Builder's Inaction Costs ₹70.33 Lakh: Karnataka RERA Orders Ozone Infra Developers To Refund Homebuyers For Delayed Possession
Pranav B Prem
The Karnataka Real Estate Regulatory Authority (K-RERA), Fifth Additional Bench, presided by Member G.R. Reddy, has directed M/s Ozone Infra Developers Pvt. Ltd. to refund an amount of ₹70,33,424 to the homebuyers for failing to hand over possession of an apartment within the stipulated time. The refund amount includes interest calculated from 1 May 2017 to 26 June 2025 and further interest until the actual date of payment.
The homebuyers, Ms. Divya Balasubramaniam and Mr. V. Saiweweswaran, had entered into a sale agreement with the builder on 5 September 2018 for purchasing an apartment in the developer's project named "Ozone Urbana Prime." As per the agreement and the Memo of Calculation submitted by the complainants, the promised completion date was 1 June 2021. The buyers had paid a total of ₹51,39,093, primarily funded through a loan from a financial institution.
Despite the passage of over three years since the promised delivery date, the builder neither completed the project nor communicated its status. The development license for the project had also expired. With no progress on construction or any refund issued, the complainants approached the Authority under Section 18 of the Real Estate (Regulation and Development) Act, 2016, seeking a refund with interest.
After registration of the complaint, both parties were summoned. During the hearings held on 23 April 2025 and 3 June 2025, the complainants submitted all relevant documents, including the agreement for sale, proof of payments, bank statements, and a tripartite agreement. Though the respondent's advocate appeared and requested time to file objections by 6 June 2025, the builder failed to file any objections, even after being granted sufficient time. Consequently, the Authority proceeded ex-parte and took on record the Memo of Calculation submitted by the complainants.
The Authority observed that the builder had accepted a substantial amount as sale consideration but failed to deliver possession as promised. It noted that the agreement of sale is a binding legal instrument and must be enforced in its entirety. In the present case, the Authority found that the builder’s inaction amounted to a breach of the agreement.
Citing the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh & Ors [LL 2021 SC 641], the Authority reiterated that under Section 18(1) of the RERA Act, if a promoter fails to hand over possession within the agreed period, the allottee holds an unqualified right to seek a refund along with interest.
The Authority also referred to the judgment in M/s Imperia Structures Ltd. v. Anil Patni & Anr [Civil Appeal No.3581-3590 of 2020], where the apex court held that when the promoter is unable to deliver possession by the specified date, the allottee is entitled to withdraw from the project and claim a refund with interest. It was emphasized that such rights are available without prejudice to any other remedies under the Act.
In conclusion, the Authority allowed the complaint and directed the builder to refund ₹70,33,424 to the homebuyers within 60 days from the date of the order. This amount was based on the complainants’ Memo of Calculation, which included the principal amount of ₹51,28,677 and interest of ₹19,04,747 up to 26 June 2025. It was further directed that interest from 27 June 2025 till the date of final payment must also be paid in a similar manner. If the builder fails to comply, the complainants are at liberty to initiate recovery proceedings as per law.
Appearance
For Respondents/Promoters: Deepak Bhaskar & Associates, Advocates
Cause Title: Divya Balasubrmaniam & Anr V. M/s. Ozone Infra Developers Pvt Ltd.
Case No: Complaint No: CMP/1362/2024
Coram: Shri. G.R. Reddy [Member]
