By IndiaHub 
Unfortunately, the bank where this homebuyer applied for a home loan, turned down his application, following which the homebuyer requested the builder to cancel the booking and process a refund of the booking amount. And, this is where the problem started. The builder refused to initiate the refund and claimed that as per Clause 1.4 and 3.5 of the terms of application form (booking form) that the homebuyer had signed, no refund could be issued for such cicumstances.
The homebuyer, feeling wronged by Lodha Developers (formerly Macrotech), filed a case in Maharashtra RERA (MahaRERA) under Section 12 of The Real Estate (Regulation and Development Act, 2016) or RERA Act, 2016.
In response, the builder claimed that the homebuyer’s action of filing a case with MahaRERA was nothing but a desperate and malicious attempt to exit the project without facing any penalties provided in the application form (booking form) and to coerce them into complying with the homebuyers’ request for a refund of the booking amount.
MahaRERA said that this case relies on a pre-agreement booking based on oral assurances, where forfeiture would be punitive and contrary to the spirit of the RERA Act. “Therefore, Clause 3.5 of the Application Form is one-sided, unconscionable, and unenforceable,” said MahaRERA.
To summarize, the developer had cited both Clause 1.4 and 3.5 as justifications for refusing to refund the booking amount. MahaRERA pointed out that the ‘one-sided’ application form (booking form) cited by the builder lacks the signature of the sales manager. Further, MahaRERA observed that there is no indication that the application form was explained and read to the homebuyers before their signatures were obtained.
The builder said he had incurred significant losses because of this booking cancellation. When MahaRERA looked into it, they found that the homebuyer had cancelled the booking within 9 days from signing of the application form (booking form).
MahaRERA said: “Hence, the contentions of the Respondent (builder) that Respondent has incurred substantial cost in processing the booking and has lost opportunity to sell the unit to other prospective buyers due to commitment given by the Complainant (homebuyer) is not acceptable one.”
Keep reading to find out why this RERA judgement matters for homebuyers and what other legal areguements was cited by MahaRERA that led to the builder losing the case.
How did this case start?
Here’s a timeline of events according to the order of MahaRERA dated June 10, 2025:
- September 2021: The homebuyer who resided in Russia at that time, booked a flat in Lodha Mulund Project Tower 1 for a total consideration of Rs 2,26,93,597.
- September 26 to October 10 of 2021: The homebuyer paid Rs 7 lakh in total as booking amount for this flat. This amount also included GST.
- November 8, 2021: The homebuyer applied for a home loan and during the processing of the loan, the bank demanded documents such as Russian Credit Bureau Report, residence proof of Russia, etc.
- November 18, 2021: The application form (booking form) was signed by the homebuyer.
- November 27, 2021: The homebuyers informed the builder that the bank rejected their home loan application.
After the home loan application was rejected, the homebuyer informed the builder and requested for cancellation of the booking. The homebuyer said that he has been constantly reaching out to the builder’s office through mails, phone calls and WhatsApp messages to get his rightful refund, but the builder did not give the refund. Soon after he filed a case with MahaRERA against Lodha Developers (formerly Macrotech).
MahaRERA says builder can’t enforce one-sided contract even if homebuyer signed it
According to the order of MahaRERA dated June 10, 2025, here’s what the RERA said:
- “In the present case, the Complainants (homebuyers) reason for cancellation stems from a genuine financial hardship and inability to secure a home loan. Their intent was not malicious or to unjustly enrich themselves but to withdraw in a situation of crisis.
- “In my opinion, in the present case, the Application Form was signed on 18/11/2021, after the part consideration amount was paid by the Complainants, and its terms were neither negotiated nor explained independently to the Complainants.
- The Respondent (Lodha Developers – builder) relied on Clause 3.5 of the Application Form and precedents such as Karun Malhotra vs. Ireo Grace Realtech Pvt. Ltd. and Jaideep Harpalani vs. Mascot Buildcon Pvt. Ltd., which relate to forfeiture post-agreement or where more substantial payments had been made.
- In contrast, the present case concerns a pre-agreement booking based on oral assurances, where forfeiture would be punitive and contrary to the spirit of the RERA Act. Therefore, Clause 3.5 of the Application Form is one-sided, unconscionable, and unenforceable.
MahaRERA final judgement: The amount forfeited by the builder is improper
MahaRERA said:
- It is also seen from the facts of the case that the Complainants (homebuyers) paid booking amounts Rs 1 lakh and Rs 6 lakh and on November 18, 2021 application form was signed by the Complainants (homebuyers). I have gone through the same. It seems that the said application form is simply signed by the Complainants because on some pages of application form there are signatures of both the Complainants and on some pages, there is only signature of one Complainant.
- There is no signature of the Sales Manager on the said application form. On each page no date of application mentioned and the same is blank.
- There is one mandatory basic information form and the same is entirely blank. It shows that simply signatures of Complainants (homebuyers) were obtained on the said application form.
- There is no remark that contains that the application form was explained and read over to the Complainants (homebuyers) and thereafter signatures of the Complainant (homebuyers) obtained on the same.
- Moreover, it is seen that the said application form was signed on November 18, 2021 and on November 27, 2021 the Complainants (homebuyers) informed the promoter that his loan was not sanctioned and hence he asked to refund the amount within 9 days from signing of the application form.
- Hence, contentions of the Respondent (builder) that Respondent has incurred substantial cost in processing the booking and has lost opportunity to sell the unit to other prospective buyers due to commitment given by the Respondent is not acceptable one. Therefore, the forfeiture of the amount paid by the Complainants in my considered opinion is erroneous and against the object and purpose of the said Act which is enacted as beneficial legislation to abate the hardship of home buyers. Hence, the forfeiture of the amount is improper.
Judgement: “In my opinion, the Complainant is entitled to refund the amount of Rs. 6,65,000 without interest. The Respondent / promoter is directed to refund the amount of Rs. 6,65,000/-(Rupees Six Lakhs Sixty-Five Thousand Only) on or before 15.07.2025 failing which an interest at the rate 2% above SBI’s Higher Marginal Cost of Lending Rate shall be payable w.e.f. 16.07.2025 till the realization of the said amount.”
What might be some key legal takeaways for homebuyers?
ET Wealth Online has asked various lawyers about what might be some key legal takeaways from this judgement. Here’s what they said:
Aishwarya Gairola, Associate at Dentons Link Legal, says: “If a homebuyer wishes to safeguard their interests, the agreement for sale is the cornerstone of their rights.”
“The RERA mandates that any token or advance payment may only be accepted at the time of executing the agreement for sale. However, in practice, many developers present a cyclostyled, standard-form agreement to homebuyers shortly before execution, leaving little time for review or negotiation. It is therefore essential that homebuyers scrutinise the agreement carefully and verify whether its terms align with the representations made in marketing brochures, advertisements, and other promotional material.”
“While the agreement holds legal primacy, Courts have, in appropriate cases, considered written communications, transaction details and promotional material to determine the promoter’s representations and assess the buyer’s rights, especially where payments were accepted prior to execution of the agreement.”
Sana Khan, Associate Partner, SNG & Partners: In this matter, the homebuyer has sought refund along with interest and compensation without actually establishing the Promoter’s default under section 12 or section 18 of the Real Estate (Regulation and Development) Act, 2016. It is interesting to note that the allotee had wilfully signed an application form wherein he had agreed that if the allottee defaults in making timely payments or similar circumstances, the Promoter would be entitled to forfeit certain amounts. Subsequently, the homebuyer wanted to withdraw from the project on the ground of his financial hardships and inability to secure a home loan.
The present judgement has held that the forfeiture clause of the booking form was one-sided, unconscionable and unenforceable and directed the promoter to refund the amounts received from the allottee with interest and compensation towards legal cost.
This judgment should not become a precedent for allottees to block a flat/apartment in a project and then use the machinery of RERA to seek refund along with interest, if they are unable to make timely payment.
Since the past decade, both legislation and judiciary are taking steps to safeguard rights of homebuyers. At the same time, it is important that the allottees should also be aware as to what they are signing up for. The Real Estate Regulatory Authority has the responsibility of balancing the rights of homebuyers in the arena of the Act as well as ensuring that the real estate projects are completed.
While RERA is an ameliorative law for the class of homebuyers, principles of “Let the buyer beware” should be emphasised. Also, the fact that written contracts override oral assurances should be borne in mind. It is important that contractual obligations mutually agreed between the parties should not be diluted.