Haryana RERA Granted The Homebuyer Permission To Withdraw From The Project Due To The Delayed Possession

Background Facts

The Homebuyer (complainant) purchased an apartment in Tower A of the Provence Estate project from the builder (respondent), with a basic sale price of Rs. 3,24,80,000. As per the agreement for sale, possession was to be provided within 36 months from the commencement of construction. Despite having paid Rs. 3,10,44,968 by December 24, 2013, the builder failed to complete construction.

On November 15, 2017, the builder initially requested Rs. 31,23,685.62 from the Homebuyer. When the Homebuyer didn't comply, a reminder notice for the same amount was sent by the builder one year later, on November 15, 2018. Then, on July 19, 2019, the builder made additional demands, claiming the apartment would be ready for occupancy by August 19, 2019. However, despite these assurances, the builder sent an offer of possession on September 28, 2019, alleging that an application for an occupancy certificate had been made, even though construction was still ongoing.

In response, on November 5, 2019, the Homebuyer reiterated the builder's failure to meet the terms of the agreement and demanded a refund. Despite this, on November 11, 2019, the builder sent another letter of possession, claiming to have obtained an occupancy certificate on October 29, 2019, and demanded payment.

Due to prolonged delays, the Homebuyer filed the Corporate Insolvency Resolution Process (CIRP) application before the National Company Law Tribunal (NCLT) under Section 7 of the Insolvency and Bankruptcy Code, seeking Rs. 5,40,93,077 from the builder. On November 28, 2019, the NCLT initiated the CIRP against the builder. Subsequently, an interim resolution professional was appointed. The IRP then notified the builder of project completion on June 22, 2020, urging the Homebuyer to take possession. However, upon inspection, the Homebuyer found the unit and common areas incomplete.

Despite court orders to complete the project by March 3, 2023, the builder persisted in making further demands. On November 17, 2022, the Homebuyer responded, highlighting the builder's liability for interest due to the delay in possession. However, on December 1, 2022, instead of settling accounts, the builder arbitrarily cancelled the allotment letter. As a result, the Homebuyer sought relief from HARERA, demanding a refund of the paid amount along with prescribed interest.

RERA Verdict

The Authority holds the builder responsible for violating the Real Estate Regulation and Development Act, 2016, due to its failure to deliver possession on time. Consequently, it granted the Homebuyer the right to withdraw and demand a refund with interest under Section 18(1) of the Act.

The Authority dismissed the builder's claim that delays were caused by force majeure events such as NGT orders, government approval delays, and material shortages. It held that these events are routine events and should have been anticipated by the builder.

Regarding the relief sought by the Homebuyer, the Authority directed the builder to refund the entire paid-up amount along with the prescribed rate of interest. It held that Clause 3.1 of the buyer's agreement clearly stipulated the possession timeline, which the builder failed to adhere to.

In determining the admissibility of prescribed interest rates, the Authority established the prescribed rate of interest at 10.85% per annum, in accordance with Rule 15 of the Haryana Real Estate (Regulation and Development) Rules, 2017.

Authority placed reliance on Rule 15 of Haryana RERA Rules which is read below:

Rule 15: Interest Payable by Promoter and Allottee

An allottee shall be compensated by the promoter for loss or damage sustained due to incorrect or false statement in the notice, advertisement, prospectus or brochure in the terms of section 12. In case, allottee wishes to withdraw from the project due to discontinuance of promoter's business as developers on account of suspension or revocation of the registration or any other reason(s) in terms of clause (b) sub-section (I) of Section 18 or the promoter fails to give possession of the apartment/ plot in accordance with terms and conditions of agreement for sale in terms of sub-section (4) of section 19. The promoter shall return the entire amount with interest as well as the compensation payable. The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest marginal cost of lending rate plus two percent. In case, the allottee fails to pay to the promoter as per agreed terms and conditions, then in such case, the allottee shall also be liable to pay in terms of sub-section (7) of section 19:

Provided that in case the State Bank of India marginal cost of lending rate (MCLR) is not in use, it shall be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

In conclusion, the Authority found that the builder violated RERA provisions and allowed the Homebuyer to withdraw from the project. The Authority also directed the builder to refund the entire amount paid by the Homebuyer with 10.85% per annum interest.

Case : Deepak Gupta V/S M/S Jasmine Buildmart Pvt. Ltd and Sanjay Gupta & Ekta Gupta V/S M/S Jasmine Buildmart Pvt. Ltd

Citation: Complaint No. 7560 of 2022 and others

Counsel of Complainant: Sambit Nanda

Counsel of Respondent: Shivam Rajpal

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