Haryana RERA Directs Builder To Refund The Homebuyer's Amount With Interest, Rejects Builder's Investor Argument

Background Fact

Homebuyers purchased a flat in the project of a builder named RISE located in Ramprastha City, Sector 37D, Gurugram.

The Builder-Buyer Agreement (BBA) was executed on July 28, 2012, for a total sale consideration of Rs. 76,85,168. Under Clause 15(a) of the BBA, the builder promised to provide possession of the flat by September 2015, with a grace period of 120 days for applying for and obtaining the occupancy certificate.

However, even after paying 95% of the total consideration, the builder failed to hand over possession of the flat on the agreed date or even after the expiration of the 120-day grace period. Aggrieved by the delay, homebuyers seek to withdraw from the project, therefore, homebuyers filed a complaint before Haryana RERA seeking a refund of their amount with interest.

Contention of the Builder

The builder contended that homebuyers hold the status of investors who merely invested in the present project with the intention to withdraw the amount later, potentially at an escalated and exaggerated rate. Furthermore, the builder contended that the date of possession was automatically extended due to delays caused by reasons beyond the builder's control (Force Majeure events).

RERA Order

The Authority holds that the complainants are homebuyers under the RERA 2016. Furthermore, the Authority observed that the concept of an investor is not defined anywhere in the RERA 2016. According to the definition provided under section 2 of the Act, there are only Promoters and Allottees, and there cannot be a party with the status of an investor.

The Authority relied on Section 2(d) of The Real Estate (Regulation and Development) Act, 2016, which defines "allottees" as follows:

Section 2(d) - Allottees:

(d) “Allottee,” in relation to a real estate project, means the person to whom a plot, apartment, or building, as the case may be, has been allotted, sold (whether as freehold or leasehold), or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer, or otherwise but does not include a person to whom such plot, apartment, or building, as the case may be, is given on rent.

The Authority also referred to the order of the Maharashtra Real Estate Appellate Tribunal in the case of M/s Srushti Sangam Developers Pvt. Ltd, Vs. Sorvapriya Leasing (P) Lts. And anr., wherein it was held that the concept of an investor is not defined or referred to in the Act.

The Authority further observed that the builder has failed to complete or provide possession of the unit in accordance with the terms of the agreement. Hence, the builder is liable to refund the amount to the homebuyers with interest as they wish to withdraw from the project.

Therefore, the Authority directed the builder to refund the entire amount received from the homebuyers (Rs. 74,39,605), along with interest at the rate of 10.85%.

Case: Uddipta Bimal Borah & another VS Ramprashtha Promoters and Developers Pvt. Ltd. & Another

Citation: Complaint No. 4061 of 2023

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