Delay In Handing Over Possession, Karnataka RERA Directs GVR Construction To Refund

Background Facts

The homebuyer (Complainant) booked Flat in the builder's (Respondent no 1) project named "Sai Kesari Nandan Enclave" situated at Hobli, Bengaluru for a total sale consideration of Rs. 33,00,000/- and entered into agreement for sale on 13.03.2017 with the first purchaser, and the builder represented by respondent No. 2.

Further, an assignment agreement was executed on 17.01.2019 between the homebuyer, the first purchaser, and the builder represented by respondent No. 2.

As per the agreement, the builder was supposed to hand over possession of the flat by 13.09.2018, with a grace period of three months (i.e., by 13/12/2018). The homebuyer paid the entire sale consideration to the builder. Then after, the builder executed the sale deed on 22.03.2019 but failed to hand over possession of the flat to the homebuyer.

Homebuyer Contended that Despite executing the sale deed on 22.03.2019, the builder failed to hand over possession of the flat to the homebuyer on promised time. The homebuyer has invested his hard-earned money and is paying a housing loan taken from LIC Housing Finance Limited while staying in a rented house.

Further the homebuyer learned that respondent No. 3 canceled the Joint Development Agreement (JDA) with respondent No. 1, as per an Arbitral Tribunal Order dated 04/2023. Therefore, the homebuyer filed complaint before the authority, seeking directions for the respondents to refund the amount with interest.

Observation and Direction by Authority

Authority observed that despite receiving entire sale consideration amount and executing sale deed in the favour of homebuyer, the respondent no 1 & 2 have failed to handover the possession of the flat till today. Therefore, respondents have violated the terms of agreement of sale, construction agreement, assignment agreement and Sale Deed.

Authority referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641], where it was held that if the builder fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the homebuyer's right under the RERA, 2016 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 noted that in the case of a delay in handing over possession, Section 18 of the Real Estate (Regulation and Development) Act, 2016, stipulates that if the allottees wish to withdraw from the project, the promoter is liable to return the amount received for the apartment, plot, or building, along with interest at the prescribed rate and compensation as provided under this Act.

Therefore, the authority directed Respondent no 1, 2 & 4 to refund ₹49,74,864/- to the homebuyer for failing to deliver possession of the flat within the promised timeframe under Section 18(1) of RERA, 2016.

Case -. Ennamoori Brahmaiah Versus GVR Construction & others

Citation - Complaint No: 00072/2024

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