Karnataka RERA Orders Ozone Elegant Developers To Pay Interest, Hand Over Possession Of Flat To Homebuyer

Background Facts

A homebuyer purchased a flat in the builder's project named Promenade (now renamed WF 48) under a cashback scheme.

On June 23, 2016, the homebuyer entered into an agreement for the sale and construction of the flat. The agreement required the homebuyer to make payments of Rs. 26,87,728 in June 2016, June 2017, June 2018, and June 2019. The homebuyer made payments in June 2016 and June 2017 as required.

Despite there being no construction activity at the project site, the builder issued demand notices and collected three payments in June 2016, June 2017, and June 2020 from the homebuyer. When the homebuyer requested a refund for the third payment, the builder offered a 10% upfront discount instead. Further, in June 2022, the builder sent an email to the homebuyer stating that they had breached the agreement, which resulted in the cancellation of the cashback scheme.

The homebuyer contended that, according to the agreement, the builder was supposed to hand over possession of the flat by June 2019. However, the builder failed to deliver possession on time. Therefore, being aggrieved, the homebuyer filed a complaint before the authority seeking delay interest from the builder.

Observation and Direction by Authority

The authority observed that, despite entering into a sale and construction agreement to hand over possession of the flat to the homebuyer by December 2019 (including the 6-month grace period) and receiving Rs. 70,32,728 from the homebuyer, the builder failed to honor the terms of the sale agreement. Therefore, the homebuyer is entitled to receive delay interest from the builder.

Therefore, the authority directed the builder to pay Rs. 21,82,586 to the homebuyer as interest for the delay in handing over possession of the flat. Additionally, the authority also directed the builder to complete the construction of the project and hand over possession to the homebuyer.

Case – Vijayanand Paulraj & Anr Versus Ozone Elegant Developers LLP

Citation - Complaint No.: 00930/2023