MahaREAT Allows Homebuyers to Withdraw Statutory Pre-Deposit in Cases of Prolonged Possession Delay and Financial Hardship
Case Title : Neelkamal Realtors Suburban Pvt. Ltd. v. Ketan Ashokrao Nage & Connected Matters Case Number : M.A. Nos. 1123/26, 1723/26, 1178/26, 1124/26, 1125/26, 691/26 & 712/26 in connected appeals
The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has permitted two homebuyers to withdraw amounts deposited by the promoter, Neelkamal Realtors Suburban Pvt. Ltd., towards the mandatory pre-deposit required for its appeals under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 (RERA).
The Tribunal, comprising Justice S.S. Shinde, Chairperson, and Shrikant M. Deshpande, Administrative Member, considered applications filed by eight homebuyers seeking withdrawal of amounts deposited by the promoter pursuant to the orders passed by the MahaRERA.
The underlying proceedings arose from a MahaRERA order dated 8 May 2025, whereby the promoter was directed, inter alia, to pay interest to several homebuyers for delay in handing over possession from the respective contractual possession dates until the date of possession along with the Occupancy Certificate. Refunds were also directed in respect of certain homebuyers.
The promoter challenged the MahaRERA order before MahaREAT and deposited the amounts required under Section 43(5) of RERA as a condition for maintaining the appeals.
The homebuyers thereafter sought withdrawal of the amounts deposited in the respective appeals. While six applications were rejected, MahaREAT allowed the applications of two homebuyers on account of the exceptional financial hardship caused by prolonged delay in possession.
In one case, the Tribunal noted that the project had remained incomplete for more than four years, requiring the homebuyer to continue residing in rented accommodation while simultaneously servicing the home loan. The Tribunal observed:
“While applicant is paying EMIs the applicant is also required to pay the rental amount for rented accommodation. We are of the view that this has been causing great hardship to the applicant.”
The promoter contended that payment of EMI was an obligation that would have continued even after possession and, therefore, could not constitute a sufficient ground for release of the pre-deposit. The Tribunal, however, accepted the homebuyer's contention regarding the combined burden of EMI and rent arising from the prolonged delay in possession.
In the second case, possession was contractually due by 31 December 2014. The homebuyer had already paid approximately 92.8% of the consideration through an HDFC Bank loan and had been bearing the burden of both EMI payments and rent for approximately 10 years. MahaREAT considered the prolonged delay and the resulting financial hardship sufficient to justify release of the deposited amount.
Accordingly, the Tribunal permitted withdrawal of ₹12,33,145 and ₹53,99,195, respectively, together with accrued interest.
At the same time, MahaREAT emphasised that the statutory pre-deposit ordinarily remains custodia legis, i.e. in the custody of the law, during the pendency of the appeal. Mere pendency of an appeal does not ordinarily entitle a homebuyer to withdraw the amount. The Tribunal held that exceptional or compelling circumstances must be demonstrated.
Thus, applications based merely on general financial difficulties, investment of life savings or alleged financial losses were not accepted where the grounds were considered generic. Similarly, where appeals had been dismissed but the applicants failed to establish a specific compelling circumstance warranting release, the amounts were not permitted to be withdrawn.
The withdrawals in the two successful cases were also made subject to an undertaking by the homebuyers to refund the amounts with interest if the promoter ultimately succeeds in the appeals.
Key Principle
The decision indicates that while the Section 43(5) pre-deposit is ordinarily protected during the pendency of an appeal, MahaREAT may permit its withdrawal in exceptional cases where prolonged delay in possession creates demonstrable and continuing financial hardship, particularly where the homebuyer is compelled to bear both housing-loan EMIs and rent for an extended period.
Importantly, the Tribunal did not treat financial hardship as an automatic ground for release. The distinction drawn was between generic financial hardship and circumstances demonstrating a specific, prolonged and continuing hardship attributable to delayed possession.
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