Haryana RERA Orders Raheja Developers To Refund 2 Crores With Interest To Homebuyer

In a buy back scheme, the builder promises to buy back the flat from the homebuyer at a higher price after the project is finished.

Background Facts

In 2014, ICICI Securities Ltd., a subsidiary of ICICI Bank Ltd., contacted the homebuyer (Complainant), who is an NRI and native of Chennai, Tamil Nadu, to introduce investment opportunity n the builder's (Respondent) project Raheja's Revanta in Sector 78, Gurugram.

The scheme required the homebuyer to provide 25% of the funding, while ICICI Bank funded the remaining 75%. After three years, the homebuyer had two options, either leave the investment with a guaranteed return or take over the loan and buy the property.

A Memorandum of Understanding (MOU) dated 14.10.2014 was entered into by the parties, which outlined the scheme structure. The homebuyer, builder, ICICI Securities, and ICICI Bank entered into various agreements, including a tri-partite agreement and an agreement to sell.

As per the scheme, the homebuyer had the option to opt for the buy-back scheme. After three years, the homebuyer chose this option, but the builder began avoiding repayment. On 10.01.2017, the homebuyer reiterated his choice to proceed with the buy-back process within three years of booking the flat on 04.09.2014. The builder, through email dated 22.02.2018, informed the homebuyer that they will not be able to honor the buyback proposal due to unfavourable market conditions.

The homebuyer further contended that ICICI Bank started harassing him for instalment payments, which the builder was supposed to pay. Due to constant harassment, the homebuyer paid eight instalments on behalf of the builder, who only repaid one instalment.

Therefore, due to these situations, the homebuyer filed a complaint before the authority seeking a refund of the total amount with 18% interest.

Observation and Direction by Authority

The authority referred to Clause 8 of the MOU dated 14.10.2014, which stipulates that the homebuyer can request to cancel the booking within 33 to 36 months from the booking date. If the homebuyer does this in writing, the builder must cancel the booking within 60 days after the 36 months and pay a guaranteed premium of Rs. 1400/- per square foot.

The authority observed that, according to Clause 8 of the MOU, the buy-back scheme for the allotted unit was applicable from the 33rd to the 36th month from the date of booking, which is from June 2017 to September 2017. However, the homebuyer expressed his desire to withdraw from the project on 10.01.2017, which is before the agreed period mentioned in the clause 8.

The authority rejected the homebuyer's claim for a refund with 18% interest as per Clause 8 of the MOU because the homebuyer did not exercise the right of buyback within the prescribed period. Instead, the authority held that the homebuyer will receive interest on the refund as per Section 18 of the Real Estate (Regulation and Development) Act, 2016.

Therefore, the authority directed the builder to refund the amount of Rs. 2,21,89,587 paid by the homebuyer with 10.95% interest.

Case – Gowrishankar Versus M/s Raheja Developers Limited

Citation - Complaint no: 1685 of 2022