Plan Rejection Is Not Force Majeure: What the Bombay HC's 12 Year Delay Ruling Means for Buyers

The agreement was signed on February 2, 2008. The buyers paid the full Rs 5.51 crore for two units in a Mumbai building. Possession was promised by March 31, 2008, less than two months later. It came on February 15, 2020, after a delay the court counted at 11 years, 10 months and 15 days. The developer's explanation included the municipal corporation rejecting its proposals several times. On October 23, 2026, the Bombay High Court said that was no excuse.

In its judgment in DNM Trustee Services v. Victoria Enterprises, Interim Application (L) No. 2956 of 2026 in Commercial Suit No. 39 of 2015, the Bombay High Court held that rejection of a building plan by the planning authority does not constitute a force majeure event, and granted summary judgment for 9 percent simple interest on the full price for the entire delay. The case is from Mumbai, but its reasoning about delay interest and force majeure clauses is worth knowing for any Bengaluru buyer facing a long wait.

The short answer. Justice Sandeep V. Marne held that it is the promoter's duty to get plans sanctioned, that a buyer cannot be made to suffer if faulty plans are rejected, and that the developer's force majeure plea was vague and unsupported by a single document. Relying on the High Court's earlier ruling in Sanklecha Constructions, it said the liability to pay interest for delay is absolute and does not depend on the promoter's efforts. It awarded 9 percent simple interest, the rate in the parties' agreement, on Rs 5.51 crore from March 31, 2008 to February 15, 2020. The trade-off: the buyers got interest without a full trial, but at the contractual 9 percent, not the 12 percent they sought.

What happened with the delayed units?

According to the judgment, the developer agreed by a registered Agreement for Sale dated February 2, 2008 to sell Unit Nos. 503 and 504 in a building called Pittie Chambers, and the entire consideration of Rs 5,51,00,000 was paid. Clause 8 fixed possession on or before March 31, 2008 and allowed the buyers to terminate and get a refund with 9 percent simple interest if possession was not given.

A part Occupancy Certificate was issued only on July 24, 2019. After the buyers' side filed a suit, the developer told the court on February 10, 2020 that it would hand over possession, and did so on February 15, 2020. The units had meanwhile moved, through a family partition and a registered discretionary trust, to a trust whose trustee brought the suit. The court noted that the developer did not really deny the delay.

Why was plan rejection not force majeure?

Because getting plans approved is the promoter's own job. The developer pleaded that the Municipal Corporation of Greater Mumbai rejected its proposals several times, that plans and FSI potential changed, and that RERA was introduced. The court found the plea about rejections vague and lacking material particulars, with not even a single document annexed to show any rejection.

In any case, it said, it is the duty of the promoter to get the plans sanctioned and to construct the building accordingly. If the promoter submits faulty plans and invites rejection, the allottee cannot be made to suffer. Rejection of a plan by the planning authority does not constitute a force majeure event, and it cannot be contended by any stretch of imagination that it can take 12 years to get plans sanctioned. Our explainer on force majeure and RERA extensions covers how such pleas are treated under the Act.

Why is delay interest treated as absolute?

Because interest and compensation are different things. The court relied on the Supreme Court's ruling in Newtech Promoters, which described the allottee's right to refund under Section 18(1)(a) as not dependent on contingencies, and on the High Court's own decision in Sanklecha Constructions, which held that a promoter's obligation to return money with interest on demand under Section 18(1) is absolute and unqualified, with no discretion to relax the period or rate for genuine efforts.

The court said that liability to pay interest on delayed possession is distinct from compensation. Compensation may require evidence; interest on paid consideration for the delay period does not need a trial. Mitigating circumstances may be relevant to compensation, but they have no bearing on the promoter's liability to pay interest. The passage it quoted from Sanklecha goes further: the return of the amount with interest is the bare minimum an allottee must receive, it must be paid on demand, and it cannot be diluted by a regulator, tribunal or even the High Court by letting the promoter refund only after securing an Occupancy Certificate. Our guide to delay interest under Section 18 explains the buyer's options.

Why did RERA matter if the project was not registered?

The court applied the spirit of Section 18. It noted that the developer apparently had not registered the project, which lacked a completion certificate when RERA came into force, and that had it been registered, the developer would have been statutorily liable to pay interest under Section 18. Citing its earlier ruling in Mohammed Zain Khan, it said registration is not a precondition for a RERA complaint where a project is liable to be registered. It applied the spirit of Section 18 only to fasten liability to pay interest for delay.

It also rejected the developer's reliance on Section 79 of RERA, which the developer said bars the civil court's jurisdiction, because the developer had not registered the project and so could not raise that objection. Had the project been registered, it added, the buyers would have had a swifter remedy before MahaRERA.

How could the court decide without a full trial?

Through summary judgment in a commercial suit. The buyers' side applied under Order XIII-A of the Code of Civil Procedure, which, as the judgment explains, lets a court decide a claim in a commercial dispute, or part of it, without recording oral evidence. An application can be made after summons is served and before issues are framed. The court may grant summary judgment if the defendant has no real prospect of successfully defending the claim and there is no other compelling reason why it should not be decided before oral evidence.

The court found both conditions met for the interest claim. It said establishing a promoter's liability to pay interest on paid consideration does not require oral evidence. The developer had argued that the claims needed an evidentiary trial and that, with possession already given, interest could await the suit's outcome. The court disagreed on interest, while leaving other prayers, including completion of common amenities, outside this ruling.

Why 9 percent, and not 12 percent?

Because the parties agreed on 9 percent. The buyers sought 12 percent, relying on a Supreme Court decision that awarded 12 percent in different facts. The court said there was no basis for 12 percent, since Clause 8 of the agreement provided simple interest at 9 percent a year. It also declined to apply the rate under the Maharashtra RERA Rules, 2017, which it said ranged from 10.10 percent to 10.75 percent between May 2017 and February 2020. By our arithmetic, 9 percent simple interest on Rs 5.51 crore for the 4,338 days from March 31, 2008 to February 15, 2020 comes to about Rs 5.89 crore, though the decree, not this estimate, governs.

Costs in the application were left to abide the outcome of the suit.

What should Bengaluru buyers facing long delays do?

Separate your interest claim from your compensation claim, and do not accept force majeure on say so. This Mumbai ruling, like the Supreme Court and High Court decisions it relied on, treats interest for delay as the floor, not a favour.

1. Note the possession date and the delay clause, including any interest rate, in your agreement.
2. Check whether the project is registered with K-RERA and record its registration number.
3. Ask the builder in writing for documents behind any force majeure or approval delay claim.
4. Keep proof of every payment and the date each was made.
5. Calculate delay interest separately from any claim for compensation.
6. If the unit has passed to a family member or trust, keep the transfer documents.
7. Take advice on the right forum, since registration affects where you can file.

Frequently asked questions

Is rejection of building plans a force majeure event?

Not according to the Bombay High Court's October 23, 2026 judgment in DNM Trustee Services v. Victoria Enterprises. It held that getting plans sanctioned is the promoter's duty, that buyers cannot suffer if faulty plans are rejected, and that plan rejection by the planning authority does not constitute force majeure.

Does a builder's genuine effort reduce delay interest?

No, on the reasoning the court adopted. Relying on Sanklecha Constructions and the Supreme Court's Newtech ruling, it held the liability to pay interest for delay is absolute and does not depend on the promoter's efforts. Mitigating circumstances may matter for compensation, which is separate from interest.

What interest did the court award?

It awarded simple interest at 9 percent a year, the rate agreed in Clause 8 of the 2008 agreement, on Rs 5,51,00,000 from March 31, 2008 to February 15, 2020. It rejected the buyers' claim for 12 percent and declined to apply the Maharashtra RERA Rules rate.

Can a family trust that acquired the units claim delay interest?

Yes, in this case. The court called the developer's objection prima facie baseless, noting the units passed through a family partition and a registered discretionary trust, that possession was handed to the trust, and that under Section 2(d) of RERA an allottee includes a person who subsequently acquires the allotment.

Last updated 2026-10-29. PropNewz Team.