Karnataka RERA Directs Casa Grande To Pay Interest For Delayed Possession

The dispute involved the cancellation of the project's Occupancy Certificate by the Bengaluru municipal corporation after the homebuyer complained about plan deviations, which led the builder to approach the Karnataka High Court.

Background Fact

Homebuyer (Complainant) purchased a flat in the builder's (Respondent) project “Casa Grande Lorenza” and signed a sale agreement on 9 May 2019. Under the agreement, the builder had to finish the project and hand over the apartment by 15 October 2020. The homebuyer paid Rs. 57,33,752.

Builder did not complete the project by the agreed date. The Occupancy Certificate was obtained much later on 28 January 2022. After receiving the certificate, the builder informed the homebuyer and asked him to pay the remaining amount and take possession.

Homebuyer did not immediately take possession. He raised several issues relating to construction, design and compliance with the sanctioned plan. Both sides discussed these issues and explored different ways to resolve them, but no solution was agreed upon.

Since the balance payment was not made and possession was not taken, the builder asked the homebuyer to either complete the formalities or proceed with cancellation of the agreement. The builder also asked for the homebuyer's bank details to refund the money.

Instead of taking possession or cancelling the agreement, the homebuyer filed complaints before Bruhat Bengaluru Mahanagara Palike (“BBMP”) and other authorities alleging plan violations and non compliance. Based on these complaints BBMP cancelled the Occupancy Certificate issued to the builder.

Aggrieved by the two year delay in possession, the homebuyer then approached the Authority seeking delay period interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016.

Contentions of Builder

Builder contended that the homebuyer made false allegations about the construction quality and complained to multiple authorities including BBMP. According to the builder, these complaints led BBMP to cancel the project's Occupancy Certificate.

Builder stated that they were aggrieved by this cancellation and therefore filed a writ petition (W.P. No. 14135/2023) before the High Court challenging BBMP's decision. Lastly, Builder argued that because the Occupancy Certificate issue is sub judice, the complaint before the Authority should not proceed on issues related to the certificate.

Observation and Direction by Authority

Authority noted that the High Court of Karnataka in its order dated 23 August 2025 in W.P. No. 14135/2023, held that there were no deviations or violations in the construction. The High Court set aside BBMP's cancellation order and restored the Occupancy Certificate. Because of this the Occupancy Certificate dated 28 January 2022 issued to the builder was treated as valid.

Authority held that the homebuyer was entitled to delayed interest only up to the date of the Occupancy Certificate (up to 28 January 2022). Any claim for interest beyond this date was not accepted.

Authority observed that once the builder offered possession, the homebuyer could have taken possession and still kept his defect liability rights open for five years under Section 14(3) of the RERA, Act.

Therefore, Authority directed the builder to pay delay-period interest at SBI MCLR + 2 percent on the amounts paid by the homebuyer from 15 October 2020 until 28 January 2022. Lastly, Authority also directed builder to hand over possession and execute the registered sale deed in favour of the homebuyer.

Case – Mr. Shashidar Irappa Bagewadi Vs M/s. Casa Grande Garden City Builders Pvt. Ltd.

Citation – Complaint No: CMP/221104/10175