MahaRERA Cracks Down on Palais Royale Developer; Orders Asset Recovery for Unpaid Interest to IIFL

In a decisive enforcement action aimed at protecting homebuyers and financial stakeholders, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered coercive recovery proceedings against Palais Royale developer Honest Shelters Private Limited for failing to pay over 100 crores in interest dues to IIFL Finance Limited and IIFL Management Services Limited.
 
On January 16, 2025, MahaRERA issued a landmark order directing Honest Shelters to hand over possession of eight premium flats in the Palais Royale tower at Worli Estate, Lower Parel, along with occupancy certificates, and to pay interest accrued on the amounts paid for these flats in terms of Section 18 of the Real Estate (Regulation and Development) Act, 2016. The payments were to be made within 60 days.
 
However, the developer failed to meet these obligations within the stipulated timeline. Following IIFL’s execution applications, MahaRERA’s Adjudicating Officer has now issued recovery warrants under Section 40(1) of the RERA Act, empowering the District Collector to recover the outstanding interest amounts as arrears of land revenue.
 
The recovery proceedings could involve attachment of the developer’s properties, seizure of bank accounts, or other statutory enforcement measures. Legal experts say the move sends a strong signal to defaulting builders that MahaRERA will not hesitate to use its full enforcement powers.
 
The Palais Royale project — once billed as India’s tallest luxury residential tower — has been plagued by over a decade of delays, investor disputes, and litigation. MahaRERA’s latest order is seen as a major push towards delivering justice to buyers and financial institutions who have waited years for possession and compensation.
 
“This decisive action by MahaRERA sends a strong message to errant developers and reinforces that commitment to buyers and financiers must be honoured. IIFL will continue to take all legal steps necessary to protect its interests and ensure timely possession of the flats,” said Binay Kumar Mishra, Chief Legal Officer, IIFL Finance Limited.
 
With the Collector’s office now tasked with executing the recovery, all eyes will be on how quickly the long-pending dues are realised — and whether this high-profile case will set a precedent for stalled projects across Maharashtra. The value of each flat of the Palais Royale project listed in real estate market is at around Rs 80 crore making the value of eight flats close to Rs 650 crores in addition to interest to be recovered in excess of Rs 100 crore from Honest Shelters.