Bombay High Court Permits Homebuyer to Withdraw Deposit During Builder's Appeal Under RERA

Mumbai, April 2: In a significant ruling favoring homebuyers, the Bombay High Court has held that a homebuyer can withdraw the amount deposited by a developer while an appeal is pending before the appellate tribunal under RERA.

Case Background

The case relates to a delayed housing project where the homebuyer had booked two flats and paid nearly ₹2 crore out of a total consideration exceeding ₹3 crore. The project did not meet the promised possession timeline, leading the buyer to seek a refund.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) had earlier directed the developer to refund the amount along with applicable interest under Section 18 of RERA, which provides relief in cases of project delays.

Builder's Appeal and Deposit

The builder filed an appeal before the appellate tribunal. As per Section 43(5) of RERA, developers are required to deposit a certain portion of the awarded amount before their appeal can be heard. The builder deposited the required sum.

During the proceedings, the tribunal permitted the homebuyer to withdraw this amount, subject to an undertaking that the money would be returned with interest if the builder's appeal succeeds. The builder challenged this direction before the High Court, arguing that allowing withdrawal during the appeal could complicate recovery later.

High Court's Observations

The High Court did not accept the builder's contention. It observed that the tribunal has the discretion to allow such withdrawals based on the facts of each case. The objective of the pre-deposit requirement is not only procedural but also to ensure that homebuyers are not left waiting indefinitely even after securing favourable orders from regulatory authorities.

The court further stated that a homebuyer and a developer are not on equal footing in such disputes. It noted that buyers often invest a large portion of their savings and may face financial pressure due to delays, while developers have access to greater financial resources. Keeping the deposited amount locked during the entire appeal period would not serve the purpose of providing timely relief.

Significance of the Ruling

This ruling provides crucial relief to homebuyers who have won refund orders against defaulting builders but face delays due to appeals. The High Court has affirmed that:

• Tribunals have discretion to allow withdrawal of deposited amounts

• Homebuyers should not be denied timely relief during appeal periods

• Safeguards remain in place (undertaking to return money with interest if builder succeeds)

• The buyer-developer relationship is inherently unequal, favoring the buyer's need for relief