Bombay HC upholds homebuyers' right to withdraw builder's deposit during appeal; How will this speed up refund on delayed projects?

In a buyer-friendly judgment, the Bombay High Court has ruled that a homebuyer can withdraw the pre-deposit amount made by a builder while the builder’s appeal is pending before the RERA appellate tribunal. The court observed that the Real Estate (Regulation and Development) Act (RERA) does not bar the tribunal from exercising discretion to release such deposits in deserving cases.

What was the case before the Bombay High court?

The case involved homebuyer Mitul Gada, who had booked two flats in the North Sea Heights project by Rare Townships Private Limited in 2015 for over ₹3 crore and paid nearly ₹2 crore. Possession was promised by December 2018, but delayed by more than a decade.

Gada approached MahaRERA, which in September 2025 ordered a full refund with interest and compensation under Section 18 of RERA. The builder filed an appeal and deposited the required pre-deposit amount. In January 2026, the RERA appellate tribunal allowed Gada to withdraw the deposited amount. The builder then challenged this before the Bombay High Court.

What did the Bombay High Court decide?

The court upheld the tribunal’s order, stating that the tribunal can exercise discretion to release the builder’s deposit during the appeal if the facts justify it. Justice N J Jamadar (in an earlier related observation) had noted that releasing the amount helps relieve the buyer’s financial hardship and mental anguish caused by long delays.

The court highlighted that a builder who has deprived the buyer of hard-earned money for years cannot easily argue against releasing the amount. It stressed that buyers and builders are not on equal footing — the buyer is usually the more vulnerable party.

Key observations by the court

The judgment underlined that the main purpose of the pre-deposit provision under RERA is to protect the buyer and prevent situations where a successful buyer is still left without any relief during lengthy appeals. The court said the buyer may be asked to give an undertaking to repay the amount with interest if the builder ultimately wins the appeal.

What does this mean for homebuyers and builders?

This ruling is expected to benefit thousands of delayed-project homebuyers in Maharashtra. It strengthens the protective intent of RERA by ensuring that buyers do not remain financially stuck while builders drag cases through appeals. Builders, on the other hand, will now have to be more cautious, as their deposited amounts can be released to buyers in genuine cases of delay.

(With TOI input)