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

Order Date: 23 September 2026 (Judgment pronounced on 23‑09‑2026; judgment reserved on 16‑09‑2026)

Case Overview

  • The matter comprises two cross‑appeals: Second Appeal No. 116 of 2025 filed by JP Builders and Developers (promoter) and Second Appeal No. 603 of 2025 filed by the allottee, Santosh Amarsingh Sandhu. Both parties challenge the Maharashtra Real Estate Appellate Tribunal’s order dated 22 Oct 2024, which upheld the Maharashtra Real Estate Regulatory Authority (Maha RERA) order of 8 Oct 2020 and directed the promoter to pay interest on Rs 12,30,000 from 12 July 2016 and to adjust that interest against the balance consideration for the flat.
  • Background facts: CIDCO granted a 60‑year lease of 8,200 sq m (Plot 1, Sector 19, Airoli) to Airoli Cooperative Housing Society Ltd (later split into Airoli CHSL and Nilambari CHSL). Airoli CHSL entered a Development Agreement with JP Builders on 27 Apr 2004. The promoter constructed Wings C and D, obtained an Occupancy Certificate on 17 Jan 2007, and retained a balance FSI of 824 sq m.
  • The society sought additional FSI from a high‑tension line plot (Plot 11B) and was allotted 4,313.94 sq m, later increased by a Supplementary Agreement (7 Apr 2017) to allow full utilisation. Construction plans changed from a 30‑storey to a 19‑storey building; a revised Commencement Certificate was issued on 26 Apr 2019.
  • Initial booking: Vandana Nagendra Kharatmol and Nagendra Piraji Kharatmol paid Rs 12,30,000 for Flat A‑502 (5th floor) on 28 May 2011. They later transferred the booking to Santosh Sandhu, who paid the same amount on 11 July 2013.
  • After the revised Commencement Certificate, the promoter asked the allottee to pay stamp duty and registration charges and to choose an alternate flat. The allottee selected Flat 1208 (12th floor) and was asked to pay floor‑rise charges of Rs 1,75,000.
  • The allottee claimed inability to pay stamp duty (Rs 4,35,000) and requested the promoter to bear it. The promoter refused and terminated the transaction by notice dated 30 July 2019, refunding Rs 11,07,000 after deducting earnest money of Rs 1,23,000.
  • The allottee filed a complaint before Maha RERA (Nov 2019). Maha RERA granted interim relief on 6 Mar 2020 directing execution of a registered Agreement for Sale, and made the order absolute on 8 Oct 2020, reiterating the same direction.
  • Both parties appealed to the Appellate Tribunal. The Tribunal dismissed the promoter’s appeal, partly allowed the allottee’s appeal, upheld Maha RERA’s order, and directed the promoter to pay interest on Rs 12,30,000 at SBI MCLR + 2% from 12 July 2016, to be adjusted against the balance consideration, and to hand over possession of a flat of the allottee’s choice.
  • The High Court admitted the cross‑appeals and framed five questions of law concerning (i) proof of stamp duty payment, (ii) validity of termination, (iii) justification for directing execution of an agreement, (iv) justification for interest adjustment, and (v) adjustment of the earlier buyers’ consideration.
  • Evidence presented: Email dated 9 July 2019 from the allottee claiming payment of stamp duty; bank statements showing a NEFT of Rs 4,65,000 to the promoter’s account; lack of any challan or receipt from the stamp authority; the allottee’s letter to the bank on 18 Jan 2020 requesting refund of the same amount because no e‑challan was generated.
  • The Court found that the allottee never produced a valid stamp‑duty/challan, that the amount remained in the bank’s account, and that the allottee made no effort to generate the challan after the bank’s refusal to issue e‑SBTR. Consequently, the Court held the allottee had not paid stamp duty or registration charges before 30 July 2019.
  • The Court concluded that the promoter was justified in terminating the sale on 30 July 2019, that Maha RERA and the Appellate Tribunal erred in directing execution of a registered Agreement for Sale, and that the interest direction should be upheld.
  • Regarding the claim of adjustment of the earlier buyers’ (Kharatmols) payment, the Court noted that the promoter had refunded the Kharatmols the full booking amount of Rs 12,30,000 and that no documentary evidence supported the allottee’s claim of having paid Rs 28,75,281. Hence, the adjustment claim was rejected.
  • The Court set aside the Maha RERA order of 8 Oct 2020 and the Appellate Tribunal order of 22 Oct 2024.
  • Final directions: (i) Promoter must refund Rs 12,30,000 to the allottee with interest at SBI MCLR + 2% from 12 July 2016 until actual repayment; (ii) Second Appeal No. 116 of 2025 (promoter) is partly allowed; Second Appeal No. 603 of 2025 (allottee) is dismissed; (iii) No order as to costs; (iv) Pending interim application disposed.

Final Outcome

  • The High Court set aside the earlier regulatory and appellate orders, upheld the promoter’s right to terminate the transaction, and ordered a refund of Rs 12.30 million with interest to the allottee. The allottee’s appeal was dismissed; the promoter’s appeal was partially allowed.

Topics: Legal Dispute, Real Estate Regulation, Refund & Interest