Builder Cannot Terminate Allotment for Non-Payment Without First Executing and Registering Agreement for Sale: MahaREAT

 

Builder Cannot Terminate Allotment for Non-Payment Without First Executing and Registering Agreement for Sale: MahaREAT

Case: Manojkumar Singh v. Era Realtors Pvt. Ltd.
Appeal No.: AT006000000204882 of 2024
Arising from: Complaint No. CC006000000282178 of 2019
Forum: Maharashtra Real Estate Appellate Tribunal (MahaREAT)
Decision: 7 September 2026
Citation: 2026 LLBiz REAT (MH) 65

The dispute concerned a homebuyer whose allotment was terminated by Era Realtors Pvt. Ltd. on the ground of non-payment. MahaREAT held that the promoter could not rely upon the allottee's alleged default when the promoter itself had failed to comply with the statutory requirement under Section 13 of the RERA Act.

Key issue

Section 13 of RERA prohibits a promoter from accepting more than 10% of the cost of the apartment, plot or building as advance/application fee without first entering into a written Agreement for Sale and registering it under the applicable law.

The Tribunal found that the promoter had accepted amounts exceeding the statutory 10% threshold but had not executed and registered the Agreement for Sale.

Finding of MahaREAT

The Tribunal held that a promoter cannot terminate an allotment for alleged non-payment when the promoter itself has failed to execute the Agreement for Sale, as required under Section 13.

In other words, the promoter cannot simultaneously:

• accept more than 10% of the consideration without a registered Agreement for Sale;

• fail to comply with Section 13; and

• thereafter rely upon the allottee's failure to make further payments to terminate the allotment.

The Tribunal further held that the promoter's continuing failure to execute the Agreement for Sale amounted to a violation of Section 13 and constituted an unfair trade practice, attracting penalty under Section 61 of RERA.

Relief granted

MahaREAT allowed the homebuyer's appeal, set aside the MahaRERA order and directed the promoter to:

• refund ₹80.77 lakh to the homebuyer;

• pay interest on ₹1.008 crore at 2% above SBI's highest MCLR for the specified period;

• pay interest on the balance refund amount for the subsequent period up to the date of the order;

• pay a ₹10 lakh penalty under Section 61 for violation of Section 13; and

• pay ₹50,000 as costs.

Important RERA proposition

A promoter cannot take advantage of an allottee's alleged payment default to terminate the allotment when the promoter itself has failed to execute and register the Agreement for Sale after accepting more than 10% of the consideration, in violation of Section 13 of RERA.

This judgment is particularly relevant for cases involving cancellation/termination of allotment, payment defaults, Section 13 compliance, and the promoter's obligation to execute a registered Agreement for Sale.

Builder Bound by Its Own Assurances of Earlier Possession; Cannot Rely on Distant Contractual Date: TNRERA

Builder Bound by Its Own Assurances of Earlier Possession; Cannot Rely on Distant Contractual Date: TNRERA

Case Title: Namasivayam v. Casa Grande Smart Values Homes Pvt. Ltd. & Ors.
Case No.: R.C.P. No. 107 of 2025
Date of Decision: 3 September 2026

The Tamil Nadu Real Estate Regulatory Authority (TNRERA), comprising Chairperson K. Phanindra Reddy and Members A. Nazir Ahamed and Reeta Harish Thakkar, held that a promoter cannot rely solely upon a distant possession date stipulated in the agreement when it has subsequently made a specific commitment to hand over possession on an earlier date through its own communications.

The complainant had booked a villa in the Casagrand Divinity Project, Chengalpattu, for approximately ₹1.91 crore and had paid more than ₹1.58 crore in 2023, partly through a housing loan obtained from the State Bank of India. Although the agreement contemplated completion by April 2027, the promoter subsequently communicated to the complainant that possession would be handed over by December 2023, with a grace period extending up to March 2024.

The promoter subsequently extended the promised date to April 2024, citing floods, but cancelled the complainant's booking in February 2024 on the ground that certain dues remained unpaid. The promoter contended that April 2027 was the only binding contractual date and that its communications regarding earlier possession were merely tentative estimates. It further alleged that the complainant was himself in default and therefore could not claim compensation under Section 18 of the RERA Act, 2016.

TNRERA rejected this contention and observed that the complainant was entitled to rely upon the promoter's specific representations regarding the earlier date of handover. Significantly, the project obtained its Completion Certificate only in November 2024, demonstrating that possession could not have been delivered even by the subsequently promised date of April 2024.

The Authority accordingly held that the promoter's failure to honour its commitment attracted liability for delay and that the complainant was entitled to interest from March 2024 until actual handing over of possession in April 2026, pursuant to the earlier directions of the Authority.

The promoter was directed to pay interest at 10.90% per annum on the amount paid by the complainant, together with ₹25,000 towards litigation costs, within 30 days.

Key Takeaway: A promoter may be held to an earlier possession commitment communicated to the allottee, notwithstanding a later contractual possession date, particularly where the promoter's own subsequent conduct demonstrates that the earlier commitment could not be fulfilled.

TSRERA :- The Allottee has an obligation to adhere to the payment schedule as agreed in its Agreement of Sale as per Section 19(6) and non procurement of the Home loan amount cannot put the Builder under financial distress.

The Allottee has an obligation to adhere to the payment schedule as agreed in its Agreement of Sale as per Section 19(6) and non procurement of the  Home loan amount cannot put the  Builder under financial distress. 

Sri Umesh Choudhary Vs/ M/s Alpine Infratech 

COMPLAINT NO.519 OF 2023 decided on 12th Day of March, 2024 

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY

Facts :-

1. The Complainant booked a flat in August 2021 in the project of the Respondent Builder.
2. Application Form/Terms and Conditions of Allotment was signed by him.
3. The Agreement of Sale was executed in the month of January 2022.
4. Complainant paid 20% of the cost and the balance 80% amount was to be arranged in form of Home loan.
5. The Project was approved from many nationalized bank but as the Complainant was a Central Government employee so he wanted the Home Loan in the form of House Building Allowance (HBA) from his concerned department. 
6. That vide e-mail dated 15.04.2022, the Complainant sought for several documents ( a list of 19 documents) from the Respondent Builder to avail HBA loan.
7. The complete documents were finally given by the builder on 20.02.2023.
8.  The Builder directed the Complainant to pay the Final due amount by 28.03.2023 else base price will be increased by Rs.200 per sft.
9. The Complainant offered an interim payment of Rs.5,00,000/-  by first week of May 2023 and the full payment by July 2023.
10. In May 2023, the Complainant requested the builder to accept the due amount of Rs.25,00,000/-
11. The Builder refused to accept the amount and stated that they will only accept if the Complainant agreed to make the payment with the revised base rate by Rs. 1000 per sft an increase of  Rs.11,20,000 in total price. 

Complainants Contentions :-

1. The delay in making payment occurred due to non-handing over of documents in time. hence, management is responsible for such delays.
2.  The revised increased rate is not acceptable as the delay in making payment did not occur on default of the Complainant. 
3. Prayed to take needful action against the Respondent Builder as per the applicable rules and regulations and to get the flat at the original agreed rate.

Respondent Builder's Contentions :-

1. The Complainant in spite of availing discount did not pay the agreed amount on time.
2. The Complainant initially agreed orally to take loan from various nationalized banks but later in the month of July 2022, started requesting various documents from the Respondent Company
3. The Complainant made one or the other request for the documents and that too after a lapse of one year and also which were beyond the purview of the Respondent Company and evaded the payments due to the Respondent Company. 
4. The Respondent Company sent several mails requesting the Complainant to visit the office of the Respondent Company to sort the issue. 
5. The Complainant failed to perform his part of contractual obligation and did not make the payment as per schedule, that's why the Company is justified in cancelling the booking 

Observations of the Authority :-

1. In Clause 1.3 of the BBA, the Complainant agreed to make payment as per payment plan set out in Schedule C (Payment Plan).
2. As per the Payment Schedule annexed to the said Agreement of Sale, the Complainant categorically agreed to payment of the schedule therein. which is not disputed by either party 
3. in the annexure to the said Payment Schedule, Point No.4 stipulates that prices are subject to change without prior notice upon non confirmation of sale.  
4.  the Complainant is bound by the same and failure of the Complainant in complying with the payment schedule is derogation of his duty under Section 19(6) of the Act.
5. the delay in procuring the documents cannot be attributed to the Respondent Builder as the said documents may not readily available with him and he may not be in a position to produce documents such as 
1. government pleader's certificate, 
2. estimates, 
3. permission under Conduct Rules for purchase of site and for construction of the house,
4.  Notice under Section 26(1) of the Urban Land (Ceiling & Regulation) Act, 1976, etc
6. Clause 9.3 (ii) of the undated Agreement of Sale executed between the parties clearly stipulates In case of Default by Allottee under the condition listed above continues for a period beyond 2 (two) consecutive months after notice from the Promoter in this regard, the Promoter may cancel the allotment of the [Apartment/Plot] in favor of the Allottee and refund the money paid to him by the allottee by deducting the booking amount and the interest liabilities and this Agreement shall thereupon stand terminated

Order of Authority:-

1. The Complainant is directed to pay the remaining amounts which is pending as on date as per the payment schedule agreed upon by both the parties within 60 (sixty) days, along with interest of 10.65%.
2. In the event the Complainant fails to complete such payment, the Respondent is to initiate measures in accordance with the provisions of the Act and Rules thereunder.