Pranav B Prem

The Haryana Real Estate Regulatory Authority (HARERA), Gurugram, presided over by Arun Kumar (Chairperson), has directed Neo Developers Pvt. Ltd. to pay the monthly assured returns of ₹26,000 to the homebuyer and to execute the conveyance deed for the allotted unit. The Authority also clarified that a homebuyer receiving assured returns beyond the due date of possession is entitled either to the assured return or delayed possession charges—whichever is higher—while retaining the right to seek additional remedies including compensation.

Also Read: MahaRERA Holds Pune Builder Calyx Spaces Liable For Project Delay; Orders Refunds & Interest To 60 Homebuyers

The dispute arose after the homebuyer invested in a commercial unit in Neo Developers’ project “Neo Square,” located at Sector 109, Dwarka Expressway, Gurugram. The unit, measuring 400 sq. ft., was purchased for a basic sale consideration of ₹32.43 lakh, of which the buyer paid ₹31.53 lakh. On 1 October 2016, both a Builder-Buyer Agreement and a Memorandum of Understanding (MoU) were executed between the parties. Under Clause 4 of the MoU, the developer was obligated to pay an assured return of ₹26,000 per month from 3 September 2016 until commencement of the first lease. However, the builder stopped making assured return payments from July 2019 and failed to execute any lease deed till date. Additionally, possession—which was due by 1 October 2019—was never lawfully offered.

The homebuyer approached the authority seeking payment of assured returns, delayed possession charges, possession of the unit, execution of the conveyance deed, and cancellation of an alleged fabricated outstanding demand of ₹12.42 lakh raised by the builder. Neo Developers contested the complaint, claiming that the homebuyer was an investor, that assured return agreements fall under the BUDS Act and cannot be enforced, and that payments were stopped after the Banning of Unregulated Deposit Schemes Act, 2019 came into effect.

HARERA rejected these objections, holding that the MoU, executed as part of the builder-buyer transaction, forms an agreement for sale under Section 2(c) of the RERA Act and is fully enforceable. The Authority reiterated that assured return arrangements linked to builder-buyer transactions are protected under Section 2(4)(l)(iii) of the BUDS Act, and hence the builder’s reliance on the Act was misplaced. As Neo Developers failed to produce any evidence of having leased the unit, the Authority held that the liability to pay assured returns continues uninterrupted.

HARERA also examined whether a homebuyer can claim both assured return and delayed possession charges. It concluded that since the assured return of ₹26,000 per month was higher than the interest rate prescribed under Section 18(1) of the RERA Act (SBI MCLR + 2%), the buyer is entitled to the higher of the two, but not both simultaneously. Since the assured return was more beneficial, the Authority directed its continuation until the first lease of the unit begins.

Regarding possession, HARERA noted that Neo Developers obtained the occupation certificate only on 14 August 2024, and issued an offer of possession on 4 October 2024, far beyond the promised possession date. The Authority also held that the conveyance deed must now be executed in the homebuyer’s favour in terms of Section 17(1) of the RERA Act, upon payment of applicable stamp duty and registration charges.

The bench further restrained the builder from charging any amount not included in the buyer’s agreement or MoU. Neo Developers’ demand for ₹12.42 lakh was therefore disallowed to the extent it exceeded contractual terms. The builder’s claim that the buyer delayed payments was also rejected as the records showed substantial compliance by the buyer.

Ultimately, HARERA allowed the complaint and issued clear directions requiring Neo Developers to:

• pay all outstanding assured returns at ₹26,000 per month from 03.09.2016 until the commencement of the first lease;

• clear the overdue assured return within 90 days, failing which interest at 8.85% per annum will apply;

• execute the conveyance deed within three months; and

• refrain from charging any amount not envisaged under the BBA or MoU.

Also Read: Haryana RERA Orders Parsvnath Developers To Pay Assured Returns, Hand Over Possession, And Execute Conveyance Deed For Delayed Commercial Unit

The decision reinforces homebuyers’ rights in assured-return schemes and reiterates that developers remain bound by their contractual obligations despite the subsequent enactment of the BUDS Act.

Cause Title: Mahalingam Valleesan Versus M/S Neo Developers Pvt. Ltd.

Case No: Complaint No. 168 of 2025

Coram: Shri. Arun Kumar (Chairperson)