In a landmark ruling, the Haryana Real Estate Regulatory Authority (HRERA) has directed Ansal Housing & Construction (now known as New Look Builders and Developers Pvt Ltd) to refund Rs1.07 crore along with 11.1% interest to a home-buyer who faced over a decade-long delay in receiving possession of a promised flat. The total compensation amounts to Rs2.26 crore, marking a significant victory for home-buyers dealing with errant developers.
The home-buyer, who booked a flat in 2013, was initially allotted unit 3016 in Sovereign Floors, Esencia, a residential project by the developer in Gurugram. The flat, worth Rs1.16 crore, with a booking amount of Rs12 lakh and a sale agreement, was registered in 2014 when Rs95 lakh was subsequently paid. Four years later, when the home-buyer visited the construction site, they were shocked to find that not even basic construction work was started by the builder.
At this point in 2017, when the home-buyer sought a refund from the builder, they were tactfully advised by the latter to instead re-invest the money by purchasing another flat in a different project by them; that too at a higher price of Rs1.55 crore. This was a unit in Sector-67A, which was allotted to the home-buyer upon execution of an agreement on 9 January 2018.
However, once again the builder failed to deliver possession within time and again, the home-buyer sought a refund from them. Here, again, the builder managed to convince the complainant to re-invest in another project instead of seeking a refund. A memorandum of understanding (MoU) was executed to state that there had been an inordinate delay in handing over possession of the previously allotted unit to the complainants and, thus, another unit was being allotted to them.
On 21 January 2021, the sale agreement was registered for this newly-allotted unit and the possession date was stated as 27 July 2022. The builder unfortunately failed to obtain an occupation certificate from the concerned authorities and thus again the flat could not be handed over to the home-buyer within the promised deadline. This was the third time since 2013 when the home-buyer, despite paying Rs1.07 crore in total, was left with nothing but promises of a flat which will someday be entirely constructed.
This time, when the builder failed to deliver the flat on the promised date of 21 July 2022 the home-buyer finally filed a complaint against the builder with HARERA, seeking a cancellation of his booking and a full refund of Rs1.07 crore with interest as compensation.
In its order, HRERA rightly pointed out that the builder “has been holding the amount paid by the complainant from 2013 and kept on changing the units of the complainants from one project to the other project on account of non-completion of the projects. The amount paid by the complainants has also been shifted and adjusted from one project to another. Even after a delay of more than 10 years, no unit has been delivered by the respondent to the complainants till date.”
The builder in its defence, said that they had every intention of delivering the allotted flat but ‘force majeure’ conditions prevented them from doing so. However, HRERA rejected this argument, pointing out that the buyer’s final agreement was signed in 2021, well after the initial lockdown period. The Authority also noted that the builder had consistently failed to complete projects, shifting the buyer’s funds from one stalled project to another.
“The respondent is claiming benefit of lockdown, which came into effect on 23 March 2020 much prior to the execution of the agreement. Therefore, the Authority is of the view that the outbreak of a pandemic does not fall under the force majeure circumstances in the present matter and thus the benefit of Covid-19 cannot be granted to the respondent,” HRERA stated in the judgement.
In its ruling, HRERA found the builder guilty of mismanagement and directed that they refund Rs1.07 crore to the complainant along with an interest of 11.1%pa on each payment from the date of receipt until actual payment. If the date of payment is assumed to be 2014, then the builder will have to refund approximately Rs2.26 crore to the complainant.
HRERA’s ruling sends a strong message to developers who exploit home-buyers by endlessly delaying possession. The case also highlights how RERA can be an effective legal tool for buyers facing long-standing project delays. For home-buyers dealing with similar situations, this ruling serves as a reminder to take legal action rather than waiting indefinitely.
Under RERA provisions, affected buyers can file a complaint with their state’s RERA authority for delays or non-compliance, seek a full refund with interest if possession is not delivered on time and escalate the case to the Real Estate Appellate Tribunal if the builder fails to comply with the RERA order.
