Interest for Delayed Period of Possession to be calculated from date of default of Handing over Possession


Status as on- 07/03/2020

In the matter of Mr. Kochikar Bhuvanesh Pai vs. M/s Reliance Enterprise &Ors., MREAT held that the Appellants are fully entitled to compensation in terms of the delay in possession w.e.f. 01.01.2016 and not from 01.05.2017 as held by the MAHARERA and set aside the order passed by MAHARERA.


  1. This Appeal is filed against the impugned order dated 25.10.2018 wherein interest for the delayed period of possession was awarded effect from enforcement of RERA Act, 2016 i.e. 01.05.2017 and not from the date of default of handing over possession.
  2. Kochikar, the Appellant herein is allottee and Respondent herein is a promoter. The Promoter launched a project namely “Hill View” situated at Chembur (E), Mumbai, where allottee agreed to purchase the flat No.502 and measuring 636 sq. ft. along with car parking space for a total consideration of Rs.1,28,00,000/-
  3. Parties have executed registered agreement for sale on 15.07.2014. Allottee paid Rs.1,17,38,2641- towards the price of flat and it was noticed that the construction work was almost stopped since July 2017.
  4. The promotor agreed to hand over possession of the flat on or before December 2015 but the promoter failed to hand over possession of flat to allottee before December 2015 as per agreed terms.
  5. The complaint No.54894/2018 came to be lodged in July 2017 against promotor before MahaRERA. After hearing promotor and allottee impugned order dated 25.10.2018 was passed in complaint No. 54894/2018 and promotor was directed to pay interest on the amount paid by allottee from the date of application of RERA Act, 2016 i.e. 01.05.2017 till possession is handed over to allottee.
  6. Feeling aggrieved by the impugned order allottee has preferred this appeal and challenged legality, propriety, and correctness of the order.


The promoter is under obligation to pay interest on the amount paid by allottee from the date of payment till the possession is handed over to allottee. In the present matter default of handing over possession stats from 1st January 2016. So, the promoter is liable to pay interest on the amount received from allottee with effect from 1st January 2016 till possession is handed over to allottee.

MahaRERA correctly allowed the claim for interest but committed error in granting interest from 01.05.2017 i.e. date of enforcement of RERA Act and not from delayed period of possession i.e. 01.01.2016. The impugned order has been passed by the MahaRERA directing to pay interest from 01.05.2017 and not from date of payment is partly proper, correct and legal.

MREAT made an observation that there is an inordinate delay in handing over the possession. Once agreed, the respondents are obligated to handover possession of the booked flat within the stipulated period as per clause 12 (a) of the Act. It is held in the case of Neelkamal Realtors that the respondents being sufficiently experienced in the open market ought to have fairly assessed the impact of mitigating factors on completion of the project. The claim of respondents that complainant was made aware of the likely delay that may be caused due to certain factors mentioned at the time of executing the agreement cannot be accepted for the reason that being domain experts it was for the respondents to determine the reasonable date of possession keeping in view the exact impact of the said mitigating factors. They cannot blame the complainant as he had no role as far as the execution of the project is concerned.


It is necessary to modify the impugned order by replacing the date of payment of interest from 01.05.2017 by 01.01.2016. Moreover, it is also necessary to modify impugned order by giving direction to both the parties to adjust the claim of allottee for recovery of interest of delayed period of possession against the claim of Promoter for recovery of balance price of the flat at the time of possession. Thus, the impugned order is partly correct and legal and it stands modified.


Disclaimer– The above article is based on the personal interpretation of related laws, which may differ from person to person. The readers are expected to take expert opinion before relying on this article. For more clarification, the readers can be expected at  


  1. Hi, I need guidance on effective rate of Interest in calculation of Interest/compensation in case of delayed possession. Each state has different rate of interest, For example UP RERA has MCLR + 1%. In the case of UP RERA, what MCLR rate should be considered for the calculation of interest/compensation? MCLR rate of the day when possession offered/settlement done? or the MCLR rate of the day from when the delay happened (date of possession promised)? What if the delay is for 48 months? Based on the clarity on date of MCLR to be considered for calculation next question is what MCLR rate should be taken of that date Daily/Monthly/Yearly? Thanks

    1. Check RERA order date..the go to SBI site and check MLCR rate for 3 years.U will get the MLCR rate.

  2. Sir
    RERA Act provides payment of Interest/compensation in case of delayed possession. Most of State RERA rules provide interest calculation as per the rates of SBI MCLR +1or 2%. But nowhere it is specified that it should be calculated on simple interest basis although SBI charges MCLR interest on monthly rests basis from its customers. Moreover State RERA judgments are silent on the manner, in which the interest should be calculated. But it is calculated on simple interest basis.
    Please enlighten on this matter. support with decided cases.

Leave a Reply

Your email address will not be published. Required fields are marked *