Delay In Handing Over Possession, Karnataka RERA Directs Ozone Urbana Infra Developers To Refund

Background Facts

The homebuyer (Complainant) purchased a flat in the builder's (Respondent) project named Urbana Avenue, which was part of the integrated township project Ozone Urbania.

To purchase the flat, both the builder and the homebuyer entered into a sale agreement on September 24, 2019. Further, on September 26, 2019, the homebuyer entered into a tripartite agreement with the builder and HDFC to avail a housing loan for the flat.

According to the agreement, the builder was supposed to hand over the flat by December 2022, with a 6-month grace period. However, despite the homebuyer paying Rs. 34,21,246 out of the total cost of Rs. 57,08,745, the builder failed to hand over possession of the flat on time.

The homebuyer contended that he purchased flat with an intention to have his own home, but due to the delay, he has to live in a rental house and pay off the loan. Additionally, his money is stuck with the builder, and he is suffering from mental stress due to the builder's negligent actions.

Therefore, Aggrieved by the delay, the homebuyer decided to withdraw from the project and filed a complaint before the authority seeking a refund with interest.

Observation and Direction by Authority

The authority observed that despite entering into a contract to hand over the flat to the homebuyer by June 2023 (including 6 Month grace period) and receiving Rs. 34,21,246 out of the total cost, the builder has failed to follow the terms of the agreement and has not handed over possession of the flat. Therefore, the authority held that the homebuyer is entitled to a refund of the entire amount with interest.

Authority referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641], where it was held that if the builder fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the homebuyer's right under the RERA, 2016 to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

The authority also referred the Supreme Court decision in the case of M/s Imperia Structures Limited v. Anil Patni & Another, where it was held that under Section 18 of the RERA Act, if a builder fails to complete or give possession of an apartment by the specified date, the builder must return the amount received if the homebuyer wishes to withdraw from the project.

Therefore, the authority allowed the homebuyer to withdraw from the project and directed the builder to refund Rs. 49,57,770 to the homebuyer within 60 days.

Case – Shankar Ganiger Versus Ozone Urbana Infra Developers

Citation - Complaint No.: 01622/2023