The Bombay High Court has delivered an important judgment reinforcing homebuyer rights under the Real Estate (Regulation and Development) Act (RERA). Justice Madhav Jamdar ruled that buyers who continue with delayed housing projects are entitled to monthly interest until actual possession is handed over. The court dismissed petitions filed by Runwal Constructions in a dispute involving the Runwal Infinity project in Mulund, where possession allegedly remained delayed for years. Relying on Supreme Court precedents, the court held that statutory protections under Section 18(1) of RERA cannot be overridden by contractual clauses or force majeure arguments.

Bombay High Court RERA Ruling: Homebuyers Entitled to Interest for Every Month of Project Delay

The Bombay High Court has reaffirmed that homebuyers who remain invested in delayed housing projects are entitled to monthly interest until possession is delivered, while dismissing petitions filed by Runwal Constructions in a long-running Mulund housing dispute.

The Bombay High Court has delivered a significant ruling strengthening homebuyer protections under the Real Estate (Regulation and Development) Act (RERA), holding that buyers are entitled to interest for every month of project delay until actual possession is handed over.

In its June 8 judgment, a single-judge bench of Justice Madhav Jamdar dismissed petitions filed by Runwal Constructions concerning flats in Mulund where possession allegedly remained pending for nearly 16 years beyond the promised handover date. The decision is expected to have wider implications for delayed housing projects across India.

The court held that homebuyers who choose not to withdraw from a delayed project retain an unconditional right to receive interest under Section 18(1) of RERA until possession is actually delivered. According to the judgment, this statutory protection cannot be defeated through contractual provisions or force majeure claims advanced by developers.

Justice Madhav Jamdar Relies on Supreme Court Precedents

While interpreting Section 18(1) of RERA, Justice Madhav Jamdar observed that flat purchasers who continue with a project despite delays are entitled to compensation in the form of interest for every month of delay.

The judgment referred to earlier Supreme Court decisions involving Imperia Structures Ltd and Newtech Promoters and Developers. According to the High Court, the apex court has already clarified that the right to receive interest for delayed possession is absolute and not dependent upon contractual clauses or force majeure contentions.

Force majeure is a legal doctrine that allows parties to seek relief from contractual obligations when extraordinary and unforeseen events, such as war, conflict, natural disasters, or major disruptions, make performance impossible. However, the court held that such claims could not override statutory protections granted to homebuyers under RERA.

Runwal Infinity Project and Tribunal Orders

The dispute arose from orders passed by the RERA Appellate Tribunal concerning the Mulund residential project known as Runwal Infinity (Runwal Sanctuary).

According to court records, homebuyers booked flats in the project between 2005 and 2007 and paid substantial consideration amounts. Despite the passage of several years, possession remained pending, leading to litigation before regulatory authorities.

The RERA Appellate Tribunal had directed Runwal Constructions to pay interest at the rate of 10.05 per cent from February 1, 2014, until actual possession was handed over. The Bombay High Court upheld the Tribunal’s order and also retained directions requiring completion of the buildings within specified timelines.

The court further noted that even after nearly two decades from the execution of the agreements and approximately sixteen years after the agreed possession date, possession had still not been delivered to affected purchasers.

Court Criticises Developer’s Arguments in Tower C Appeals

In two appeals relating to Tower C, the High Court rejected the developer’s attempt to invoke the doctrine of frustration of contract under Section 56 of the Indian Contract Act.

The doctrine generally applies when unforeseen and unavoidable circumstances make contractual performance impossible. However, the court observed that the submissions advanced in the present matter did not satisfy those legal requirements.

Justice Madhav Jamdar recorded that escalation in construction costs could not constitute a valid ground for frustration of contract. The court also directed payment of costs of ₹1 lakh each to affected flat buyers in the Tower C appeals within four weeks.

The judgment additionally recorded serious observations regarding permission obtained from the Brihanmumbai Municipal Corporation (BMC) for the demolition of the partially constructed Tower C. The court described the circumstances as “shocking” and noted that assurances had allegedly been given regarding protection of purchasers’ rights during reconstruction.

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Wider Implications for Homebuyers and Developers

Senior Advocate Atul Damle, appearing for Runwal Constructions, argued that contractual clauses permitted extension of possession timelines due to force majeure events and litigation affecting the project.

The High Court rejected those submissions, holding that authorities functioning under RERA cannot rewrite or revise agreed possession dates. Legal experts believe the ruling reinforces homebuyers’ statutory rights and may influence future disputes involving delayed residential projects.

For thousands of homebuyers awaiting possession across various developments, the judgment serves as a strong reminder that delays can carry financial consequences for developers. As regulatory enforcement under RERA continues to evolve, the decision is likely to be closely studied by builders, buyers, and legal practitioners alike.

Sprouts News will continue tracking major judicial and regulatory developments affecting homebuyers, real estate projects, and consumer rights across India.

Readers’ Appeal

Have you faced delayed possession, RERA disputes, or real estate-related grievances? Share documents, information, or experiences with the Sprouts News Investigation Team. Contact Unmesh Gujarathi on 9322755098.

Editorial Note:

This article is based on publicly available FIR records, court case references, and reports published by multiple media organisations. The information is presented in the context of ongoing investigations and public interest reporting. Sprouts News does not make any judicial determination regarding the individuals mentioned and does not intend to defame any person or organisation. Any individual seeking clarification or wishing to provide an official response may contact the editorial team with verifiable documentation. The information is presented for journalistic and informational purposes.