Bombay High Court Upholds Maharashtra Real Estate Appellate Tribunal's Decision To Impose Interest On Keyana Estate For Delayed Possession

High Court observed that under RERA, interest on delayed possession continues until actual physical possession is handed over with all Occupation Certificate conditions fully complied with and the flat fit for habitation.

Background Facts

Builder (“Appellant”) launched a residential project named “Kalpataru Radiance” in Mumbai. Homebuyers (“Respondent”) booked their flats and on 29 December 2014 signed an Agreement for Sale. As per the agreement the builder was to hand over possession of the flats by December 2016 with a grace period of six to nine months.

However, the project was delayed after the Municipal Corporation of Greater Mumbai (MCGM) issued a stop-work notice, halting construction. Later, on 18 July 2017, the builder registered Wing “A” of the project as an ongoing project under RERA.

When possession was not delivered within agreed timeline, homebuyers filed a complaint before MahaRERA (“Authority”). On 28 September 2020, Authority ruled in the favour of homebuyers and directed builder to pay interest at 9% per annum from 1 July 2017 until possession was handed over.

As a result of it, builder filed an appeal before the Maharashtra Real Estate Appellate Tribunal and deposited Rs. 52.10 Lakhs as per requirements under RERA, 2016.

Builder later received the Occupation Certificate for project on 10 April 2023 and offered possession of flat in May 2023. Homebuyers initially did not take possession and instead filed an application before Authority for enforcement. Eventually they accepted possession on 26 January 2024.

Later by an order dated 24 June 2025, the Tribunal dismissed the builder's appeal and directed that deposited amount be released to homebuyers by 16 July 2025.

Aggrieved by Tribunal order, the builder filed appeal before the Bombay High Court under Section 58 of the Real Estate (Regulation and Development) Act, 2016.

Contentions by Builder

Builder contended that the Appellate Tribunal committed an error in law by going behind the Occupation Certificate granted by the Planning Authority.

Builder argued that under Section 19 of the RERA,2016 the promoter's liability to pay interest can be enforced only for a period of two months from the date of the Occupation Certificate. Once the Occupation Certificate is issued and possession of the flat is validly offered, the builder's responsibility stands discharged.

High Court Verdict

High Court noted that the Tribunal had carefully examined the Occupation Certificate dated 10 April 2023. It found that the Occupation Certificate was granted on the condition that the builder must obtain a Certificate under Section 270(A) of the Mumbai Municipal Corporation Act, 1888 before handing over possession of the flats to the buyers.

High Court referred to Section 270A of the Mumbai Municipal Corporation Act, 1888 which provides that no person shall occupy, use or permit the use of any premises until a certificate is obtained from the Commissioner confirming that there is an adequate supply of water for the persons intending to occupy or use the premises.

High Court observed that a mere offer of possession of the flat is not enough to meet the builder's obligation under RERA. If the Occupation Certificate is issued subject to certain conditions especially those related to making the flat fit for occupation, those conditions must first be fulfilled.

Therefore, High Court concluded that the Tribunal was right in holding the builder liable for the delayed possession. As a result, the builder's appeal was dismissed.

Case – Keyana Estate LLP (Earlier Known as Kiyana Ventures LLP) Versus Paresh Parihar & Anr

Citation - Second Appeal No. 537 of 2025 With Interim Application No. 11757 Of 2025