Rajasthan REAT Directs Indian Railway Welfare Organisation To Pay Interest On Refund Amount To Homebuyer

Background Facts

On 10.11.14, the homebuyer (Appellant) booked a flat in the Respondent Group Housing Project named “Rail Vihar Jaipur Phase-III,” located at Sector 37, Jagatpura, Jaipur.

Homebuyer mentioned that the tentative cost of the flat was Rs. 43.48,000/-; however, that was further increased to Rs. 47.00,000/-. Out of the total cost, the homebuyer paid Rs. 45,09,000/- to the respondent.

The homebuyer further mentioned that the possession date of the flat was December 2018, however, the respondent obtained an extension of the project up to 30.06.2021.

Further, after getting frustrated by the delay, on 10.11.2021, the homebuyer withdraws from the project and asks for the refund of money, which was not provided by the respondent. Therefore, the homebuyer filed a complaint before the authority seeking a refund with interest.

On 19.04.2023, Authority through its order directed respondent to the refund of Rs. 45,09,000/- without the interest as there was no agreement to sale executed between respondent and homebuyer. Further, being aggrieved by the authority order, the homebuyer appealed before the Tribunal, seeking interest on the refund amount.

Observation and Direction by Tribunal

The Tribunal referred the Clause 20.3 of General Rules of Indian Railway Welfare Organisation, which states:

“ If a homebuyer cancels their booking after receiving the booking letter but before receiving the possession of the flat, then the respondent will deduct the full booking amount, 5% of instalments (whether paid or not), and any interest due on delayed payments and The remaining balance will be refunded without interest.”

The Tribunal held that the Homebuyer booked the flat, accepted the terms and conditions, participated in the entire process, and paid the instalments using a loan. The respondent built the flat based on the Homebuyer's acceptance. Therefore, the homebuyer cannot claim a refund of the entire deposited amount at this late stage, even after the enactment of RERA.

The Tribunal further held that it is not the duty of the homebuyer to request respondent for Agreement to Sale. The Respondent is required to execute the Agreement to Sale in compliance with Section 13 of RERA, 2016.

Therefore, Tribunal concluded that Authority's order refusing to grant interest to the homebuyer on the ground that no Agreement to Sale was executed needs to be quashed and set aside. As a result, the Tribunal directed respondent to pay interest to Homebuyer at 9.30% P.a.

Case – Renu Singhal Versus Indian Railway Welfare Organisation

Citation - Appeal Number: 70/2023

Date of Order – 24.09.24

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