The Bombay High Court has delivered a decisive clarification on the obligations of real estate developers under the Real Estate (Regulation and Development) Act, 2016, affirming that contractual delays due to force majeure cannot override statutory timelines for possession unless strictly documented and approved. This judgment reinforces the primacy of RERA’s consumer-centric framework over contractual defenses that lack procedural rigor.
Background & Facts
The Dispute
The appellants, Runwal Constructions Registered Partnership and Omkar Esquare, are real estate developers who entered into agreements for sale with multiple purchasers for residential units across Mumbai and Navi Mumbai. The agreements stipulated delivery of possession by specified dates between 2017 and 2019. Despite repeated assurances, possession was delayed by periods ranging from 18 to 42 months. The respondents, homebuyers, filed complaints before the Maharashtra Real Estate Regulatory Authority (MahaRERA), alleging violation of Section 18(1) of the Real Estate (Regulation and Development) Act, 2016.
Procedural History
The case progressed through multiple forums:
- 2018: Individual complaints filed by homebuyers before MahaRERA
- 2020: MahaRERA held developers liable for delay and ordered refund of amount with 10% interest per annum
- 2021: Appellate Authority upheld the findings, rejecting force majeure claims due to inadequate documentation
- 2022: Developers filed Second Appeals before the Bombay High Court challenging the liability
Relief Sought
The appellants sought to set aside the orders holding them liable for delay, arguing that construction delays were caused by unforeseen events including the COVID-19 pandemic, labor shortages, and government restrictions. They requested exemption from interest liability under Section 18(2). The respondents sought continuation of the compensation orders, emphasizing statutory rights under RERA.
The Legal Issue
The central question was whether Section 18(1) of the Real Estate (Regulation and Development) Act, 2016 permits developers to evade liability for delayed possession by invoking force majeure without contemporaneous, verifiable documentation and prior approval from the regulatory authority.
Arguments Presented
For the Appellant
The appellants relied on M/s. DLF Limited v. Ramesh Kumar and RERA v. Shree Balaji Builders to argue that the pandemic constituted a force majeure event under the agreements and Section 18(2). They contended that the regulatory authorities erred in not considering the unprecedented nature of the lockdowns and that interest liability should be waived proportionately. They submitted that the burden of proving non-availability of resources should rest on the complainants.
For the Respondent
The respondents countered that Section 18(2) requires developers to notify the authority and provide documentary proof of force majeure within 30 days of its occurrence. No such notifications were filed during the relevant periods. They cited Pramod Kumar v. MahaRERA to argue that RERA is a welfare statute and that developers cannot unilaterally extend timelines without regulatory sanction. The absence of contemporaneous records rendered the force majeure defense legally invalid.
The Court's Analysis
The Court examined the statutory scheme of RERA, particularly Section 18(1), which mandates that the promoter shall hand over possession on the date specified in the agreement, failing which the buyer is entitled to refund with interest. Section 18(2) permits extension only if the promoter communicates the reason to the authority and the authority is satisfied that the delay is due to force majeure.
"The Act does not contemplate a retrospective justification of delay. The onus is on the promoter to establish, at the time of occurrence, that the event was unforeseeable, unavoidable, and beyond their control."
The Court held that the appellants failed to produce any communication to MahaRERA during the lockdown periods (March 2020 to June 2021), nor did they seek an extension under Section 18(2). The post-facto affidavits submitted during litigation were deemed insufficient. The Court distinguished DLF Limited on the ground that in that case, the developer had filed timely notices and obtained interim relief, which was absent here.
The Court emphasized that RERA’s objective is to protect homebuyers from arbitrary delays and that allowing unverified force majeure claims would undermine the statute’s integrity. The Court also noted that the pandemic affected all developers uniformly, and those who complied with procedural requirements were not granted automatic extensions - therefore, non-compliance could not be excused.
The Verdict
The appellants lost. The Court upheld the orders of MahaRERA and the Appellate Authority, holding that developers are strictly liable for delayed possession under Section 18(1) unless they comply with the procedural requirements of Section 18(2). The Court directed payment of interest at 10% per annum from the stipulated date of possession until actual handover.
What This Means For Similar Cases
Procedural Compliance Is Non-Negotiable
- Developers must file formal notices under Section 18(2) within 30 days of any force majeure event
- Post-litigation affidavits or general press releases will not substitute for statutory compliance
- Legal teams must maintain a real-time log of delays and regulatory communications
Interest Liability Is Automatic Unless Excused
- The 10% interest under Section 18(1) is mandatory unless the authority grants an extension
- Courts will not reduce interest based on equity or hardship if statutory conditions are unmet
- Buyers may claim interest even if possession is eventually delivered
Documentation Trumps Oral Claims
- Emails, letters, and official correspondence with authorities are critical evidence
- Internal memos or contractor statements without regulatory acknowledgment are inadmissible
- Developers must adopt digital compliance systems to track and report delays
