Authority: High Court of Judicature at Bombay, Civil Appellate Jurisdiction

Order Date: 23 September 2026

Case Overview

  • Parties: JP Builders and Developers (promoter) through proprietor Jayant Shashikant Parikh (appellant in Second Appeal No. 116 of 2025) vs Santosh Amarsingh Sandhu (allottee, appellant in Second Appeal No. 603 of 2025). The matter also involves original purchasers Mrs. Vandana Nagendra Kharatmol and Mr. Nagendra Piraji Kharatmol (collectively “Kharatmols”).
  • Background: CIDCO granted a 60‑year lease of Plot 1 (8,200 sq m) in Sector 19, Airoli, Navi Mumbai on 14 May 2004. The lease was transferred to Airoli Co‑operative Housing Society Ltd., which entered a Development Agreement with JP Builders on 27 April 2004. JP Builders constructed Wings C and D, obtained an Occupancy Certificate on 17 Jan 2007, and retained a balance FSI of 824 sq m.
  • FSI Dispute: The society sought additional FSI from Plot 11B (under a high‑tension line) and was allotted 4,313.94 sq m, later claiming entitlement to 10,450 sq m. A writ petition (2009) was filed; during its pendency JP Builders secured a Commencement Certificate on 14 July 2011 for 745.472 sq m of the balance FSI.
  • Initial Booking: Kharatmols booked Flat A‑502 (5th floor, Wing A) for Rs 48,75,000, paying Rs 3,00,000 as token and later Rs 9,30,000, totalling Rs 12,30,000 by 2 Mar 2012.
  • Transfer to Allottee: Kharatmols lost interest due to construction delays and arranged a transfer of the booking to Santosh Sandhu. A fresh allotment letter dated 11 July 2013 was issued to Sandhu, who paid Rs 12,30,000 to the promoter.
  • RERA Registration: After the Real Estate (Regulation and Development) Act, 2016, the project was registered with Maha RERA on 31 July 2017. The promoter issued notices on 3 May 2019, 28 May 2019 and 24 June 2019 urging Sandhu to pay stamp duty and registration charges and to execute a registered Agreement for Sale.
  • Allottee’s Response: Sandhu emailed on 30 June 2019 stating inability to pay stamp duty (Rs 4,35,000) and proposed either a three‑month wait or that the promoter bear the duty via his home‑loan proceeds.
  • Termination: After no satisfactory payment, the promoter served a termination notice on 30 July 2019, demanding payment of the balance consideration (Rs 12,95,000) and stamp duty. The promoter subsequently refunded Rs 11,07,000 (deducting Rs 1,23,000 earnest money).
  • Regulatory Proceedings: Sandhu filed a complaint before Maha RERA (Nov 2019). Maha RERA issued an interim order on 6 Mar 2020 directing execution of a registered Agreement for Sale under Section 13 of RERA, and a final order on 8 Oct 2020 confirming the same. Both parties appealed to the Maharashtra Real Estate Appellate Tribunal, which on 22 Oct 2024 dismissed the promoter’s appeal, partly allowed Sandhu’s appeal, directed payment of interest on Rs 12,30,000 at SBI MCLR + 2% from 12 July 2016, and ordered adjustment of that interest against the balance consideration.
  • Cross Appeals: The promoter filed Second Appeal No. 116 of 2025; Sandhu filed Second Appeal No. 603 of 2025. The High Court admitted the appeals on 16 Sep 2026 and framed five questions of law concerning stamp‑duty payment, validity of termination, RERA’s direction to execute the agreement, interest adjustment, and adjustment of the Kharatmols’ consideration.
  • Findings:

1. Stamp Duty: Evidence (email of 9 July 2019, bank statements, and the allottee’s own letter of 18 Jan 2020) showed that the amount transferred to the bank was never credited to the statutory e‑payment account; no challan was generated. The court held the allottee did not pay stamp duty or registration charges before 30 July 2019.

2. Termination: Given the lack of stamp‑duty payment and the allottee’s failure to produce proof despite repeated notices, the termination notice of 30 July 2019 was deemed justified.

3. RERA Direction: Since the agreement could not be executed without stamp‑duty payment, the court found Maha RERA and the Appellate Tribunal erred in directing the promoter to execute a registered Agreement for Sale.

4. Interest: Although the termination was valid, the court accepted the Tribunal’s interest rate (SBI MCLR + 2%) and the back‑dating to 12 July 2016, noting the allottee’s prolonged wait for construction.

5. Adjustment of Earlier Payments: The court rejected Sandhu’s claim that the Rs 12,30,000 paid by the Kharatmols should be adjusted against his purchase price, holding that only the booking amount of Rs 12,30,000 was actually paid to the promoter; the alleged additional payments of Rs 28,75,281 were not substantiated.

Final Outcome

  • The order of Maha RERA dated 8 Oct 2020 and the Appellate Tribunal order dated 22 Oct 2024 are set aside.
  • JP Builders and Developers shall refund Rs 12,30,000 to Santosh Amarsingh Sandhu with interest at SBI MCLR + 2% from 12 July 2016 until actual payment.
  • The promoter’s Second Appeal No. 116 of 2025 is partly allowed; the allottee’s Second Appeal No. 603 of 2025 is dismissed.
  • No order as to costs; the pending interim application is disposed of.

Topics: Real Estate Regulation, RERA Dispute, Court Judgment