Telangana RERA Orders Homebuyer To Pay Remaining Amount With Interest To Builder For Failing To Make Payment on Time

Background Facts

In August 2021, Homebuyer (Complainant) booked a flat (A-112) in the GMR Springfield Project located in Turkapally Village, under GHMC, Alwal Circle, Medchal-Malkajgiri district. The homebuyer paid 20% of the total cost, amounting to Rs. 9,13,500, as per the demand of the Builder (Respondent) and promised to pay the remaining 80% in the form of a loan.

The homebuyer, being a Central Government Official, sought to avail a loan in the form of House Building Allowance (HBA) from the concerned department where he is employed. However, delays ensued in obtaining the necessary documents for loans from the builder, despite repeated requests and reminders from the homebuyer.

Following a meeting with the Managing Director (MD) of the builder in December 2022, where assurances were given regarding the prompt provision of documents, the Homebuyer finally received the required documents on 20.02.2023. However, the management directed the Homebuyer to make the due payment by 28.03.2023, giving a relatively short timeframe, failing which the base price would be increased.

Despite efforts by the Homebuyer to negotiate an extended payment timeline, including proposing an interim payment in May 2023, and arranging personal and hand loans to meet the payment deadline, the builder insisted on immediate payment with a revised base rate and threatened to cancel the allotment of the flat.

The homebuyer filed a complaint before TSRERA alleging harassment by the builder and demanding action in accordance with applicable rules and regulations to rectify the situation and secure the flat at the originally agreed-upon rate.

Contention of Parties

Builder contended that the Homebuyer made partial payments totaling Rs. 9,13,500, instead of the agreed-upon amount of Rs. 12,00,000, despite reminders and requests from the builder. The builder highlights that the Homebuyer's payments were significantly delayed, with the Homebuyer only entering into an Agreement of Sale in January 2022 after repeated reminders.

The builder further contended that the Homebuyer failed to adhere to the payment schedule linked to various stages of construction, despite numerous reminders. Despite offering loan facilities through nationalized banks initially, the Homebuyer delayed payments and started requesting additional documents. Furthermore, the builder stated that the Homebuyer failed to provide evidence of the promised HBA loan of Rs. 2500,000 and instead made requests for documents beyond the builder's purview. The builder alleges that the Homebuyer's actions were aimed at evading payments due, leading to delays in the project. Based on these contentions, the builder seeks dismissal of the complaint.

The Homebuyer contended that the delay in payment was due to the builder's failure to provide documents on time. Despite this, the builder refused to acknowledge fault and demanded an increased payment or cancellation of the flat allotment. Furthermore, the Homebuyer highlighted the urgency of resolving the matter promptly, as the budget sanctioned for HBA cannot be kept idle for an extended period, risking surrender to the headquarters office.

TSRERA Order

The Authority directed the homebuyer to pay the remaining amount with an interest rate of 10.65% to the builder for failing to adhere to the payment schedule within 60 days from the date on which the documents were received by the Complainant for procuring the HBA loan. Consequently, the Authority rejected the homebuyer's argument that he missed the payment schedule due to the builder's failure to provide him with the required documents needed for the loan.

The Authority relied on Explanation III of Clause 1.2, which reads as follows:

“Vendors shall periodically intimate in writing to the purchaser, the amount payable as stated above and the purchaser shall make the payment demanded by the vendors within the time and in the manner specified above”.

The Authority further held that the homebuyer has an obligation to adhere to the payment schedule as agreed upon in the Agreement of Sale, as per Section 19(6) of RERA, 2016. Once a certain timeline for payment for the flat is agreed upon by the parties, both the builder and the homebuyer are bound by it.

In conclusion, TSRERA ordered the homebuyer to pay the remaining amount with interest to the builder for failing to adhere to the payment schedule.

Case: Sri Umesh Choudhary V/S M/s Alpine Infratech

Citation: COMPLAINT NO.519 OF 2023

Click Here To Read/Download Order