Karnataka RERA Holds Ozone Urbana Infra Developers Liable For Failing To Complete And Hand Over Plot, Orders Rs. 31.46 Lakhs As Refund

Background Facts

Homebuyer (Complainant) booked Plot in the “Southend” project developed by the builder (Respondent) in 2021. Both parties signed an agreement for sale on 6 August 2021. The total sale price was Rs. 1,20,01,008.

The builder was expected to complete the project and hand over possession of the plot by July 2024. At the time of the agreement, the homebuyer had already paid Rs. 24,02,000 to the builder.

However, the builder did not complete the project and there has been no meaningful progress. After receiving a substantial part of the payment, the builder failed to carry out the construction work or hand over possession.

The homebuyer then cancelled the booking and asked for a refund. The builder agreed to return the amount by 15 August 2024. But the builder failed to refund the money. Therefore, being aggrieved, homebuyer filed complaint before the authority seeking refund of his paid amount with interest.

Observation and Direction by Authority

Authority observed that despite entering into an agreement for sale and receiving a substantial portion of the sale consideration from the homebuyer, the builder has neither completed the project nor handed over possession of the plot as promised in July 2024.

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 handover the possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the homebuyer 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.

Authority also referred the Supreme Court decision in the case of M/s Imperia Structures Limited v. Anil Patni & Anr, 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.

Authority held that the homebuyer is entitled to receive a refund along with interest as per Section 18 of the RERA Act, 2016. Therefore, the Authority directed the builder to refund Rs. 31,46,485 to the homebuyer within 60 days along with interest calculated at MCLR (Marginal Cost of Lending Rate) + 2% from 08.05.2021 till 01.12.2024.

Authority also directed the homebuyer to cooperate with the builder in cancelling the agreement for sale upon receiving the full refund amount.

Case – Abhishek Reddy Gujjala & Anr Versus M/S Ozone Urbana Infra Developers Pvt. Ltd.

Citation – CMP/00754/2024

Date – 3^rd April, 2025