The Karnataka Real Estate Regulatory Authority (Karnataka RERA), presided over by GR Reddy (Member), has ordered GVG Infrastructure Pvt. Ltd., the builder, to refund the payment made by a homebuyer for a flat purchase, along with interest. This directive follows the builder’s failure to deliver possession within the agreed-upon 12-month timeframe specified in the sales agreement.
Background Details
The homebuyer reserved a ground-floor flat with two car parking spaces in the builder’s project named Malberry Mist. On August 25, 2018, both parties signed a construction agreement and a sales agreement. The homebuyer paid an initial deposit of Rs. 23,21,526 out of the total sales price of Rs. 84,39,760.
According to the agreement, the builder was obligated to finish the project and deliver possession of the flat to the homebuyer within 12 months. However, as of the present date, the builder has failed to complete the project and hand over the flat to the homebuyer.
Homebuyer’s Perspective
The homebuyer expressed concern over the lack of visible progress in the project’s completion, attributing the delays solely to reasons known by the builder. Consequently, feeling aggrieved by the prolonged delay and absence of substantial progress, the homebuyer lodged a complaint with the authority seeking a refund of the amount paid, along with interest.
Observations and Ruling by the Authority
Upon review, the authority noted that despite receiving an advance payment of Rs. 23,21,526 from the homebuyer, the builder failed to adhere to the terms outlined in the sale agreement executed on August 25, 2018. Therefore, the authority directed that the homebuyer is entitled to a refund of the paid amount, along with applicable interest.
The Authority cited the Supreme Court’s ruling in the case of M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641]. The Court held that if a builder fails to deliver possession of the apartment, plot, or building within the agreed-upon timeframe specified in the agreement, the homebuyer retains an unconditional and absolute right under the RERA, 2016 to demand a refund or claim interest for the delay. This right persists irrespective of unforeseen circumstances or court/tribunal stay orders.
Hence, the Authority instructed the Builder to reimburse the Homebuyers a total of Rs. 34,77,086/- along with interest within a period of 60 days.
Posted and reproduced in Public Interest by
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