Karnataka RERA Directs Mantri Developers To Pay 48 Lakh Rupees To Homebuyer As Interest For Delay In Handing Over Possession

Karnataka RERA Directs Mantri Developers To Pay 48 Lakh Rupees To Homebuyer As Interest For Delay In Handing Over Possession

The Karnataka Real Estate Regulatory Authority (RERA) bench, chaired by GR Reddy (Member), has instructed Mantri Developers, the builder, to compensate a homebuyer with forty-eight lakh rupees as interest due to the delay in delivering possession of the flat. As per the agreement, the builder was obligated to hand over possession by July 2016.

As to the background of the case, the Homebuyer (Complainant) initially booked a flat in the builder's (Respondent) “Mantri Webcity” project in 2013 for a total sale amount of Rs. 74,52,281. Subsequently, this booking was cancelled, and in January 2014, a new flat was allotted to the homebuyer for a total sale consideration of Rs. 74,94,224.

According to both the agreement and construction agreement dated 23-12-2013, the builder committed to completing the project and handing over possession of the flat to the homebuyer by 31-07-2016. However, despite the homebuyer paying Rs. 68,50,000 to the builder, the project was not completed within the stipulated timeframe, and possession of the flat was not delivered.

As a result of this delay, the homebuyer filed a complaint with the authority, seeking compensation for the delay in possession.

Contentions of Builder

The builder argued that the possession date, as specified in the construction agreement, hinged on obtaining the occupancy certificate from the authority. They claimed that the delay was due to unforeseen circumstances beyond their control, such as labour strikes, shortages of crucial building materials like steel, sand, and cement, as well as pending legal or regulatory approvals.

Observation and Direction by RERA

The RERA noted a significant delay in the builder handing over possession of the flat. Considering that the homebuyer had already paid Rs. 68,50,000 towards the flat purchase, the RERA determined that the homebuyer is entitled to interest for the delay period under Section 18 of the RERA Act, 2016.

In its decision, the RERA referenced the Supreme Court case M/s Newtech Promoters and Builder Pvt. Ltd vs. State of Uttar Pradesh & Ors, which established that if a promoter fails to deliver possession of the apartment, plot, or building within the agreed timeframe specified in the agreement, the allottee's right to seek refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or court orders.

Consequently, the Karnataka RERA found the builder liable for breaching Section 18 of the RERA Act, 2016 by failing to deliver possession within the stipulated timeframe. Accordingly, the Authority directed the builder to pay Rs. 48,41,855/- to the homebuyer as interest for the delayed period.