Bombay HC: Homebuyers' Right to Interest Under RERA for Delayed Possession Is Independent and Indefeasible

Kaustav Chowdhury

Aug 18

5 min read

The Bombay High Court, in a judgment dated 18 June 2026, has reaffirmed that the right of homebuyers to claim interest for delayed possession under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA) is independent, indefeasible, and absolute. In CCI Projects Private Limited v. Allottees (Second Appeal), Justice Sharmila U. Deshmukh held that this statutory right cannot be curtailed by the provisions of the Indian Contract Act, 1872, and that RERA, being a special enactment with an overriding effect under Section 89, prevails over general law. The ruling carries significant implications for homebuyers and developers across India.

Background and Context

The appellant, CCI Projects Private Limited, challenged an order of the Maharashtra Real Estate Appellate Tribunal (MahaRERA Appellate Tribunal) directing it to pay interest for delayed possession to allottees who had booked apartments in the Wintergreen building of the Rivali Park project in Mumbai. The allottees had been promised possession by 30 June 2017. When the developer failed to deliver possession on time, the allottees filed complaints before the MahaRERA Authority seeking interest under Section 18 of RERA. The MahaRERA Authority ruled in favour of the allottees, and the Appellate Tribunal upheld that order, directing the developer to pay interest at the prescribed rate from the original promised date until the actual date of possession.

The developer raised several defences before the High Court. First, it argued that the allottees had accepted revised timelines and payment schedules, thereby waiving their right to interest under Section 55 of the Indian Contract Act. Second, it invoked the COVID-19 pandemic as a force majeure event to justify the delay. Third, it contended that the original MahaRERA order was a consent order because the allottees had sought parity with a similar case, and therefore could not be appealed. The High Court addressed each of these contentions in its detailed judgment.

Key Holdings and Observations

1. Section 18 Provides an Unqualified Absolute Right

The Court held that Section 18 of RERA codifies a summary mechanism that discharges the allottee from the onus of proving actual loss when the promoter fails to hand over possession by the specified date. The bench observed that the right given by Section 18 to continue with the project permits acceptance of delayed performance without foregoing the right to claim interest for every month of delay. The Court emphasised that this right is unqualified, absolute, and requires no prior notice or precondition from the allottee.

2. RERA Overrides the Indian Contract Act

The Court analysed the interplay between Section 18 of RERA and Section 55 of the Indian Contract Act, 1872. While Section 55 makes the right to compensation conditional upon giving notice of intention at the time of accepting delayed performance, Section 18 of RERA imposes no such conditionality. Relying on Section 89 of RERA, which gives the statute an overriding effect over any other law inconsistent with it, Justice Deshmukh held that RERA, as a special enactment, prevails over the Contract Act. The Court noted that the legislature had consciously enacted Section 18 as a self-contained remedy for allottees, independent of any obligation under general contract law.

3. Unilateral Communications Do Not Alter Agreed Dates

The Court rejected the developer's argument that the allottees had accepted revised possession dates by following a revised payment schedule. It held that these communications were merely informative and did not constitute valid addendums to the registered agreement. A statutory date mentioned in a registered agreement under MOFA or RERA cannot be altered by the mere conduct of parties or unilateral updates; any such alteration must be in writing and executed as a formal amendment to the agreement.

4. COVID-19 Defence Rejected for Pre-Existing Delays

The Court dismissed the developer's plea regarding force majeure. It observed that possession was due in June 2017, well before the onset of the COVID-19 pandemic in early 2020. Following the precedent in M/s Pragatej Builders and Developers Pvt. Ltd. v. Abhishek Anju Sukhadia, the Court held that a subsequent lockdown cannot come to the aid of a promoter who was already in default prior to the pandemic. The COVID-19 extension granted by regulatory authorities applies only to projects where the possession deadline fell during or after the pandemic period.

5. Supreme Court Precedents Affirmed

The bench relied on the Supreme Court's decisions in Newtech Promoters and Developers Pvt. Ltd. v. State of UP (2021) and Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783, to reiterate that the right to refund or interest under RERA is indefeasible. Both decisions confirm that Section 18(1) grants allottees an unqualified right that the legislature consciously provided to be triggered on demand upon default by the promoter.

6. Plea of Parity Does Not Create a Consent Order

The Court also addressed the developer's contention that the original MahaRERA order was a consent order because the allottees had requested parity with a similar case. Justice Deshmukh rejected this argument, holding that a plea for parity is not an express waiver or abandonment of the right to claim interest or the right to file an appeal. The Court observed that there can be no estoppel against law, and the allottees' request for an identical order did not extinguish their statutory rights.

Analysis and Implications

This judgment settles the recurring question of whether homebuyers who continue with a delayed project without issuing a formal notice under the Contract Act forfeit their right to interest. The Court's answer is clear: the statutory framework under RERA operates independently of the common law of contracts, and the right to interest is triggered automatically upon default by the promoter. This is particularly relevant for thousands of allottees across India who accepted delayed timelines out of practical necessity, without being aware of the legal requirement under Section 55 of the Contract Act.

The ruling also gains significance in the context of recent regulatory reforms. The RERA Decriminalisation Under the Jan Vishwas Act 2026 has restructured several RERA penalties, shifting enforcement toward monetary fines rather than imprisonment for certain offences. This judgment, read alongside those reforms, reinforces the principle that while criminal penalties may be recalibrated, the civil right to interest for delayed possession remains sacrosanct and non-negotiable.

The rejection of the COVID-19 defence is also noteworthy. This ruling, together with the Bombay High Court's earlier decision in Runwal Constructions (8 June 2026, Justice Madhav Jamdar) involving the Runwal Infinity project in Mulund where possession was delayed for nearly 16 years, establishes a firm precedent that pandemic-related extensions cannot shield developers from defaults that originated before March 2020. For practitioners tracking Bombay HC jurisprudence on enforcement of statutory and contractual rights, this decision adds to a growing body of rulings that prioritise statutory protections over contractual defences.

Key Takeaways

The right to interest under Section 18 of RERA is absolute, unconditional, and independent of the Indian Contract Act, 1872.
Homebuyers who continue with a delayed project retain their statutory right to interest without needing to issue any notice under Section 55 of the Contract Act.
RERA, as a special enactment under Section 89, has an overriding effect over inconsistent provisions of general law.
Unilateral communications or revised payment schedules issued by the developer do not constitute valid addendums to the registered agreement.
COVID-19 and force majeure defences cannot be invoked for possession delays that originated before the pandemic.
A plea for parity with a similar order does not create a consent order and does not extinguish the right to appeal.
Supreme Court decisions in Newtech Promoters (2021) and Imperia Structures (2020) remain binding precedents confirming the indefeasible nature of this right.

Conclusion

The Bombay High Court's ruling in CCI Projects Private Limited reinforces the protective framework that RERA provides to homebuyers and sends a clear message to developers: contractual manoeuvres and subsequent force majeure events cannot extinguish the statutory right to interest for delayed possession. For allottees, this judgment provides reassurance that the right under Section 18 is independent, indefeasible, and enforceable from the originally agreed date of possession until actual delivery. As real estate litigation continues to evolve across India, this decision is likely to serve as a key precedent in tribunals and courts nationwide.