Interest for Delayed Possession Upheld in 10 Appeals

The Bombay High Court, per Justice Madhav J. Jamdar, dismissed a group of 10 Second Appeals arising from delayed possession disputes in a real estate project. The appeals challenged orders of the Maharashtra Real Estate Appellate Tribunal and, before that, the Competent Authority, where the allottees had sought interest for delayed possession.

The court examined the challenge across the connected appeals and upheld the orders directing payment of interest. The judgment records that the allottees had approached the authorities for relief on account of delay in handing over possession, and the appellants, developers, sought to resist those directions in second appeal.

On relief, the court dismissed the appeals and imposed costs. Second Appeal Nos. 255 of 2022, 256 of 2022, 258 of 2022, 259 of 2022, 260 of 2022 and 261 of 2022 were dismissed with costs of Rs. 10,000 each, payable to the respective respondents within four weeks. Second Appeal Nos. 253 of 2022 and 257 of 2022 were dismissed with costs of Rs. 1,00,000 each, also payable to the respective respondents within four weeks.

The court then dealt with the request for stay after pronouncing judgment. It refused to stay the order or continue the interim protection. The reason recorded was the long passage of time, since the agreements with the flat purchasers were of 2006-2007 and possession had still not been handed over after about 20 years. The court also noted that, in Second Appeal Nos. 253 of 2022 and 257 of 2022, the record showed that permission from the MCGM for demolition of Tower C had been obtained by misrepresenting the MCGM and by playing fraud on the MCGM, on the basis that the flat purchasers’ interests would be safeguarded. The court observed that a plea of frustration of contract was being raised only at the second appeal stage.

The connected civil and interim applications were disposed of as nothing survived after dismissal of the appeals.

Practical takeaway: In delayed possession disputes, a long and unexplained default, especially where the record raises issues of misrepresentation, can lead to dismissal of the developer’s appeal, costs, and refusal of stay.