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.
