MahaRERA Recovery Proceedings | Builders Must Clear Dues Before Seeking Relief from Attachment Orders: Bombay HC

In a significant ruling reinforcing the enforcement powers of the Maharashtra Real Estate Regulatory Authority (MahaRERA), the Bombay High Court has clarified that builders cannot seek relief from recovery proceedings until they fully comply with adjudicating orders. The Court underscored that attachment of properties and bank accounts will remain in force until the petitioner demonstrates complete payment of dues, including interest, to the aggrieved homebuyer.

Background & Facts

The Dispute

The petitioner, Farhat Mustafa Javied Sayed, a homebuyer, filed a complaint before MahaRERA against Monarch & Qureshi Builders (Respondent Nos. 6 to 8) for failure to deliver possession of a flat as per the agreement. The Adjudicating Officer, MahaRERA, passed an order on 31 January 2019, directing the builder to refund the amount paid by the petitioner along with interest. When the builder failed to comply, MahaRERA issued a Recovery Certificate to the Collector, Mumbai Suburban District, for enforcement.

Key Facts

• The petitioner booked a flat with Monarch & Qureshi Builders under an agreement, the details of which remain undisclosed in the judgment
• The builder failed to deliver possession, leading to a complaint before MahaRERA
• MahaRERA Order dated 31.01.2019: Directed refund of the amount paid by the petitioner with interest
• Recovery Certificate issued: The builder did not comply with the MahaRERA order, prompting recovery proceedings
• Order dated 24.09.2025: Bombay High Court passed a detailed interim order attaching the builder’s properties and bank accounts to ensure recovery

Procedural History

• 31.01.2019: MahaRERA passed an order directing refund with interest
• Post-31.01.2019: Builder failed to comply with the order, leading to issuance of a Recovery Certificate
• 16.06.2026: Co-ordinate Bench of Bombay High Court directed that the present Interim Application (for vacating the order dated 24.09.2025) be heard by the same Bench that passed the original order
• 24.09.2025: Bombay High Court passed an interim order with the following directions:
  • Collector, Mumbai Suburban District, and Tahsildar, Borivali, to file an affidavit explaining delays in executing the Recovery Warrant
  • Attachment of bank accounts of Respondent Nos. 6 to 8 linked to their PAN numbers
  • Attachment of movable and immovable properties of Respondent Nos. 6 to 8
  • Prohibition on Respondent Nos. 6 to 8 from dealing with their properties until recovery is completed
  • Prohibition on creating third-party rights in ongoing projects
  • Disclosure affidavit to be filed by Respondent Nos. 6 and 8 within one week
  • Freezing of all bank accounts of Respondent Nos. 6 and 8
  • Oral communication of the order to the Collector and Tahsildar
• 29.06.2026: Present hearing wherein the Court directed the builder to place on record details of payments made to the petitioner and outstanding amounts

The Parties' Positions

• Petitioner: Contended that the builder had failed to comply with the MahaRERA order and sought strict enforcement of the recovery proceedings
• Builder (Applicants/Respondent Nos. 6 to 8): Sought vacation of the order dated 24.09.2025, arguing that partial payments had been made and that the attachment orders were overly harsh
• State of Maharashtra: Represented by the Advocate General, submitted that recovery proceedings were being executed as per law

Relief Sought

The applicants (builders) sought vacation of the order dated 24.09.2025, which had attached their properties and bank accounts. They argued that they had made partial payments and were willing to comply with the MahaRERA order. The petitioner, however, insisted on full compliance before any relief could be granted.

The Legal Issue

The central question before the Court was whether attachment orders passed under recovery proceedings could be vacated before the builder fully complies with the adjudicating order of MahaRERA, including payment of the principal amount and interest.

Arguments Presented

For the Applicants (Builders)

• Argued that partial payments had been made to the petitioner and that the attachment orders were causing undue hardship
• Contended that the Court should consider the steps taken by the builder to comply with the MahaRERA order
• Submitted that the builder was willing to continue paying interest until possession of the flat was handed over

For the Petitioner

• Emphasized that the builder had failed to comply with the MahaRERA order dated 31.01.2019 despite ample opportunity
• Argued that the attachment orders were necessary to ensure recovery of the dues
• Contended that the builder should not be granted relief until full compliance with the MahaRERA order was demonstrated

For the State

• Submitted that the recovery proceedings were being executed as per the Recovery Certificate issued by MahaRERA
• Highlighted the delays in execution by the Collectorate and sought directions for expedited compliance

The Court's Analysis

The Court examined the operative order dated 24.09.2025, which had attached the builder’s properties and bank accounts to ensure recovery of the petitioner’s dues. The Court noted that the builder had sought vacation of this order but had not placed on record concrete evidence of full compliance with the MahaRERA order. The Court observed:

"Considering the prayer as made by the applicant in the present Interim Application, appropriate details in regard to the amounts actually paid to the original petitioner in pursuance to the order dated 31 January 2019 passed by the Member & Adjudicating Officer, MahaRERA, Mumbai, needs to be required to be placed on record. The same be placed on record by the applicant as also by the original petitioner. In the event, the orders are not complied by the applicant and the total amount is not paid to the petitioner and/or the applicant has failed to comply with the further undertaking that the applicant will continue to make payment of interest till handing over the possession of the flat, as per the order dated 31 January 2019, appropriate orders would be required to be passed."

The Court emphasized that relief could not be granted until the builder demonstrated full compliance with the MahaRERA order, including payment of the principal amount and interest. The Court also noted that the Recovery Warrant issued by MahaRERA was a binding legal instrument, and its execution could not be stayed without just cause. The Court reiterated the importance of consumer protection and the need for strict enforcement of MahaRERA orders to uphold the rights of homebuyers.

The Verdict

The Court declined to vacate the order dated 24.09.2025 and directed the builder to place on record the following details within the next hearing:

1. Amounts paid to the petitioner pursuant to the MahaRERA order dated 31.01.2019
2. Outstanding amount, if any, including interest accrued
3. Compliance status with the undertaking to continue paying interest until possession of the flat is handed over

The Court listed the matter for further hearing on 6 July 2026 and clarified that no relief would be granted until full compliance with the MahaRERA order was demonstrated.

What This Means For Similar Cases

Strict Compliance Before Relief

This judgment reinforces that builders cannot seek relief from attachment orders until they fully comply with MahaRERA adjudicating orders. Practitioners should note:

• Courts are unlikely to vacate recovery proceedings unless the builder provides concrete evidence of full payment, including principal and interest
• Partial payments or undertakings to pay in the future are insufficient to seek relief
• Builders must ensure timely compliance with MahaRERA orders to avoid attachment of properties and bank accounts

Enforcement of Consumer Rights

The judgment underscores the pro-consumer stance of MahaRERA and the judiciary. Key takeaways include:

• Recovery Certificates issued by MahaRERA are binding and must be executed by the Collectorate without undue delay
• Homebuyers can rely on attachment orders to secure their dues, even if recovery proceedings are delayed
• Courts will not entertain pleas for relief unless the builder demonstrates bona fide compliance with the adjudicating order

Role of Collectorate in Recovery Proceedings

The Court’s directions to the Collector, Mumbai Suburban District, and the Tahsildar, Borivali, highlight the following:

• The Collectorate must expedite execution of Recovery Warrants and file affidavits explaining any delays
• Bank accounts linked to PAN numbers of defaulting builders can be attached as per RBI norms
• Movable and immovable properties of builders can be attached to ensure recovery, and builders are prohibited from creating third-party rights in ongoing projects
• The Court expects transparency in recovery proceedings, including disclosure of project details and financial transactions

Practitioners representing homebuyers should ensure that Recovery Certificates are promptly executed, while builders must prioritize full compliance to avoid severe enforcement actions.