Himachal RERA Grants Relief To Non-Himachali Homebuyer, Directing Builder To Refund With Interest If State Land Laws Permission Is Not Obtained

Background Fact

The builder released an advertisement for his upcoming project, Himachal One, stating that non-Himachalis can also purchase flats in this project. Homebuyers were attracted by this advertisement and booked a flat in the project. The Agreement of Sale was signed on 31.10.2013, with the total price of the flat as per the agreement being Rs. 35,00,000. However, the agreement did not specify the date of possession.

Despite paying the total amount for the flat, the builder neither offered legal and valid possession nor executed the conveyance deed in favor of the homebuyer. Subsequently, on 23.10.2022, the builder and homebuyer executed another agreement, superseding the previous one from 31.10.2013.

Aggrieved by the non-execution of the conveyance deed, the homebuyers filed a complaint before the Himachal RERA.

Contention of the Builder

The builder contended that the homebuyer is not entitled to a refund because, under section 18 of the RERA, 2016, a homebuyer can claim a refund only if the builder fails or is unable to provide possession.

The builder also contended that, as per the agreement for sale, the homebuyer is supposed to abide by all the laws, rules, and regulations applicable in Himachal Pradesh. Therefore, whatever requirements need to be complied with by the homebuyer will be binding on them, and they are required to obtain requisite permission under Section 118 of the HP Tenancy and Land Reforms Act.

Furthermore, the builder contended that the advertisement of the promoter stating that non-Himachalis can buy only indicates that they are permitted to buy, but they must seek permission under the relevant laws applicable to the State of Himachal Pradesh.

RERA Order

HPRERA held that the acquisition of title to the property is the most important right in favor of the homebuyer, It is also one of the obligations of the builder, However, obtaining permission under Section 118 of the HP Tenancy and Land Reforms Act is not the builder's responsibility. Therefore, the builder cannot fulfill the obligation of executing the conveyance deed until the homebuyer obtains permission under Section 118 of the Act.

HPRERA referred relevant part of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act 1972, Which is read as follows:

Section 118 - Transfer of land to non-agriculturists barred.

2(h). A non-agriculturist with the permission of the State Government for the purposes that may be prescribed: Provided that a person who is non-agriculturist but purchase land either under clause (dd) or clause (g) or with the permission granted under clause (h) of this sub-section shall, irrespective of such purchase of land, continue to be a non-agriculturist for the purpose of the Act.

HPRERA granted a three-month period to the homebuyer to obtain the necessary approval under Section 118 of the HP Tenancy and Land Reforms Act, 1972, for the purpose of executing the conveyance deed. Furthermore, HPRERA directed the builder to execute the conveyance deed in favor of the homebuyer within one month if the homebuyer obtains permission under Section 118.

Additionally, HPRERA directed the builder to refund the amount of Rs. 35,00,000 paid by the homebuyer to purchase the flat with an interest rate of 10.85% from the date of filing this complaint in case the homebuyer fails to obtain the required permission under Section 118.

Case: Dr. Baljit Singh Sidhu and another VS Sh. Jagjit Singh Ahlawat and Suman Ahlawat

Citation: Complaint no.HPRERA2023019/C

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