Right to Interest for Delayed Possession Under Section 18 of RERA Is Unqualified: Bombay High Court

Kaustav Chowdhury
2 days ago
4 min read

The right of a homebuyer to claim interest for delayed possession under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA) is an unqualified statutory right that does not depend on the fine print of the builder-buyer agreement. That principle was firmly reiterated by the Bombay High Court on 9 June 2026, when it dismissed a batch of appeals filed by a developer challenging interest awarded to homebuyers in the Runwal Infinity project at Nahur, Mulund. For buyers stuck with delayed flats, the decision is a useful reminder of how powerful Section 18 actually is, a theme also covered in our guide on how to file a RERA complaint against a builder.

What the Bombay High Court Held

A single judge bench of Justice Madhav Jamdar dismissed ten appeals filed by the developer against a 2018 order of the Maharashtra Real Estate Appellate Tribunal (MahaREAT). The tribunal had directed the developer to pay interest to allottees at 10.05 percent per annum from 1 February 2014 until possession was handed over. The High Court found no reason to interfere, holding that the allottee's entitlement to interest flows directly from the statute and cannot be defeated by clauses in the agreement for sale.

The Court also imposed costs on the developer, signalling that repeated and unmerited challenges to a settled statutory entitlement would not be encouraged. The wider message for the real estate sector is straightforward. A builder cannot indefinitely retain a buyer's money while postponing handover and then argue that interest is merely a matter of contract rather than law. The decision protects buyers who chose to remain invested in a project rather than walk away.

Section 18 of RERA: An Unqualified Right

Section 18 of RERA provides that if a promoter fails to complete or is unable to give possession of an apartment, plot or building by the date specified in the agreement for sale, the allottee has two distinct choices. The allottee may withdraw from the project and claim a refund of the amount paid along with interest and compensation, or the allottee may choose to continue in the project and claim interest for every month of delay until possession is actually handed over.

The crucial point is that this is a right the statute confers on the allottee, not a concession the builder grants as a favour. Courts have repeatedly held that the obligation to pay interest for delay is not contingent on contractual stipulations, and that a promoter cannot contract out of its statutory liability. Buyers weighing whether to exit a stalled project or stay invested may find our explainer on how to cancel a flat booking and get a refund under RERA helpful in understanding both options and their consequences.

Background: The Runwal Infinity Dispute

The dispute arose from prolonged delays in handing over flats in the project, with possession stretching well beyond the committed timeline. Aggrieved homebuyers first approached the regulatory authority and then the appellate tribunal, which directed payment of interest for the delay. The developer carried the matter to the High Court through a series of ten appeals, contending among other things that the interest awarded was excessive and that the contractual terms, rather than the statute, should govern the relationship between the parties.

The High Court rejected these contentions and upheld the tribunal's findings. By dismissing all the appeals and imposing costs, the Court underlined that the appellate process should not be used to wear down homebuyers who are entitled to a statutory remedy. The ruling thus operates both as a substantive affirmation of Section 18 and as a procedural caution against tactical litigation.

Why This Matters for Homebuyers

Delayed possession is one of the most common grievances in Indian real estate, and many buyers continue paying loan instalments on homes they cannot occupy. This ruling strengthens their position by confirming that the statutory right to interest is robust and not easily diluted. It also reinforces the broader trend of RERA tribunals and courts protecting allottees, even as some regulatory authorities have faced criticism for leniency towards developers, an issue visible in cases such as the Karnataka High Court stay on RERA for certain BDA projects.

Practically, buyers should preserve their agreement for sale, all payment receipts, and every piece of correspondence mentioning the promised possession date. These documents establish both the fact of delay and the principal amount on which interest is computed. Where a developer offers a token settlement, buyers can weigh it against the statutory interest they are entitled to claim from the committed possession date.

How Allottees Can Enforce the Right

An allottee seeking interest for delay typically files a complaint before the state Real Estate Regulatory Authority, which can direct the promoter to pay interest at the prescribed rate. An order of the authority can be carried in appeal to the state Real Estate Appellate Tribunal, and from there to the High Court on questions of law. Throughout this process, the unqualified nature of the Section 18 right means the central question is usually the quantum and period of interest rather than whether interest is payable at all.

Key Takeaways

The right to interest for delayed possession under Section 18 of RERA is an unqualified statutory right that does not depend on the builder-buyer agreement. The Bombay High Court's Runwal Infinity ruling confirms that developers cannot retain buyers' money while delaying handover and then dispute interest on contractual grounds. Homebuyers facing delays should document the promised possession date and amounts paid, and pursue interest before the authority and the appellate tribunal, where the main question will usually be how much interest is due rather than whether it is due at all.