Bombay HC Rules Homebuyers Entitled to Monthly Interest for Delayed Possession Under RERA
Mumbai, June 10, 2026: In a significant ruling for homebuyers across India, the Bombay High Court has held that buyers are entitled to receive interest for every month of delay in possession under the Real Estate (Regulation and Development) Act, 2016 (RERA).
The court observed that homebuyers who choose to remain invested in a delayed project cannot be deprived of the statutory benefits provided under the law and are entitled to compensation in the form of interest until possession is handed over.
What Did the Court Say?
Justice Madhav Jamdar noted that RERA was enacted to protect homebuyers from prolonged project delays and to bring greater accountability to the real estate sector.
The court emphasized that developers cannot indefinitely delay possession while avoiding the financial consequences prescribed under the law. According to the judgment, buyers who continue with a project despite delays have an unconditional right to receive interest for every month of delay until possession is granted.
Case Linked to Delayed Mulund Housing Project
The ruling came in a case involving 10 homebuyers who had booked flats in a residential project in Mumbai's Mulund area between 2005 and 2007.
In 2018, the RERA appellate tribunal directed the developer to pay interest from February 2014 until possession of the flats was delivered. The builder challenged the decision before the Bombay High Court.
However, the court upheld the principle that homebuyers are entitled to compensation for delays under the provisions of RERA.
Why the Judgment Matters
The High Court referred to previous Supreme Court observations, stating that homebuyers often borrow money to purchase homes while simultaneously acting as financiers of real estate projects by making advance payments.
This creates a vulnerable position for buyers, particularly when projects face long delays.
The court reiterated that under Section 18 of RERA, buyers have the right either to continue with the project and claim interest or withdraw and seek remedies available under the law.
Builder Cites External Factors
During the proceedings, the developer argued that the project delay was caused by circumstances beyond its control, including land-related restrictions and regulatory approvals.
According to the builder, a significant portion of the project area came under forest reservation, resulting in delays before construction permissions could be obtained.
The court acknowledged that genuine mitigating circumstances may be considered in specific cases. However, it maintained that homebuyers' rights under RERA remain protected.
Impact on Homebuyers and Developers
Legal experts believe the judgment strengthens the position of homebuyers in disputes involving delayed possession.
The ruling is expected to serve as an important reference in future RERA cases, particularly where buyers seek compensation for prolonged project delays.
For developers, the judgment reinforces the importance of adhering to project timelines and addressing delays proactively to avoid financial liabilities.
Final Word
The Bombay High Court's decision is being viewed as a major win for homebuyers, reaffirming that delayed possession carries financial consequences under RERA. As project delays continue to affect buyers in several parts of the country, the ruling further strengthens consumer protection in India's real estate sector.