MahaRERA Cancels Andheri Redevelopment Deal, Orders Refund For Fund Misuse

Tribunal Upholds Society’s Right To Terminate Developer For Escrow Diversion And Delays Under RERA

In a decisive order dated October 10, 2025, the Maharashtra Real Estate Regulatory Authority (MahaRERA) ruled in favor of Jai Hind Co-operative Housing Society Ltd., terminating its redevelopment agreement with M/s. Pinnacle Realty for serious violations under the Real Estate (Regulation and Development) Act, 2016 (RERA).

The society, which had obtained deemed conveyance in 2018, entered into a redevelopment pact in 2020 for its 40-year-old building, promising 56 rehabilitated flats, a ₹3 crore corpus fund, and completion by June 2023. However, by October 2025, construction had reached only 12% progress, while the developer defaulted on 20 months of transit rent and diverted ₹2.5 crore from the project’s RERA escrow account toward non-project expenses — a clear breach of Section 4(2)(l)(D) of RERA.

Following multiple defaults, 90% of society members passed a resolution to terminate the agreement and sought permission to pursue self-redevelopment or appoint a new developer. The developer objected, claiming municipal approval delays and inadequate notice, but the tribunal rejected these defenses.

MahaRERA’s Finding

MahaRERA found gross financial misconduct and dereliction of duty by Pinnacle Realty, noting violations of Sections 4, 7, and 11 of RERA. The tribunal emphasized that fund diversion and prolonged rent defaults caused undue hardship to displaced members and undermined the society’s ability to address structural safety risks.

Referring to Anand Nagar Co-operative Housing Society vs. Reliable Developers (2025), the Authority reiterated that developer accountability is paramount, and societies with deemed conveyance possess the legal autonomy to terminate contracts when developers breach financial or construction commitments.

The tribunal upheld the society’s termination resolution, observing that it satisfied RERA’s two-thirds consent threshold under Section 7(1)(a)(ii). MahaRERA dismissed the developer’s technical objections, ruling that procedural lapses cannot override allottee protection in cases of evident non-performance and fund misuse.

It further held that the society’s deemed ownership enabled it to take charge of redevelopment without further litigation delays — either through self-redevelopment or by inviting new bids under the 2019 Maharashtra Self-Redevelopment GR.

Order

Agreement Terminated: The redevelopment contract with M/s. Pinnacle Realty stands terminated with immediate effect.
Refund Ordered: Developer to refund ₹2.5 crore to the society’s RERA account within 60 days.
Compensation Granted: Society awarded ₹6 lakh for unpaid rent and member hardship.
Future Plan Submission: Society to submit a fresh redevelopment plan (self-led or new developer) to MahaRERA within 120 days, ensuring RERA and BMC compliance.

Broader Impact

This ruling underscores MahaRERA’s zero-tolerance policy toward fund diversion and delayed redevelopment, setting a firm precedent for financial transparency and member protection. It strengthens the position of societies that have completed deemed conveyance, empowering them to terminate non-performing developers without judicial delay.

Legal experts say the order will resonate across Mumbai’s 15,000+ aging cooperative societies, reinforcing resident-led control over stalled projects and improving trust in RERA’s redressal framework. The decision also signals MahaRERA’s support for self-redevelopment as a viable alternative to conventional builder-led models — balancing autonomy with regulatory oversight.