West Bengal REAT Clarifies That Interest On Delay Shall Be Calculated Using SBI MCLR Rate

West Bengal Real Estate Appellate Tribunal (“Tribunal”) comprising Justice Rabindranath Samanta (Chairperson) and Dr. Subrat Mukherjee (Technical/Administrative Member) clarified that interest payable under the RERA order shall be computed based on the State Bank of India's Marginal Cost of Lending Rate (“MCLR”) plus 2%, rather than the Prime Lending Rate (PLR). Rule 17 of the West Bengal Real Estate (Regulation and Development) Rules, 2021 specifies the rate of interest as the Prime Lending Rate of SBI plus 2%. The issue before the Tribunal was therefore to determine which lending rate should apply, the SBI Benchmark Prime Lending Rate (BPLR) or the MCLR. Background Facts Homebuyers (Respondents) had booked a bungalow named “Dopati” in a project at Khanjanpur, Shantiniketan, Bolpur developed by the builder (Appellant). The booking was made on 9 September 2015 for a total price of Rs. 28,36,000 and Homebuyers paid Rs. 7,09,000 in four instalments through cheques. Homebuyers later changed their preference to another bungalow in the same project called “Mohor” and an agreement for sale was executed on 20 February 2016. Eventually, Homebuyers again decided to go back to their original choice “Dopati”. In November 2018 Homebuyers informed the builder of their decision and an allotment letter dated 23 December 2018 was issued acknowledging payment of Rs. 7,09,000. However, no fresh agreement for sale followed. Homebuyers later withdrew from the project and approached the Authority seeking refund of the amount paid with statutory interest. On 7 September 2023 Authority directed builder to refund principal amount along with interest to homebuyers. While builder refunded Rs. 7,09,000 on 15 July 2023 but interest was not paid. Homebuyers then filed execution proceeding to recover interest. On 7 February 2025 Authority directed both parties to finalise interest calculation and complete payment under 60 days. When builder failed to comply then Authority passed an order on 29 May 2025 directing District Magistrate, Birbhum to recover dues under Bengal Public Demand Recovery Act, 1913. Aggrieved by this order the builder filed the present appeal before the Tribunal. Observation and Direction by Authority Tribunal observed that states like Maharashtra, Karnataka, Tamil Nadu and Assam follow a uniform approach of using SBI's highest MCLR plus 2% as the benchmark for calculating interest. It also relied on the Supreme Court's decision in Bikram Chatterji v. Union of India (2022) which clarified that MCLR applies from 1 April 2016 while the Base Rate applies for earlier periods. Once the applicable rate was settled, the Tribunal considered whether the matter should be sent back to Authority for recalculation. Referring to SREI Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd. (2018) and invoking its powers under Order 41 Rule 33 of the Code of Civil Procedure, it held that it could decide the issue itself without remanding the case. Tribunal then directed that Rs. 5,01,084 with accrued interest be released to the homebuyers and Rs. 99,439 with accrued interest be refunded to the builder. Tribunal also recommended that Rule 17 of the West Bengal RERA Rules, 2021 be amended to clearly specify the benchmark rate as MCLR or any future rate notified by SBI. Case – Amitava Samanta Versus Saswati Ghosh & Anr Citation - WBREAT/APPEAL NO. – 017/2025Click Here To Read/Download The Order

West Bengal REAT Clarifies That Interest On Delay Shall Be Calculated Using SBI MCLR Rate

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West Bengal REAT Clarifies That Interest On Delay Shall Be Calculated Using SBI MCLR Rate

Aryan Raj

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