Karnataka RERA Holds Krishna E Campus Private Limited Liable For Delayed Possession, Orders 58.4 Lakhs Interest To Homebuyer

Background Facts

Homebuyer (Complainant) purchased a flat in the builder's (Respondent) project named “Lapalazzo Residences” for a total sale consideration of Rs.74,00,000/-. The homebuyer and builder entered into agreement of sale cum construction on 15.02.2018.

Further, At the time of entering into the agreement, the homebuyer had paid a total sum of Rs. 66,60,000 on various dates to the builder. The builder was supposed to complete the work and hand over possession of the flat to the homebuyer by February 2022.

However, even though more than four years has passed since the agreed date, the builder has failed to complete the project and hand over possession of the flat.

Therefore, being aggrieved by the delay, Homebuyer filed complaint before the authority seeking competition of project and delay interest as per section 18(1) of RERA, 2016.

Contentions of Builder

The builder contended that the homebuyer filed complaint number 9932 before this Authority, acknowledging that both parties had agreed the terms and conditions were not included in the sale agreement. The builder also argued that they had previously offered a settlement proposal, which the homebuyer rejected.

Furthermore, the builder mentioned that they completed all development work and obtained the Occupancy Certificate on 14.02.2022. After receiving the Occupancy Certificate, the builder contended that they asked the homebuyer to come forward to take possession of the flat. However, according to the builder, the homebuyer did not respond to this request.

Observation and Direction of Authority

The authority referred to Paragraph 22 from the Supreme Court decision in the case of M/s Newtech Promoters and Developers Pvt. Ltd. vs. State of Uttar Pradesh & Ors [LL 2021 SC 641], where it was observed:

If we take a conjoint reading of subsections (1), (2), and (3) of Section 18 of the Act, we can identify several contingencies. First, the allottee can either seek a refund of the amount by withdrawing from the project. Second, such a refund could be made together with any interest that may be prescribed. Third, the allottee can also claim compensation payable under Sections 18(2) and 18(3) of the Act. Lastly, if the allottee does not intend to withdraw from the project, they are entitled to receive interest from the promoter for every month's delay in handing over possession at the rates that may be prescribed.

The authority held that principle laid down in the Newtech Promoters and Developers Pvt. Ltd (Supra) applies on the case.

Authority observed that as per section 14 of RERA, 2016 builder is duty bound to complete the project as per the sanctioned plan, layout plan and specification as approved by the competent authorities.

Based on these grounds, authority directed builder to pay Rs.58,43,461 /- to homebuyer as interest for delayed possession.

Case - Mariam Sheela Joseph Versus Krishna E Campus Pvt. Ltd

Citation – CMP/220622/0009658

Date of order – 22.10.2024