Karnataka RERA Orders Builder To Pay Interest To Homebuyer For Delayed Possession In GM Global Techies Town Project

Background Facts

The homebuyer (Complainant) booked a flat in the builder's (Respondent) project named GM Global Techies Town Tower C, located in Electronic city, Bengaluru Urban. The homebuyer entered into a sale agreement on 10.03.2017 and a construction agreement on 10.04.2017 with the builder for a total price of Rs. 43,27,000.

As per the agreement, the builder was supposed to complete the project and hand over possession of the flat by 10.10.2021, with a six-month grace period. However, despite paying 95% of the consideration, the builder failed to hand over the flat with the agreed amenities on time.

Aggrieved by the delay, the homebuyer filed a complaint before the authority. In response, the builder unilaterally cancelled the booking of the flat on 25.01.2024 through a legal notice. Therefore, the homebuyer seeks relief for interest for the delay, possession of the flat, and the issuance of an occupancy certificate.

Direction and observation by Authority

The Authority observed that there is a clear delay in handing over the possession of the flat and given that the homebuyer has already paid a significant amount to the builder for the flat purchase, the homebuyer is entitled to interest for the delay period until possession is transferred under Section 18 of RERA, 2016.

The Authority relied on the Supreme Court decision in M/s Newtech Promoters and Builder Pvt. Ltd vs. State of Uttar Pradesh & Ors, wherein it was held that if the Promoter fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the Allottees' right under the Act to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

The Authority referred to Section 18(1) of the Real Estate Regulation and Development Act 2016, which reads as follows:

18. Return of amount and compensation.

(1) If the promoter fails to complete or is unable to give possession of an apartment, plot, or building, —

(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or

(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:

Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.

Therefore, the Authority holds the builder accountable for violating Section 18 of RERA, 2016 due to its failure to offer possession within the stipulated timeframe. Hence, the Authority directed the builder to pay Rs. 9,92,465/- to the homebuyer as interest for the delayed period.

Case – Sudipta Majumder Versus M/S Gulam Mustafa Enterprises Pvt. Ltd

Citation - COMPLAINT NO: CMP/220908/0009993