Case Name: Sharath Kumar Mahajan Versus Mantri Technology Constellations Private Limited & others
Case No.: Complaint No. CMP/220823/0009931
In a recent order from the Karnataka Real Estate Regulatory Authority (KREA), the builder of a property has been instructed to refund a homebuyer’s payment, along with interest, due to a failure in delivering the property as per the agreed timeline.
Here’s the backstory. The complainant, a homebuyer, had booked a flat in the real estate project named “Mantri Manyat Energia.” The builder and the homebuyer had signed an agreement on the 3rd of June, 2016, with the total sale consideration set at Rs. 92,96,596.
To finance the flat purchase, the homebuyer entered into a three-way agreement with the builder and India Bulls Housing Finance Limited. The buyer paid a total of Rs. 82,84,533 to the builder, of which Rs. 46,48,298 was provided by the housing finance company.
The builder had committed to handing over the property to the homebuyer by the end of 2018, with a grace period of 12 months. Unfortunately, despite the buyer having paid a significant amount, the builder did not deliver the property within the agreed time. Disappointed with the delay, the buyer lodged a complaint with Karnataka RERA, requesting a refund, along with interest.
In response to this, the authority found the builder guilty of delaying the delivery of the property. As such, they ordered the builder to refund the homebuyer under Section 18(1) of RERA, 2016.
Section 18 of The Real Estate (Regulation and Development) Act, 2016, explains that if a developer fails to complete or provide possession of a property according to the terms of the agreement or discontinues their business for any reason, they are liable to return the amount received with interest and compensation as prescribed by the Act.
The authority’s decision was also influenced by a Supreme Court judgment in the case of M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors. This judgment clarified that if a builder does not deliver the property within the agreed timeframe, the buyer’s right to seek a refund and claim interest due to delay is unconditional, regardless of any unforeseen events or court orders.
Consequently, Karnataka RERA ordered the builder to refund Rs. 1,47,84,583, along with a 9% interest, within 60 days.
This judgment serves as a reminder of the legal protections in place for homebuyers. It underlines the importance of timely delivery in real estate transactions and the consequences developers face for not adhering to their commitments.
