Punjab RERA- Delay In Possession Will Be Counted From Date Of Agreement To Sell Made Before Project's RERA Registration

Background Fact

The complainants (Homebuyers) purchased a flat in the builder's project named ATS Golf Meadows Lifestyle for a total price of Rs. 5,176,000. Both parties entered into an agreement for sale on June 18, 2014. As per Clause 14 of the agreement, the builder was obligated to deliver possession of the flat to the homebuyers within 36 months, with an additional grace period of 6 months from the date of the construction of the tower.

Furthermore, the homebuyers paid Rs. 4,676,000 to the builder, and in doing so, they also obtained a loan of Rs. 3,852,098 from HDFC Bank (Respondent no. 2). Despite making the payment on time, the builder failed to provide possession of the flat within the promised timeline.

Consequently, the homebuyers filed a complaint before Punjab RERA seeking compensation for the delayed possession.

Contention of Builder

The builder contended that no cause of action had arisen as the time for completion of the project had been declared by the builder before the authority until 31.08.2026 at the time of project registration. Furthermore, the builder contended that since the agreement of sale was signed in 2014, prior to the implementation of RERA 2016, the case is outside the purview of the authority.

RERA Verdict

The Authority rejected the builder's contention regarding the project's completion date being 31.8.2026. Instead, it held that the agreement between the parties was signed on 18.06.2014. According to the terms, the builder had committed to handing over possession of the flat within 36 months, with an additional six-month grace period from the start of tower construction. Consequently, the completion date outlined in the agreement dated 18.06.2014 clearly indicated that possession should have been transferred by December 2017, not as late as August 2026.

The Authority referred to the Bombay High Court Judgment in the case of Neel Kamal Realtors Suburban Pvt. Ltd. and another Vs. Union of India and others, wherein it was held that under the provisions of Section 18, the delay in handing over possession would be counted from the date mentioned in the agreement for sale entered into by the builder and the homebuyer prior to its registration under RERA.

Further, The Authority held that RERA is applicable to the projects which were ongoing and subsequently got registered under RERA. Therefore, the complaint of Homebuyers is maintainable.

Consequently, RERA directed the builder to pay Rs. 1,50,000 Compensation due to the long delay in project completion, resulting in suffering for the homebuyers and legal expenses incurred during litigation.

In conclusion, Punjab RERA directed the builder to pay compensation for the delay in providing possession, rejecting its contention that the date of completion of the project is August 2026.

Case: Saurabh Sehgal & another vs M/s ATS Estate Private Limited and Mr. Aditya Jit Singh Pahwa

Citation: Complaint No. RERA/AdC No.0278/2021

Counsel for Complainant: Mr. Vijay Goyal

Counsel for Respondent: Mr. J.P. Rana

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