RERA Overrides Contract Act: Why Homebuyers Have an Absolute Right to Interest for Delayed Possession Without Giving Prior Notice, Regardless of Pre-RERA Agreements or Subsequent Force Majeure Events.

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Case: CCI PROJECTS PRIVATE LIMITED MUMBAI- 400066 v. RAJESH KUMAR CHAUDHARY AND ANR
Court: Bombay High Court
Date: 18-06-2026
Law: Real Estate (Regulation and Development) Act, Indian Contract Act, Maharashtra Ownership Flats (Regulation of the promotion of Construction Sale Management and transfer) Act.

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For decades, the Indian real estate sector operated on a playing field that felt decidedly tilted. Homebuyers often found themselves in a "take it or leave it" position, where project delays were common and legal remedies were buried under the fine print of the Indian Contract Act. A frequent defense used by developers was that if a buyer accepted a delayed flat without immediately "protesting" or giving formal notice, they waived their right to compensation. However, a landmark ruling by the Bombay High Court in CCI Projects Private Limited vs. Rajesh Kumar Chaudhary has fundamentally reshaped this dynamic, prioritizing the protective umbrella of the RERA Act over traditional contractual hurdles.

The Death of the 'Notice' Requirement

The most significant takeaway from this judgment is the court's refusal to let Section 55 of the Indian Contract Act, 1872, obstruct homebuyer rights. Traditionally, Section 55 suggested that if a person accepts a delayed performance of a contract, they cannot claim compensation unless they give notice of their intention to do so at the time of acceptance. Promoters argued that by continuing to pay installments and eventually taking possession, buyers "acquiesced" to the delay.

The High Court dismantled this argument, holding that Section 18 of the RERA Act provides an "unqualified and absolute" right to interest. The court observed that the statutory right under RERA is not fettered by the procedural requirements of the Contract Act.

"Section 18 of RERA Act gives an unqualified absolute statutory right to claim interest unimpeded by any condition, Section 55 of Contract Act lays fetters on that right making it subject to giving notice of intention to claim compensation."

This means buyers no longer need to worry that staying in a project or paying installments will be used against them as a "waiver" of their rights.

RERA’s Retroactive Reach is Sacrosanct

Promoters often attempt to escape RERA’s stringent penalties by arguing that their agreements were signed before the Act came into force in 2016. The court reiterated that RERA is retroactive in nature. It applies to all "ongoing projects" that were not completed at the time of its commencement. The judgment clarifies that even if an agreement was executed under the older MOFA (Maharashtra Ownership of Flats Act) regime, the moment the project falls under RERA, the promoter’s obligations are upgraded to meet the new statutory standards.

Silence is Not Consent

A common tactic among developers is to send unilateral communications "revising" the date of possession. In this case, the promoter argued that because the allottees did not respond to letters extending the deadline to 2018 or 2019, they had impliedly consented to the new dates. The court rejected this, noting that such communications are often mere "information" and do not constitute a bilateral amendment of the contract. The original date mentioned in the registered agreement remains the only "sacrosanct" date for calculating delay interest.

Force Majeure is Not a Blanket Excuse

The judgment provides a reality check on the use of the COVID-19 pandemic as a "get out of jail free" card for developers. While the court acknowledged that the pandemic was a force majeure event, it held that it cannot be used to excuse delays that occurred years prior.

"The force majeure event of Covid-19 was subsequent to the due date of performance by the Appellant and did not impact the performance of the contract by the Promoter."

If your possession was due in 2016, a pandemic in 2020 cannot be used to wipe out the interest owed for those four intervening years.

The Primacy of Special Law

At its core, this judgment is a masterclass in the legal principle that "special law prevails over general law". The Indian Contract Act is a general framework for all agreements, but RERA is a special enactment designed specifically to cure the power imbalance in the real estate sector. The court held that Section 89 of the RERA Act gives it an overriding effect over any inconsistent provisions in other laws. This ensures that the consumer-centric goals of RERA are not diluted by the technicalities of general contract law.

This ruling is a powerful reminder that the RERA Act was not just a set of new rules, but a fundamental shift in the legal philosophy of Indian real estate. By removing the burden of "formal protest" from the homebuyer, the Bombay High Court has ensured that the right to interest for delayed possession is not just a theoretical promise, but an enforceable reality.