Rajasthan REAT Directs Air Force Naval Housing Board To Pay Interest To Homebuyers

AFNHB is a welfare organization that provides residential houses to retired Air Force and Naval personnel and their widows on a "No profit No loss" basis under a self-financed housing scheme.

Background Facts

Homebuyers booked their flats in the Air Force Naval Housing Board (AFNHB) project named Jal Vayu Tower Phase II, situated in Jaipur, Rajasthan.

In 2011, AFNHB launched the project, and after receiving sufficient funds from homebuyers, it issued allotment letters in February 2012, with the tentative completion date set for the end of 2014.

However, on 4th June 2014, AFNHB announced a revision of the scheme with new costs and specifications, offering a refund option for those who chose to withdraw. The homebuyers opted to continue with the scheme, and new allotment letters were issued on 28th November 2014. Despite the revised plans and timelines, the project faced significant delays.

Due to the delays, the homebuyers filed complaints before authority. In response, the Authority, in three separate orders, directed the AFNHB to provide 3% interest from December 2017 until the possession was handed over. The Authority also directed the homebuyers who had not taken possession of their flats to do so.

Some homebuyers took possession of their units in 2021, while others did not take possession and instead filed appeals before the tribunal seeking full refund with interest.

Observation and Direction by Tribunal

Tribunal noted that in 2014 AFNHB announced that initial scheme has been discontinued and allowed homebuyers to withdraw from the project. However, Homebuyers chose to continue in the project under new specifications, costs, and conditions.

Further, new allotment letter was issued on 28th November 2014, which was accepted by homebuyers and they continued to pay installments until February 2020 often through loans from financial institutions.

Tribunal also noted that AFNHB constructed flats according to the new terms, issuing paper and physical possession in February and May 2022, respectively. The homebuyers sought withdrawal from the project only after receiving the possession notice.

Tribunal held that despite pointing out defects and personal issues, the homebuyers are not entitled to a refund. Therefore, Tribunal upheld the authority order for the homebuyers to take possession of their flats.

However, the Tribunal overturned the authority's order that directed only 3% interest to homebuyers for the delay. The Tribunal directed AFNHB to pay interest as per the RERA Rules of 2017, which is SBI MCLR + 2%.

Cases - Air Force Naval Housing Board Versus Arpita Jain Garg and others

Citation - Appeal No.139/2024 in Complaint No.RAJ-RERA-C-2022-5465 and others

Date of order – 25.10.2024

Click Here To Read/Download The Order