MahaRERA Orders Defaulting Homebuyers to Clear Dues or Face Cancellation of Flat Allotments in Mumbai Project

June 1, 2026 : In a significant ruling reinforcing the reciprocal obligations of homebuyers and developers under the Real Estate (Regulation and Development) Act, 2016 (RERA), the Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed two defaulting allottees of flats in the Auris Illaria – Tower A project in Mumbai to clear outstanding payments along with interest within 30 days, failing which their allotments may be cancelled and the developer will be free to sell the units to third parties.

The order was passed by MahaRERA Member-II Ravindra Deshpande in two connected complaints filed by Transcon Sheth Creators Private Limited, the promoter of the registered real estate project Auris Illaria – Tower A, located in Borivali, Mumbai. The authority disposed of both matters through a common order after finding that the allottees had committed prolonged and substantial payment defaults despite repeated reminders, demand notices, cancellation notices, and legal communications.

According to the developer, the respondents had booked residential flats in March 2021 after inspecting the project and executing registered Agreements for Sale. Under the agreements, the purchasers were required to make payments in instalments as per the agreed schedule. However, after paying only the initial booking amounts, they allegedly failed to honour subsequent payment obligations.

One dispute related to Flat No. 4006 on the 40th floor, purchased for a consideration of ₹88 lakh. The allottee had paid only ₹8.62 lakh before allegedly defaulting on further instalments. The developer claimed that despite repeated follow-ups, the buyer neither cleared the dues nor completed cancellation formalities. Emails placed on record reportedly showed that the allottee expressed financial inability to continue payments, sought cancellation with refund, later requested an extension for payments, and eventually withdrew the cancellation request while stating that payments would be made only when funds became available. The promoter claimed outstanding dues of approximately ₹39.71 lakh, including interest.

The second complaint concerned Flat No. 3609 on the 36th floor, purchased for ₹1.97 crore. The buyers had paid around ₹19.30 lakh. The promoter alleged that four cheques issued towards further payments were dishonoured and that no replacement payments were made despite repeated requests. Outstanding dues along with accrued interest were stated to exceed ₹1.44 crore.

The respondents did not appear before MahaRERA despite service of hearing notices and failed to file replies. Consequently, the proceedings continued ex parte against them. The authority noted that the allegations and supporting documents produced by the promoter remained substantially unchallenged.

While examining the dispute, MahaRERA emphasized the statutory obligations imposed on allottees under Section 19(6) of the Real Estate (Regulation and Development) Act, 2016, which requires homebuyers to make payments in the manner and within the timeline specified in the Agreement for Sale. The authority also referred to the corresponding obligations imposed on promoters under Section 11 of the Act and observed that the RERA framework is based on reciprocal responsibilities rather than one-sided rights.

The authority found no material suggesting any delay or breach by the developer. On the contrary, the project was reported to be more than 75 percent complete, and the contractual possession date remained April 30, 2027. MahaRERA therefore concluded that the defaults in the present cases were primarily attributable to the allottees’ failure to make payments.

Explaining the importance of financial discipline in real estate projects, the authority observed that persistent defaults by homebuyers can adversely affect project cash flows, repayment obligations, financial planning, and overall project execution. It stated, “A promoter cannot be indefinitely compelled to keep units blocked where the allottee persistently defaults in payment obligations despite repeated opportunities.”

MahaRERA further held that the purchasers had committed “substantial, continuous and persistent defaults” under the Agreements for Sale and had failed to honour both contractual and statutory obligations. The authority reiterated that while RERA was enacted to protect homebuyers, it equally requires allottees to comply with their payment commitments.

Accordingly, MahaRERA directed the first allottee to pay ₹37.57 lakh towards outstanding consideration along with interest calculated at the State Bank of India’s highest Marginal Cost of Lending Rate (MCLR) plus 2 percent. In the second case, the purchasers were directed to jointly and severally pay ₹1.25 crore along with interest at SBI MCLR plus 2 percent. The interest component has been awarded in accordance with Rule 18 of the Maharashtra Real Estate (Regulation and Development) Rules, 2017.

The authority also ruled that if the dues are not cleared within 30 days, the developer would be entitled to initiate cancellation of the allotments under Section 11(5) of the RERA Act. Upon cancellation, the promoter may retain or forfeit amounts permissible under the Agreement for Sale and applicable law, while any remaining balance would have to be refunded to the purchasers after lawful deductions.

Importantly, MahaRERA clarified that if the defaulting allottees refuse to cooperate in executing cancellation deeds, the promoter may invoke MahaRERA Circular No. 50/2025, which permits the appointment of an authorized officer to execute and register cancellation deeds on behalf of non-cooperative allottees. This mechanism was introduced following judicial developments and is intended to prevent stalled transactions and blocked inventory.

The ruling is likely to have wider implications for the real estate sector as it reiterates that RERA protection is not limited to purchasers alone. The order underscores that homebuyers who fail to comply with payment schedules may face cancellation of allotments, forfeiture of permissible amounts, and loss of rights in the property. At the same time, it strengthens the ability of developers to seek regulatory relief when units remain blocked due to prolonged payment defaults.

CASE REFERENCE : TRANSCON SHETH CREATORS PVT. LTD. VS SANTOSH VIJAY VEER