homebuyers availed a home loan from HDFC Bank under a 20:80 subvention scheme, under which:
- The homebuyers paid ₹11 lakh upfront.
- HDFC Bank disbursed ₹23.80 lakh to the developer.
- The developer was responsible for paying the pre-EMI until possession was handed over.
However, the developer failed to deliver possession on time, and homebuyers had to bear additional financial burdens, including EMIs, stamp duty, and loan settlement charges.
MahaRERA Proceedings: Homebuyers First Approach the Regulator
Frustrated by the non-delivery of possession, the homebuyers approached MahaRERA to seek a refund of the entire amount paid, along with interest.
Developer’s Defense Before MahaRERA
- The developer argued that possession was delayed due to unforeseen circumstances (force majeure).
- Claimed that homebuyers had paid only ₹8.43 lakh and that the remaining amount was paid by HDFC Bank.
- Contended that fit-out possession had been offered in February 2019.
After hearing all parties, MahaRERA ruled in favor of the homebuyers on August 9, 2021, directing the developer to refund the homebuyers with interest from January 1, 2017, until the actual realization of the refund amount.
Homebuyers Appeal to MREAT for Additional Compensation
Despite MahaRERA’s ruling, the homebuyers were not satisfied and approached MREAT, seeking a refund of the entire amount paid, including:
- EMIs paid to HDFC Bank.
- Stamp duty (₹1.93 lakh).
- Registration fees (₹30,000).
- MVAT (₹33,024).
- Possession charges (₹1.69 lakh).
- Loan processing and incidental expenses.
In total, the homebuyers incurred costs of ₹36.42 lakh, including loan repayment and government levies.
Developer’s Arguments Before MREAT
The developer opposed the refund on multiple grounds, stating that:
- Force Majeure Delays – Completion was delayed due to external factors, including:
- Third-party issues in subdivision of land layouts.
- Municipal stop-work notices and court orders.
- Regulatory approval delays and COVID-19 lockdown.
- Fit-out Possession Was Offered in 2019 – The builder argued that possession was already offered in 2019, so further liability should not apply.
- Project Was Completed in 2023 – The Occupation Certificate (OC) was received in July 2023, making claims for a refund unjustified.
- Homebuyers Were Investors, Not Genuine Purchasers – The developer claimed that the homebuyers were investors looking for a refund, rather than actual end-users who needed the flat.
MREAT’s Landmark Judgment: Full Refund Ordered
In a major victory for homebuyers, MREAT rejected the developer’s claims and ordered a full refund of the paid amount, including all statutory and incidental charges.
Key Points from the Judgment:
- The developer failed to fulfill contractual obligations under the Agreement for Sale.
- Homebuyers suffered financial losses due to possession delays, forcing them to approach regulators and tribunals.
- The developer did not reimburse the pre-EMI, violating the subvention scheme agreement.
- The homebuyers had to settle the HDFC Bank loan on their own, despite the developer’s original promise to cover pre-EMI payments.
Final Tribunal Order:
- The developer must refund the entire amount paid by homebuyers.
- The refund must include:
- Stamp duty, registration charges, MVAT, and other taxes.
- Brokerage and incidental loan processing charges.
- Pre-EMI and home loan settlement charges.
- Interest to be paid from the date of each payment until the refund is realized.
- The developer was given 41 days to comply with the order.
Developer’s Response: Planning to Challenge the Judgment
Following the ruling, Ekta Parksville Homes Pvt Ltd stated that they are consulting their attorneys at Wadia Ghandy & Co. to challenge the MREAT judgment in a higher court.
Meanwhile, HDFC Bank has not responded to queries regarding the loan disbursement and pre-EMI issues.
Legal Implications of the Judgment
Advocate Nilesh Gala, who represented the homebuyers, stated that this ruling sets a strong precedent for similar cases where:
- Homebuyers face years of possession delays.
- Builders fail to honor pre-EMI payment commitments.
- Stamp duty, registration charges, and other home-buying expenses become non-refundable due to construction delays.
This case highlights the growing accountability of real estate developers under MahaRERA and MREAT, ensuring that homebuyers are not financially burdened due to delays beyond their control.
Conclusion
The MREAT judgment of February 17, 2025, is a groundbreaking decision that strengthens homebuyers’ rights against delayed possession and financial losses. It signals to builders that failure to meet contractual commitments can lead to full refunds, covering loan-related expenses, taxes, and other financial burdens borne by the buyers.
As developers prepare to challenge the ruling, this case remains a landmark example of how regulatory authorities are ensuring justice for homebuyers in Maharashtra.
