Punjab RERA Directs Omaxe New Chandigarh Developers To Refund Homebuyer's Money For Delayed Possession

Authority noted that builder had agreed to hand over possession by June 2019 under the terms of the agreement but failed to provide possession by the due date.

Background Facts

Homebuyer booked a flat in the builder's project named The Lake, Omaxe in August 2014. The basic sale consideration of the flat was Rs. 47.06 Lakhs. Builder issued the allotment letter in May 2015 under which possession was to be given by June 2019.

Homebuyer continued to make payments and had paid about 52.24 lakhs by April 2023. A housing loan of 45 lakhs was also taken from SBI in 2016 on the expectation that the project would be completed within the agreed timeline.

In August 2023, the builder issued an Offer of Possession along with a revised cost sheet. This revised statement increased both the area and the total cost of the flat. The new demand was around 7 lakhs more than what was stated in the allotment letter. Homebuyer contended that there was no agreement to increase the area or the cost.

By this stage the delay had crossed four years. The interest on the homebuyer's loan kept increasing and created financial pressure.

In these circumstances, the homebuyer stated that continuing in the project was not possible and filed a complaint before the Authority seeking a refund of the amount paid.

Contentions of Builder

Builder contended that homebuyer had no basis to seek a refund especially since an Offer of Possession was already issued. Builder stated that homebuyer was required to take possession within two months after paying the balance amount as provided under Section 19(10) of the RERA Act. According to the builder, once possession is offered the homebuyer must complete the formalities and cannot demand a refund on that ground.

Observation and Direction by Authority

Authority referred to Section 18(1) of the RERA, 2016 and observed that the provision makes it clear that an allottee gains an indefeasible right to seek relief when a promoter fails to complete the project or is unable to hand over possession in line with the terms of the agreement for sale.

Authority held that the builder could not rely on Section 19(10) to deny the refund. That provision requires an allottee to take possession within two months after the Occupancy Certificate is issued. In this case, the Occupancy Certificate was obtained only in October 2023, while the complaint seeking refund was filed earlier on 21 August 2023. Therefore, Section 19(10) did not apply in a way that could defeat the homebuyer's right.

Authority concluded that since the builder failed to deliver possession as per the agreement, the homebuyer was well within the right to withdraw and claim refund.

Therefore, Authority directed builder to refund all amounts deposited by the homebuyer along with interest at the interest rate (highest MCLR + 2%) payable from the date of each deposit until refund. Authority also clarified that SBI being the lender would have the first charge over the refund amount.

Case: Prof. (Dr.) Anuradha Sharma v. Omaxe New Chandigarh Developers Pvt. Ltd. & Anr.

Citation: RERA/GC No. 0294 of 2023