Karnataka RERA Orders Mantri Developers To Pay 48 Lakh Rupees To Homebuyer As Interest For Delay In Handing Over Possession

Background Fact

The homebuyer (Complainant) initially booked flat (F-701) in the builder's (Respondent) “Mantri Webcity” project in 2013 for a total sale consideration of Rs. 74,52,281. Subsequently, this flat was cancelled, and in January 2014, a new flat (G-503), was allotted to the homebuyer for a total sale consideration of Rs. 74,94,224.

As per the agreement and construction agreement both dated 23-12-2013, the builder promised to complete the project and hand over the flat to the homebuyer by 31-07-2016. However, despite the homebuyer paying Rs. 68,50,000 to the builder, the builder failed to complete the project and deliver possession of the flat within the agreed timeframe.

Due to this delay, the homebuyer filed a complaint before the authority, seeking interest for the delay in handing over possession.

Contentions of Builder

The builder contended that the possession date, as per the construction agreement, depended on receiving the occupancy certificate from the authority. They argued that the delay was caused by unforeseen events beyond their control, such as labor strikes, shortages of essential building materials like steel, sand, and cement, as well as pending legal or regulatory approvals.

Observation and Direction by Authority

The Authority observed that there is a clear delay in handing over the possession of the flat and given that the homebuyer has already paid Rs. 68,50,000 to the builder for the flat purchase, the homebuyer is entitled to interest for the delay period until possession is transferred under Section 18 of RERA, 2016.

The Authority relied on the Supreme Court decision in M/s Newtech Promoters and Builder Pvt. Ltd vs. State of Uttar Pradesh & Ors, wherein it was held that if the Promoter fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the Allottees right under the Act to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

Therefore, the Authority holds the builder accountable for violating Section 18 of RERA, 2016 due to its failure to offer possession within the stipulated timeframe. Hence, the Authority directed the builder to pay Rs. 48,41,855/- to the homebuyer as interest for the delayed period.

Case – Shreyanshu Pavas Versus Mantri Developers Pvt. Ltd

Citation - Complaint No: CMP/200116/0005094

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