A Decade-Long Struggle for Justice
Imagine paying Rs 1.07 crore for a flat and waiting 10 years for its possession. This was the plight of a homebuyer who booked a flat in 2013 for Rs 1.16 crore. He initially paid Rs 12 lakh as a booking amount and later, in 2014, made a substantial payment of Rs 95 lakh upon signing the sale agreement. However, when the homebuyer visited the site, he was shocked to find that even the basic construction work had not begun.
This ordeal began with the couple’s investment in a Gurgaon apartment inspired by a glossy sales brochure. Little did they know, it would lead to a decade of frustration and legal battles.
Multiple Flat Transfers, No Delivery
After realizing the flat was not under construction, the homebuyer approached the builder for a refund. However, the builder persuaded him to transfer his investment to another project at a higher price of Rs 1.55 crore. Shockingly, this flat also faced delays, and the homebuyer was once again offered a new flat in yet another project. By 2021, the homebuyer had been promised three different flats, with none delivered.
The final agreement for the newly allotted flat was signed on January 21, 2021, with a delivery deadline of July 27, 2022. Unfortunately, the builder failed to obtain the required occupation certificate, further delaying possession.
Filing a Complaint with Haryana RERA
In 2024, after a 10-year delay and mounting frustration, the homebuyer filed a complaint with Haryana RERA (Real Estate Regulatory Authority), seeking the cancellation of his booking and a refund of Rs 1.07 crore along with interest. Haryana RERA took cognizance of the case and investigated the builder’s claims.
Builder’s Defense and Haryana RERA’s Findings
The builder, M/s Ansal Housing & Construction Limited (now New Look Builders and Developers Private Limited), cited “force majeure”—circumstances beyond their control, including the COVID-19 pandemic—as the reason for delays. However, Haryana RERA rejected this defense, noting that the pandemic began in 2020, well before the final agreement in 2021. RERA also pointed out that the builder’s history of shifting the homebuyer’s payments across multiple projects demonstrated a lack of commitment to timely delivery.
Legal Provisions Supporting the Homebuyer
The Haryana RERA tribunal reviewed several sections of the Real Estate Regulatory Authority (RERA) Act, 2016, including sections 2(za), 11(4)(a), 18(1), and 19(7), along with relevant court judgments.
- Section 2(za): Defines “force majeure” conditions and their applicability.
- Rule 15: Details the prescribed rate of interest for refunds under RERA which is defined as the State Bank of India’s highest marginal cost of lending rate (MCLR) + 2%.
- Section 18(1): Allows homebuyers to seek a refund with interest if the builder fails to deliver on time.
- Section 11(4)(a): Mandates developers to abide by obligations outlined in the agreement.
- Precedent: Delhi High Court’s judgment in M/s Halliburton Offshore Services Inc. vs. Vedanta Ltd. was referenced.
Haryana RERA concluded that the builder had failed to fulfill their obligations and directed them to refund Rs 1.07 crore along with 11.1% interest from the date of payment.
Compensation Breakdown
The refund amount, including interest, was calculated approximately as follows:
- Principal amount: Rs 1.07 crore
- Interest: 11.1% per annum for 10 years, amounting to Rs 1.19 crore
- Total: Rs 2.26 crore
The exact amount may vary depending on the final payment date.
Expert Opinions on the Case
Pushkraj S. Deshpande, Associate Partner at ALMT Legal, commented, “The builder’s defense of force majeure was invalid as the agreement was executed after the pandemic began. The builder also failed to obtain an occupation certificate, violating RERA guidelines.”
Avikshit Moral, Partner at S&R Associates, added, “The builder’s repeated shifting of units and failure to deliver even the final unit within the agreed timeline clearly violated Section 18(1) of RERA.”
The key legal takeaways from the RERA judgment are as follows:
- Interest on Payments: The judgment emphasized that interest should be paid from the date of each part payment, rather than from the final possession date (July 21, 2022). This ensures that buyers are compensated for delays based on when payments were made.
- Pandemic Not Considered Force Majeure: Since the agreement was executed in January 2021, after the pandemic began, the outbreak of COVID-19 was not accepted as a force majeure event to justify any delays in possession.
- MCLR Rate Determination: The interest rate for compensation was based on the MCLR rate as of the order date (December 11, 2024) at 9.8%, not the rate on the default date (July 21, 2022), which was 7.8%.
- Strict Adherence to Contracts: Real estate companies must strictly adhere to the timelines and obligations outlined in contracts with buyers. Any delays or failures to meet these obligations can result in legal claims for compensation or specific performance, holding developers accountable for timely delivery.
Conclusion
The Haryana RERA ruling is a significant victory for homebuyers, reaffirming their rights under RERA. It underscores the accountability of builders and ensures that developers cannot exploit buyers with endless delays. This landmark decision serves as a reminder for homebuyers to stand firm and demand justice in cases of unfair practices.