West Bengal REAT Clarifies SBI MCLR To Be Applied For Calculating Interest On Delayed Refunds Under RERA
Pranav B Prem
The West Bengal Real Estate Appellate Tribunal (REAT) has clarified that the interest payable on delayed payments or refunds under the Real Estate (Regulation and Development) Act, 2016 must be computed based on the State Bank of India’s Marginal Cost of Lending Rate (MCLR) plus 2%, and not on the Prime Lending Rate (PLR). The Bench comprising Justice Rabindranath Samanta (Chairperson) and Dr. Subrat Mukherjee (Technical/Administrative Member) held that the MCLR has replaced the earlier benchmark rate system and represents the appropriate standard to ensure uniformity and fairness in RERA-related interest computations.
Background
The appeal arose out of a dispute concerning a bungalow unit named “Dopati” in a housing project at Khanjanpur, Shantiniketan, Bolpur, developed by the appellant-builder. The homebuyers had originally booked the bungalow on 9 September 2015 for ₹28.36 lakh and paid ₹7.09 lakh in instalments. Subsequently, they changed their booking to another bungalow named “Mohor”, executing an agreement for sale on 20 February 2016, but later reverted to their original choice “Dopati”. An allotment letter dated 23 December 2018 acknowledged receipt of the payment, though no fresh sale agreement was executed.
The homebuyers later withdrew from the project and approached the West Bengal Real Estate Regulatory Authority seeking a refund with statutory interest. On 7 September 2023, the Authority directed the builder to refund the principal along with interest. While the builder refunded ₹7.09 lakh on 15 July 2023, interest was not paid. When the builder failed to comply with further directions issued on 7 February 2025 to finalise interest calculation within 60 days, the Authority invoked the Bengal Public Demand Recovery Act, 1913, directing the District Magistrate, Birbhum to recover the dues. Aggrieved, the builder filed the present appeal before the Tribunal.
Issue Before the Tribunal
The primary issue before the Tribunal was the applicable benchmark rate for computing interest on refund—whether it should be the Prime Lending Rate (PLR) or the Marginal Cost of Lending Rate (MCLR) of the State Bank of India. Rule 17 of the West Bengal Real Estate (Regulation and Development) Rules, 2021 prescribes the Prime Lending Rate of SBI plus 2% as the applicable rate. However, the ambiguity arose as SBI no longer uses PLR as a benchmark for lending, having replaced it with the MCLR system.
Tribunal’s Findings
The Tribunal noted that several other States—including Maharashtra, Karnataka, Tamil Nadu, and Assam—have already adopted a uniform approach of using SBI’s MCLR plus 2% for determining interest payable under RERA. It also referred to the Supreme Court’s decision in Bikram Chatterji v. Union of India (2022), where it was held that from 1 April 2016, the MCLR replaced the earlier Base Rate as the relevant benchmark for interest computations. Accordingly, the Tribunal held that interest payable under RERA orders in West Bengal should also be calculated using the MCLR plus 2%, aligning the State with the national standard and ensuring consistency in regulatory enforcement.
Exercise of Appellate Powers
Having settled the applicable rate, the Bench considered whether to remand the matter to the Authority for recalculating the amount. Referring to the Supreme Court’s ruling in SREI Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd. (2018) and invoking Order 41 Rule 33 of the Code of Civil Procedure, the Tribunal held that it could itself determine the matter to avoid unnecessary delay. The Tribunal accordingly directed that ₹5,01,084 along with accrued interest be released to the homebuyers, and ₹99,439 with accrued interest be refunded to the builder.
Recommendation to the State Government
Before parting with the matter, the Tribunal observed that Rule 17 of the West Bengal RERA Rules, 2021, which presently refers to the Prime Lending Rate, needs amendment to clearly specify SBI’s MCLR or any future benchmark rate as notified by the bank. This clarification, the Bench observed, would help avoid further disputes over applicable rates and ensure uniform implementation of RERA provisions across States.
Allowing the appeal partly, the Tribunal set aside the Authority’s earlier recovery direction and substituted it with its own computation order, confirming that interest on delayed refunds must be calculated based on SBI’s MCLR plus 2%. By aligning West Bengal’s position with national judicial and regulatory standards, the Tribunal has ensured clarity and consistency in interest calculation under the Real Estate (Regulation and Development) Act.
Appearance
For the Appellant: Mr. Aranyak Saha, Mr. Saswata Ganguly, Advocate
For the Respondents: Mr. Soumalya Ganguli, Mr. Debdut Sen, Advocates
Cause Title: Amitava Samanta Versus Saswati Ghosh & Anr
Case No: WBREAT Appeal No.017/2025
Coram: Justice Rabindranath Samanta (Chairperson), Dr. Subrat Mukherjee (Technical/Administrative Member)
