Karnataka RERA Orders Refund To Homebuyer After Builder's Failure To Provide Land Within Agreed Timeline

Background Facts

The Homebuyer (Homebuyer), who booked Plot No. 59 in the Excise Layout project situated at Doddachimmanahalli Village, Kundana Hobli, Devenahalli Taluk, Bengaluru Rural District, proposed by M/s State Excise Multipurpose Cooperative Society Limited (Respondent No. 2) and M/s Sree Krishna Developers and Promoters (Builder), was allotted the plot on 14/11/2019.

The allotment, signed by the President of the State Multi-purpose Cooperative Society Limited and the Builder, Shree Krishna Developers & Promoters, stipulated a total sale consideration of Rs.9,17,220/-. The Homebuyer has paid a total amount of Rs. 7,37,100.

The society advertised a proposal to develop the Excise Layout at IVC 320 feet road, situated 6 kilometers away from NH7 and 7 kilometres from Yelahanka-Doddaballapur Main Road. The advertisement disclosed various dimensions of sites available for sale, along with the rate per square foot and details regarding down payment and instalments, with the rate per square foot fixed at Rs.699/-.

However, the Builder sent a letter dated 3/11/2021 to the Homebuyer, demanding payment of Rs.950/- per square foot instead of the earlier agreed price. Despite several requests, the Builder did not paid attention to the lawful request of the Homebuyer. Hence, the Homebuyer, along with other aggrieved persons, filed a complaint before the Registrar of Cooperative Societies on 13/4/2022. Despite collecting all three instalments until 2019, the developer has not completed the layout as of 2022.

Therefore, the Homebuyer has filed a complaint before Karnataka RERA seeking relief in the form of direction to the Builder to refund the amount paid along with interest in connection with this complaint.

Observation and Direction by Authority

The Authority observed that the basis of the Homebuyer's claim relies upon an allotment letter lacking essential details regarding the description and location of the property in question. Therefore, the Authority held that this deficiency poses a significant obstacle to the clear identification of the subject property and complicates the process of granting the relief sought by the Homebuyer. However, since the respondents failed to file objections in their support, the Authority, upon careful consideration of the evidence presented by the Homebuyer, accepts the Homebuyer's claim as legitimate.

Furthermore, the Authority observed that the Homebuyer had paid a sum of Rs. 7,37,100/- to Builder for the purchase of the site. Therefore, when Builder received part of the sale consideration from the Homebuyer with the assurance of providing a site, their subsequent failure to fulfill their obligation undoubtedly entitles the Homebuyer to reclaim the amount paid to Builder. Consequently, Builder is liable to refund the amount along with interest to the Homebuyer.

Additionally, the Authority noted that the Homebuyer had filed a memo of calculation, claiming Rs. 12,42,494, whereas Builder did not submit any calculation memo. Therefore, the Authority directed Builder to pay the sum of Rs. 12,42,494/- towards refund, with interest, to the Homebuyer within 60 days from the date of this order.

Case – Uma Maheshwari Versus Shree Krishna Developers & Promoters & Another

Citation - COMPLAINT No: CMP/UR /221017/0010108