Karnataka RERA Directs Mantri Developers To Pay 42 Lakh Rupees To Homebuyer As Interest For Delayed Possession

Background Facts

The homebuyer (Complainant) and her husband booked a flat in the builder's (Respondent) project named "Mantri Webcity 2A" situated on Hennur Main Road, Bengaluru, by entering into an agreement of sale and a construction agreement, both dated 11th November 2014. Further, in order to purchase the flat, the homebuyer paid an amount of ₹52,67,267/- to the builder.

As per the agreement for sale, the builder was duty-bound to hand over possession of the flat on or before the end of October 2016, with a six-month grace period. However, even after more than five years, the builder failed to complete the project and hand over possession to the homebuyer, which, according to the homebuyer, has led to their financial hardship and mental agony. Therefore, the homebuyer filed a complaint before the authority seeking possession and interest for the delay.

Contentions of the Builder

The builder contended that there was a Nala (drain) at the time of obtaining the Sanction Plan. With permission from the authorities, the Nala was shifted to the edge of the property. Due to this, construction work in the project was stopped from 4th May 2016 to 19th March 2019.

Additionally, the COVID-19 pandemic further stalled all developmental work. Despite these constraints, the builder has handed over 128 out of 334 apartments. Around 120 sale deeds have already been registered in favor of the allottees, subject to obtaining the occupancy certificate from the authority, which will be applied for in November 2020.

Observation and Direction by Authority

The Authority held that the builder failed to hand over possession of the flat to the homebuyer within the agreed timeframe, despite receiving a substantial sale consideration. According to the sale agreement, possession was to be delivered by the end of October 2016, with a grace period extending to the end of April 2017.

The Authority noted that the homebuyer had paid a significant amount for the flat and that the builder's failure to deliver possession, even after the delay of six years is unjustified. Therefore, the homebuyer is entitled to claim interest for the delay from the builder.

Consequently, the Authority directed the builder to register the sale deed for the flat and pay ₹42,87,427/- to the homebuyer as interest for the delay in handing over possession, within 60 days.

Case – Mrs. Shruti Gautam Versus M/S Mantri Developers Pvt Ltd

Citation - CMP/200402/0005486