Sangeetha Prathap

The Karnataka Real Estate Regulatory Authority (K-RERA), comprising Member G.R. Reddy, has directed Casa Grande to pay delay interest to a homebuyer for a one year and three-month delay in handing over possession of a flat in its project Casa Grande Lorenza. The Authority held that the buyer was entitled to compensation under Section 18 of the Real Estate (Regulation and Development) Act, 2016, as the builder failed to deliver possession within the contractually agreed timeline.

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The dispute arose after the homebuyer booked a flat in the project and executed a sale agreement on 9 May 2019, under which Casa Grande was required to complete construction and deliver possession by 15 October 2020. The buyer had already paid ₹57,33,752 toward the purchase. However, the builder failed to meet the deadline. The Occupancy Certificate (OC) was issued only on 28 January 2022, more than 15 months after the committed date. Casa Grande thereafter informed the homebuyer to complete the balance payment and take possession.

Instead of accepting possession immediately, the homebuyer raised objections regarding construction quality, design deviations, and compliance with the sanctioned plan. Discussions between the parties could not resolve these concerns. Meanwhile, the homebuyer filed complaints before the Bruhat Bengaluru Mahanagara Palike (BBMP), alleging irregularities, which led BBMP to cancel the project’s OC. Casa Grande, aggrieved by the cancellation, approached the Karnataka High Court in W.P. No. 14135/2023.

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During the pendency of the matter, the homebuyer invoked Section 18 of the RERA Act, seeking delay-period interest for the builder’s failure to hand over the flat by the committed date. Casa Grande contended that the buyer’s complaints triggered the cancellation of the OC, and since the OC issue was sub judice before the High Court, the claim for delay interest was premature. The builder also argued that the homebuyer’s refusal to take possession despite availability of the OC disentitled him from seeking further compensation.

The Authority examined the Karnataka High Court’s order dated 23 August 2025, wherein the Court categorically held that Casa Grande had not committed any plan deviations. The Court set aside BBMP’s cancellation and restored the OC, thereby reaffirming the validity of the OC issued on 28 January 2022. In light of this, the Authority concluded that the homebuyer was entitled to delay interest only for the period up to the date of the OC, as this was the point at which the builder’s obligation under the agreement ceased.

Significantly, the Authority observed that even if the homebuyer had concerns regarding construction defects, he could have taken possession and subsequently exercised his rights under Section 14(3) of the Act, which provides a five-year defect liability period. Further delay in taking possession could not be attributed to the builder once the OC was validly issued.

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Accordingly, K-RERA directed Casa Grande to pay interest at SBI MCLR + 2% on the amounts paid by the homebuyer from 15 October 2020 to 28 January 2022. The Authority also instructed the builder to hand over possession and execute the registered sale deed in favour of the homebuyer without further delay.

Cause Title: Mr. Shashidar Irappa Bagewadi Vs M/s. Casa Grande Garden City Builders Pvt. Ltd.

Case No: Complaint No: CMP/221104/10175

Coram: Shri. G.R. Reddy (Member)