The Bombay High Court has now rejected developer Om Shanti Properties’ plea against the termination of its redevelopment contract, emphasising that builders have a legal responsibility to ensure timely handover of flats to beneficiaries.
The Brihanmumbai Municipal Corporation (BMC) issued a Letter of Intent (LOI) to the developer in April 2008 and cancelled it in February 2025.
In its October 26 ruling, the High Court said builders had a “huge responsibility cast upon them in law to ensure that their obligation in terms of handing over possession of the flats through redevelopment scheme is done in a timely manner”.
The judgment is part of a series of judicial interventions over delays in redevelopment projects across Mumbai. The court has reiterated homebuyers’ right to interest until actual possession, rejected force majeure claims by developers and, in some cases, initiated contempt proceedings for failure to honour undertakings on construction and handover deadlines.
“Inordinate delays in this regard not only augment the plight of the tenants/flat owners/occupiers/ beneficiaries of a redevelopment scheme, but also defeat the purpose which the statute/law in this regard intends to achieve. The inevitable fallout being a slugfest to claim their rights over their home, resulting in prolonged litigation which ought to be avoided,” a bench of Chief Justice Mahesh Chandra Tripathi and Justice Advait Sethna observed.
Justice Sethna, who authored the judgment, emphasised the emotional significance of owning a home in Mumbai.
“We are reminded of the famous adage, ‘Home is where the Heart is.’ Mumbaikars, in their dream city of Mumbai, have immense hope and aspirations in regard to their dwelling house, which may manifest itself by way of a flat, apartment, etc. Besides the hard earned money that is put in for a house in Mumbai, there is an investment of emotions, feelings and sentiments attached to having a home in their city of dreams, which cannot be procrastinated,” he observed.
The redevelopment project was awarded to the developer’s erstwhile partners in 2008, following a March 31 resolution by the BMC Improvement Committee.
The civic body terminated their contract in 2018 over inaction but later reinstated the present petitioners as developers.
However, no progress followed a development agreement executed in June 2024, prompting the BMC to issue a termination notice on February 11, 2025.
In September 2026, the society decided to appoint a new developer.
Rejecting the developer’s allegations of delay by the BMC and the society, the High Court said the society “cannot be compelled to continue with the petitioner as a developer”.
The court added that “the redevelopment ought to be completed within time, which is of essence and this ought not to be procrastinated indefinitely, on some pretext or the other”.
Court rejects force majeure claims
In another ruling on October 23, a different bench of the Bombay High Court directed developer Victoria Enterprises to pay simple interest on Rs 5.51 crore from the promised possession date until the actual handover of flats and units in commercial premises in the Bandra Kurla Complex.
Rejecting the developer’s reliance on delays in obtaining approvals, the court observed that “Rejection of plan by the Planning Authority does not constitute a force majeure event. In any case, it cannot be contended by any stretch of imagination thRERA interest an ‘absolute’ right
In June, the High Court held that homebuyers in delayed projects are entitled to interest for every month of delay until possession under the Real Estate (Regulation and Development) Act (RERA).
The case concerned Runwal Infinity, also known as Runwal Sanctuary, in Mulund, where buyers who booked flats between 2005 and 2007 faced a possession delay of nearly 16 years.
The court held that the right to interest was “absolute” and could not be defeated by force majeure claims or contractual terms.
It rejected appeals by Runwal Constructions against orders of the RERA Appellate Tribunal directing the developer to pay interest at 10.05 per cent from February 2014 until actual possession.
Contempt action against developers
The High Court has also taken action against developers who fail to honour their commitments on construction and possession.
In September 2023, the court sentenced Pravin Vikkram Satra, proprietor of Darshan Developers, to three months in prison for contempt after he failed to honour an undertaking on construction and possession deadlines and obtaining permissions for occupation and use of the flats.
The court stayed the sentence for six weeks, allowing Satra to approach the Supreme Court, and directed him to deposit Rs 4 crore.
The rulings underline the legal consequences developers face for failing to deliver homes within promised timelines, while reaffirming the rights of residents and homebuyers awaiting possession under redevelopment schemes.
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