Order Date: 18th September 2024
Order Name: Mr. Chirag Arora & Anr vs. Vatika Limited
Case No.: Complaint No. 5012 of 2023
The Haryana Real Estate Regulatory Authority has upheld the decision to cancel a flat allotment made by Vatika Limited. The builder did not register the project under RERA, and the Authority, led by Member Ashok Sangwan, has instructed its Planning Division to take action against the builder.
### Background Information:
On May 29, 2015, a homebuyer purchased a flat with an area of 1550 sq. ft, including covered parking, in a project called “Xpressions by Vatika” located in Sector 88 B, Gurugram. The flat’s total price was Rs. 1,02,25,500, and the buyer paid Rs. 39,30,437 to the builder. According to the agreement, the builder was supposed to hand over the flat by May 25, 2020. However, the project was not completed on time, and the builder terminated the allotment on September 27, 2023.
The homebuyer argued that even five years after RERA 2016 was implemented, the builder had not registered the project as mandated by Section 3 of RERA. This led the homebuyer to file a complaint seeking a reversal of the cancellation, interest for delayed possession, and an inquiry into the violation of Section 3 of RERA.
### Authority’s Observations and Directions:
The Authority referred to Clause 8 of the buyer’s agreement, which allows the builder to cancel the unit and forfeit the earnest money if the buyer fails to make timely payments. The Authority noted that the builder had provided several opportunities for the buyer to make the payments before canceling the allotment on September 27, 2023. Under Sections 19(6) and 19(7) of RERA 2016, the homebuyer is required to make payments on time, thus validating the builder’s cancellation.
The Authority also considered a precedent set by the National Consumer Disputes Redressal Commission in the case of Jayant Singhal and Anr. vs. M3M India Limited, where it was determined that forfeiting 10% of the basic sale price is reasonable. Consequently, the Authority directed Vatika Limited to refund the amount paid by the homebuyer after deducting 10% of the basic sale consideration, along with an 11.10% interest.
Furthermore, the Authority addressed the issue of the project’s non-registration under RERA, instructing the Planning Division to take appropriate action against the builder.
### Takeaway:
This order highlights the importance of timely payments by homebuyers and the builder’s responsibility to register projects under RERA. It underscores the legal repercussions for builders who fail to comply with RERA regulations and assures homebuyers that they have recourse in such situations.
