Karnataka RERA Holds Mantri Developers Liable For Delay, Orders 2.56 Crores Refund To Homebuyer

Karnataka Real Estate Regulatory Authority (Authority) bench, comprising GR Reddy (Member), held Mantri Developers liable for delay in handing over possession to the homebuyer and ordered Rs. 2.56 crore refund. Additionally, it directed the builder to foreclose the bank loan taken by the homebuyer in his name to fund the purchase from PNB Housing Finance Limited (PNBHFL). Background Facts Homebuyer purchased a flat in the builder's project named Mantri Webcity 2A, located in Bengaluru, Karnataka. The flat was purchased under the Pre- EMI scheme under which homebuyer paid 20 – 25% of sale consideration totalling Rs.15,56,872 to builder and 75% - 80% of sale consideration totalling Rs. 65,65,776 was availed from the bank loan. As per the agreement dated 24th April 2014, the builder was supposed to handover the possession of the flat by 31 March 2017 to homebuyer. However, homebuyer contended even after the delay of more than 5 years they have not received the possession of their flat. Being aggrieved by delay, Homebuyer decided to withdraw from the project which was acknowledged by builder through the email dated 23 April, 2017. However, Homebuyer contended that builder has failed to provide them with refund and interest as per the terms of Pre – EMI Scheme. Additionally, builder failed to close loan as agreed under letter of undertaking. Therefore, the homebuyer filed a complaint before the authority, seeking a refund of the sale consideration, a directive to the builder to foreclose the homebuyer's loan with PNBHFL and a refund of the Pre-EMI paid. Contentions of Builder The builder argued that the complaint should be dismissed as it is not legally or factually maintainable. Builder contended that the delay was due to various reasons including legal and licensing issues, heavy rainfall and flooding at the project site, demonetization, GST, restrictions on working hours, a ban on sand mining, a shortage of skilled labour and construction materials and the impact of COVID-19 and the lockdown imposed by the government. Observation and Direction by Authority Authority observed that the builder had accepted the homebuyer decision to withdraw from the project. Further, based on the submitted documents, authority found that possession was delayed and held that the homebuyer is entitled to a full refund of the amount paid as per Section 18 of the RERA, 2016. Therefore, Authority directed builder to pay Rs. 2,56,47,520 as refund to homebuyer within 60 days from the date of order. Authority noted that the builder failed to reimburse the homebuyer's Pre-EMI payments as agreed. As a result, the homebuyer continues to pay Pre-EMIs due to the builder's delay in handing over possession. Authority also noted that if the homebuyer had not approached the Karnataka High Court, they would have kept paying Pre-EMIs indefinitely. Authority held that the builder failed to discharge the homebuyer from making Pre-EMI payments by closing the loan account as agreed under the Letter of Undertaking, leading to financial distress. Further, homebuyer is neither the beneficiary of the property nor the loan amount as both are retained by the builder. Therefore, Authority directed the builder to foreclose the homebuyer's loan. Case – Mr. Anant Ramachandran Versus M/s. Mantri Developers Pvt Ltd. Citation – CMP/712/2024 Date – 27th March 2025Click Here To Read/Download The Order

Karnataka RERA Holds Mantri Developers Liable For Delay, Orders 2.56 Crores Refund To Homebuyer

Aryan Raj

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Aryan Raj

Karnataka RERA Holds Mantri Developers Liable For Delay, Orders 2.56 Crores Refund To Homebuyer

Aryan Raj

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Aryan Raj

This is a premium content
Available exclusively to
Our subscribers