MahaREAT Grants Interim Relief to Homebuyer, Says RERA Jurisdiction Not Ousted by Arbitration Clause

The Maharashtra Real Estate Appellate Tribunal (MahaREAT), Mumbai, recently granted interim relief to a homebuyer of the "Rustomjee Crown" project, holding that an arbitration clause in an allocation letter cannot be deemed to oust RERA's jurisdictional power.

Additionally, in order to avoid future third-party complications, the Tribunal imposed a status quo on the subject flat and held that a developer cannot demand more than 10% of the consideration without a registered agreement for sale.

In October 2012, Sanju Daulatraj Desai, the applicant, had paid a total of Rs. 6.52 crores for a flat in the "Rustomjee Crown" project in Prabhadevi, Mumbai. The developer failed to sign a registered agreement for sale even after the allottee paying more than 20 percent of the total consideration. Despite repeated follow-ups, the project's completion date was often unilaterally altered between the years 2014 to 2025.

The developer eventually sold the unit to third-party buyers after abruptly terminating the allotment in June 2024 citing default in payments of subsequent demands. As a result, Maharashtra Real Estate Regulatory Authority (MahaRERA) was approached, which directed the case to arbitration without considering the legality of the allotment termination. Aggrieved, the allottee contested this through this appeal claiming that his rights were improperly disregarded. 

Two main central concerns was whether the Authorities were barred from exercising jurisdiction owing to the arbitration clause contained in the allotment letter and whether the developer could lawfully terminate the allotment for non-payment despite failing to register the agreement for sale as mandated by Section 13 of the RERA Act.

The applicant contended that the termination was a "pretextual" attempt to sell the apartment at a higher price and that RERA disputes cannot be arbitrated. They insisted that they were always "ready and willing" to fulfill their contractual obligations. The applicant, according to the developers, was a "party in breach" as they failed to register and misused the 10% limit to avoid payments. They contended that the flat had already been sold to legitimate buyers and the Tribunal lacked jurisdiction.

Relying on the Bombay High Court decision in M/s. Rashmi Realty Builders Pvt. Ltd. vs. Rahul Pagariya, the Tribunal led by a two-member bench, comprising of S. S. Shinde J. (Chairperson) and Shrikant M. Deshpande (Member), held that "the jurisdiction of Real Estate Regulatory Authority is not ousted, even if the agreement between the promoter and the allottee contains arbitration clause."

Regarding the termination, the Tribunal noted that the developer clearly violated Section 13 of RERA by accepting over 10% payment without registration. It held that once a developer has already received more than 10% of the flat price, it cannot demand any further payment unless a registered agreement for sale is executed.

Since the developer failed to do so, all subsequent payment demands were unlawful. Given that the applicant had expressed the readiness and willingness to purchase the property, it additionally ruled that terminating the allotment on that basis was contrary to law.

Accordingly, allowing the appeal application, the Tribunal concluded that the termination was unsustainable and allowing additional encumbrances would result in a "multiplicity of litigations".

Therefore, all respondents have been directed to preserve the status quo and desist from creating any new rights or interests in the subject apartment until the appeal is fully adjudicated.

Case Title: Sanju Daulatraj Desai v. Realgem Buildtech Private Limited & Ors.

Citation: 2026 LLBiz REAT (MH) 5

Case No.: Misc. Application No. 770 of 2025 in Appeal No. AT06/00774/2025

Coram: S. S. Shinde J. (Chairperson) & Shrikant M. Deshpande (Member-A)

Date of Decision: January 6, 2026

Appearances: Adv. Mr. Nimay Dave (Applicant); Adv. Mr. Abir Patel (Non-applicant No. 1); Adv. Mr. Vikram Jakhadi (Non-applicant No. 3)