Karnataka RERA Orders Tirumala Constructions To Refund 2.77 Crore To Homebuyer For Selling Flat To Third Party

The Authority had initially dismissed the homebuyer's two complaints seeking a refund with interest through an order dated 01.03.2021. Subsequently, the homebuyer challenged this order before the Karnataka Real Estate Appellate Tribunal, which remanded the matter back to the Authority for fresh consideration.

Background Facts

The homebuyer (Complainant) entered into a sale agreement on July 19, 2019, to purchase flat on the ground floor of the builder's (Respondent) project named “Thirumala K Park Central.” The builder promised a substantial discount if the homebuyer made a one-time payment for the entire sale price.

In response, the homebuyer paid the full sale amount of ₹1,83,00,000, taking advantage of the attractive discount offered. Recently, however, the homebuyer discovered that, without any consent or prior knowledge, the builder sold the same flat to third parties through an absolute sale deed dated November 11, 2019, despite the flat remaining incomplete.

Therefore, being aggrieved by the builder's act, Homebuyer filed complaint before the authority seeking refund of their paid up amount with interest.

Contentions of Builder

The builder denies all allegations made by the homebuyer, claiming they never executed the sale agreement dated July 19, 2019, nor received the stated sale consideration of ₹2,00,00,000 from the homebuyer. Further, builder contended that the homebuyer has fraudulently fabricated the sale agreement to extract money from them.

Observation and Directions of Authority

Authority examined the builder's claims, which included accusations that the homebuyer had created a fake sale agreement. However, the Authority found no evidence to support these allegations. Instead, the Authority accepted the homebuyer's evidence, including a bank statement that showed a ₹2 crore transfer to the builder, confirming that the sale agreement was valid.

Authority referred Supreme Court decision in M/s Newtech Promoters and Builders Pvt. Ltd Versus State of Uttar Pradesh & Ors, where it was held that if the builder fails to give possession of the flat within the promised time period under the terms of the agreement then the homebuyers right under the RERA, 2016 to seek refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

Further, Authority held that according to Section 18(1) of the RERA, 2016, if the builder fails to complete the project or provide possession of the apartment as stated in the sale agreement they must return the received amount along with interest and compensation.

Therefore, the Authority directed the Builder to refund Rs. 2,77,43,807/- to the Homebuyer within 60 days.

Case – Mr B Prashanth Versus Praveen Mohan & Others

Citation – CMP/200907/0006502

Date of order - 22/10/2024

Click Here To Read/Download The Order