Bombay High Court orders builder to pay interest from 2017 for delayed flat delivery
The Bombay High Court ruled that homebuyers who paid Rs 2.06 crore are entitled to monthly interest from July 2017 until possession, despite the builder’s claim they accepted the delay.
Homebuyers who had paid Rs 2.06 crore for an apartment promised by June 30 2017 sued the developer after the project remained incomplete. The Maharashtra Real Estate Appellate Tribunal had previously directed the builder to pay interest at the SBI marginal cost of lending rate plus 2% from July 2017, but the developer appealed to the Bombay High Court. The court held that accepting delayed performance does not extinguish the statutory right to interest under Section 18 of the Real Estate (Regulation and Development) Act, which overrides the Contract Act.
It ordered the builder to pay the stipulated interest and Rs 25,000 in costs, rejecting the developer’s claims of buyer consent, force-majeure, and pandemic-related delays. The ruling affirms that buyers can continue paying installments without forfeiting interest claims, and it emphasizes that any extension of timelines must follow formal RERA procedures. The decision is now under appeal before the Supreme Court.
Why it matters
The judgment clarifies that homebuyers retain the right to interest for delayed possession, reinforcing consumer protection under RERA.
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