Haryana RERA Orders Interest To Homebuyer For Delayed Possession, Also Holds Agreement Is Biased

Background Facts

On 30.08.2012, the Homebuyer [Complainant] booked a flat measuring 1650 sq. ft. in the builder's [Respondent] project named Gurgaon Greens located in Sector-102, Gurugram, by paying a booking amount of Rs. 7,50,000/-.

The builder issued the provisional allotment letter for the flat on 28.01.2013, which contained very stringent, biased, and one-sided contractual terms. These terms included a clause that any breach by the Homebuyer would result in the forfeiture of 15% of the total consideration value. Additionally, the builder increased the total consideration value by adding various charges, justifying these as standard government levies. The builder also imposed a 24% delay payment charge but offered compensation at Rs. 7.50/- per sq. ft. per month for delayed possession.

Despite Homebuyer's objections on terms, the Homebuyer had no choice but to proceed due to the risk of forfeiture. The buyer's agreement was executed between the parties on 11.04.2013 for a total sale consideration of Rs. 1,24,85,084/-. According to clause 14(a) of the buyer's agreement, the builder promised to hand over possession of the booked flat within 36 months, with a five-month grace period from the start of construction, making the possession date 14.06.2016.

However, despite the Homebuyer paying Rs. 1,24,85,082 out of the total cost of the flat, the builder failed to hand over possession within the agreed timeframe. Aggrieved by the delay, the Homebuyer filed a complaint before the authority seeking monthly interest at 18% from the date of payment until the date of delivery of possession.

Observation and Direction by Authority

The authority observed that Clause 14(a) of the buyer's agreement, which outlines the possession terms, is heavily biased in favour of the builder. It includes vague and uncertain conditions, making it difficult for the Homebuyers to meet all the required formalities and documentation. The clause is so uncertain that even a single default by the allottee can render the possession terms irrelevant and the promise of timely possession meaningless.

Additionally, the authority observed that the buyer's agreement is unfairly biased in favour of the builder. While the Homebuyers were only entitled to delayed possession charges at Rs. 7.50 per sq. ft. per month, the builder could charge 24% interest per annum on delayed payments. This imbalance is unjust, as the builder cannot exploit their dominant position. The authority noted that the agreement's terms were one-sided and constituted unfair trade practices. Therefore, the authority held that these discriminatory terms and conditions are not final and binding on the Homebuyer.

Furthermore, the authority held that the builder violated Section 11(4)(a) of the Real Estate (Regulation and Development) Act, 2016, by failing to hand over possession of the flat within the promised timeframe. According to Clause 14(a) of the buyer's agreement, the builder promised to deliver possession within 36 months from the start of construction, with a 5-month grace period for applying for and obtaining the completion certificate.

Construction began on 14.06.2013, making the due date for possession 14.06.2016. The completion certificate was granted on 05.12.2018, and the builder offered possession to the Homebuyer on 12.12.2018. Therefore, the authority directed the builder to pay interest to the Homebuyer from the due date of possession until the date the possession offer was made, plus two additional months, at an interest rate of 10.85%.

Case – Arun Jain & another Versus M/S Emaar India Ltd.

Citation - Complaint No. 6767 of 2022