Disclaimer: This has been reported after the availability of the order of the Authority and not on media reports so as to give an accurate report to our readers.
Rajasthan Real Estate Regulatory Authority (RERA): While deciding a complaint under Section 31, Real Estate (Regulation and Development) Act, 2016 (RERA Act), the Single Bench of R.S. Kulhari, Adjudicating Officer, held that an allottee whose project was declared lapsed after the promoter failed to deliver possession within the agreed timeline was entitled to compensation in addition to the refund with interest already granted by the RERA
It was observed that,
“There is a loss of interest of approximate 4 per cent every month which deserves to be awarded in the form of compensation to cover the apparent financial loss caused to the complainant who have arranged the funds from the financial institution.”.
Background
The complainant booked flat in the respondent’s housing project and executed an agreement for sale on 26 February 2020, under which possession of the flat was to be delivered by 1 March 2022. The complainant paid a total amount including amounts disbursed through a housing loan, the project subsequently categorised as a “Lapsed Project”, where Rajasthan RERA awarded, refund the entire amount along with interest at 10.80 per cent per annum from the respective dates of deposit.
The respondent admitted the agreement and receipt of the consideration but attributed the delay to shortage of construction material, changes in government policy, delayed payments by other allottees and the Covid-19 Pandemic and further contended that no separate compensation was payable as refund with interest had already been awarded.
Issue
Whether the complainant allottee is entitled to compensation under Section 71, RERA Act, refund with interest, where the promoter failed to deliver possession within agreed timeline and the project was subsequently declared lapsed.
Analysis
The Authority observed that there was no dispute regarding the sale agreement or the respondent’s obligation to hand over possession by 1 March 2022 and the project remained under the “lapsed” category as the respondent failed to justify the prolonged delay. The Authority noted that factors such as market conditions, government policies and procurement of raw material were risks to be borne by the promoter and could not be shifted to the allottee. The Authority observed that while the Covid-19 Pandemic might have delayed the project for a few months, delay of 4-5 years could not be justified. The Authority found the respondent to have violated the provisions of Section 18, RERA Act, entitling the complainant to delayed interest as well as compensation.
The Authority observed that for assessment of compensation, various aspects including financial loss, physical and mental agony, cost of litigation, etc. have to be considered as provided under Section 72, RERA Act. Relying upon Experion Developers (P) Ltd. v. Sushma Ashok Shiroor, (2022) 15 SCC 286, the Authority observed that doctrine of restitution would apply as the present matter is related to refund of amount. The Authority observed that although the Rajasthan RERA had awarded interest at 10.80 per cent per annum, but the complainant was paying interest at 14 per cent per annum, compoundable on monthly basis, thereby suffering an additional financial burden, which deserved to be compensated. The Authority noted that the complainant had suffered mental and physical agony, besides losing the opportunity to own a house, particularly in view of the increase in property prices.
Decision
Allowing the complaint, the Authority directed the respondent to:
1. pay compensation by way of additional interest at 4 per cent per annum on the deposited amount from the respective dates of deposit until refund, in addition to the interest already awarded by the Rajasthan RERA,
2. pay ₹80,000 towards compensation for loss of opportunity and physical and mental agony and ₹20,000 towards litigation expenses, and
3. comply with the order within 45 days, failing which the entire amount would carry additional interest at 2 per cent per annum until payment.
[Sanjeet Singh v. AKG Affordable Housing (P) Ltd., RAJ-RERA-C-O-2024-7330, decided on 30-6-2026]
Advocates who appeared in this case:
For the Complainant: Advocate Keshav Khandelwal
For the Respondent: Advocate Kriti Chhabra
