MahaRERA Circular 50/2024: Bombay High Court–Backed SOP for Cancellation of Agreements under RERA and Relief for Developers
Introduction
While the Real Estate (Regulation and Development) Act, 2016 (“RERA”) was enacted to ensure transparency and timely payments in real estate transactions, persistent defaults by allottees in adhering to agreed payment schedules continue to pose a significant challenge for promoters. Such defaults disrupt anticipated cash flows, delay project completion timelines, and trigger cascading financial consequences including liability to pay interest to compliant allottees and the risk of loan defaults with lenders.
In response to these recurring challenges, the Maharashtra Real Estate Regulatory Authority (“MahaRERA”) has issued an important circular introducing a Standard Operating Procedure for the execution and registration of deeds of cancellation. The circular1 seeks to fill a long-standing procedural gap under the Real Estate (Regulation and Development) Act, 2016.
Notably, the circular follows judicial scrutiny by the Bombay High Court and marks a significant step toward strengthening enforcement under RERA, while bringing greater procedural clarity and certainty for promoters, allottees, and registration authorities.
Table of Contents
Statutory Framework and the Procedural Gap under RERA
Section 11(5) of the Real Estate (Regulation and Development) Act, 2016 permits a promoter to cancel an allotment strictly in accordance with the terms of the agreement for sale. Its proviso protects allottees by allowing them to approach the Authority where a cancellation is unilateral, without sufficient cause, or contrary to the agreement.
However, while RERA recognises the promoter’s right to terminate in cases of default, it does not prescribe a mechanism for effecting such termination through registration. As a result, even a validly terminated agreement continues to subsist on the registration records unless a deed of cancellation is executed and registered.
This gap creates a practical impasse: where an allottee refuses to cooperate, promoters are unable to register the cancellation or resell the unit. In such situations, promoters are compelled to seek directions from the Maharashtra Real Estate Regulatory Authority under Section 31 to enforce the termination and secure consequential relief.
Case of Macrotech Developers – Background and Proceedings2
The situation of the procedural stalemate was specifically addressed in a notice of complaint filed by Macrotech Developers Ltd. (“MDL”) against non-compliant allottees with MahaRERA. The project had received several payments that were overdue. As such, MDL forwarded a notice of cancellation dated May 13, 2021, to the allottees. Since the allottees did not comply with the terms of the termination notice, MDL proceeded with a complaint against the allottees to seek orders for unauthorised registration of the deed of cancellation.
MDL requested that a qualified person (which could include a person appointed by MahaRERA) execute and register the deed of cancellation for all allotters and directed the Sub-Registrar of Assurances to register the deed of cancellation. According to a decision made by MahaRERA on August 14, 2024, they allowed staff from MDL to enforce all their requests through the proceeding as described in the complaint. If the allotters did not comply with MahaRERA’s directive, then MDL would have to enforce it using Section 40 of RERA. The latest decision regarding these requests was made by The Adjudicator on November 28, 2024 through an order issued with the jurisdiction of The Adjudicator. The Adjudicator’s order directed The Sub-Registrar of Assurances to cancel the original registered agreement for sale.
The Bombay High Court intervened
On 6 October 2025, the Bombay High Court ordered that because the original complaint had been allowed, that the authority did have the power to cancel, but that in addition, the authority should have appointed a person to carry out the deed instead of ordering the sub-registrar to unilaterally carry it out, which is not allowed by law.
The ruling by the Bombay High Court was to clarify that registered documents cannot unilaterally be cancelled and that due process must be followed as set forth in the law.
MahaRERA Circular 50/2024: SOP (Standard Operating Procedure) for Default
MahaRERA Circular dated November 18, 2025, is based on the decision of the Bombay High Court and as such creates a Standard Operating Procedure regarding executing/registering agreements for sale and deeds of cancellation/other documents as per Division Bench MRs order.
Under the provisions of the Circular, if the Bombay High Court directed a promoter/allottee to execute/register an agreement for sale or deed of cancellation, and the directed party does not comply, then MahaRERA will appoint a suitable person to execute/register those documents on behalf of the directed party. To enforce the appointed person’s powers, the Bombay High Court’s interim order should direct the concerned Registrar of Assurances to register whatever that appointed person executes.
The Circular clarifies that the provisions apply to all outstanding non-compliance issues that are completely resolved from the date of the Circular and determined in terms of a final order, and will create uniform and consistent enforcement proceedings before MahaRERA.
It also does not clarify how the money paid by the allottee will be treated, which is to be dealt with separately.
Consequences of the Real Estate Sector
Consequences for Developers
Developers get to unlock all of the inventory that was previously stuck due to unregistered cancellations. As a result of this regulation, developers are able to legally cancel and register the cancellation deeds even when the allottees do not cooperate in any way with the registration process. Therefore, the developers will now be able to re-sell the available units and improve the developers’ cash flow. In addition, developers will be able to mitigate interest payments owed due to project delays. Furthermore, this regulation establishes a clear and consistent procedure for developers to create and file the cancellation documents that are created in accordance with the MahaRERA. In this way, it allows for a uniform application of the MahaRERA and for MahaRERA to apply its authority in accordance with the guidelines established by the courts.
Consequences for Sub-Registrars
The circular provides sub-registrars with a very clear statement that the unilateral cancellation of a registered instrument is prohibited. In addition, it provides a very clear, lawful process for registering the deeds created by fit and proper persons appointed for this purpose by the allottees; therefore, this new regulation provides for a streamlined registration process and greater clarity regarding the implementation of the registration process.
Consequences for Allottees
The circular confirms that the failure to comply with the directions of the MahaRERA does not give the allottees any type of procedural advantage in a challenge to an order of termination. Consequently, after the determination of any such challenge, the allottees will no longer have to provide their cooperation for the completion of registration procedures. The circular balances the protection of the allottees’ rights while protecting against the misuse of procedural loopholes.
Conclusion
MahaRERA has created a more effective enforcement framework for RERA with the release of Circular No. 50/2024. Essentially, this Circular provides a clear, lawful and workable solution for situations where allottees have defaulted on payments and where cancellations have been made without registering them, while clarifying the implications of the Bombay High Court’s decision regarding these situations.
There remain aspects of the Circular that need clarification, such as whether or not completed execution proceedings will fall under it and how payments made from allottees will be handled. However, this Circular represents an important step forward in clarifying the issues surrounding cancellations of allotments. Additional guidance, such as creating a standard template for cancellation deeds and requiring public notice prior to completion of execution processes, would increase the level of fairness and transparency associated with the cancellation process.
At this time, the Circular provides an adequate structure for resolving disputes related to cancellation of allotments, which further establishes MahaRERA as an effective regulatory agency for all those involved in RERA.
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