Haryana RERA Orders Vatika To Pay Delay Interest And Execute Conveyance Deed In Favour Of Homebuyer
Pranav B Prem
The Haryana Real Estate Regulatory Authority, Gurugram (“Authority”), chaired by Arun Kumar, has directed Vatika Ltd. to pay delay possession interest to the homebuyer and execute the conveyance deed in respect of the allotted unit. The Authority rejected the builder’s defence that the assured return clause became unenforceable after the enactment of the Banning of Unregulated Deposit Schemes Act, 2019.
Background Facts
The complainants purchased a unit (No. 149, First Floor, 1105 sq. ft.) in Vatika’s project “High Street at INXT,” located in Sector 83, Gurugram. The basic sale consideration was ₹1.41 crore, while the complainants paid a total of ₹1.53 crore. An allotment letter dated 26 August 2017 contained a clause under which the developer was liable to pay assured monthly returns of ₹81.66 per sq. ft. until the completion of the project or until the unit was leased.
The complainants alleged that despite collecting the entire consideration, Vatika failed to honour its contractual obligations under the allotment terms and did not hand over possession of the unit by the due date of 26 August 2020. They sought payment of assured returns, delayed possession charges, and execution of the conveyance deed.
Builder’s Contentions
Vatika Ltd. argued that the assured return agreement became void due to the Banning of Unregulated Deposit Schemes Act, 2019, which prohibited such commitments. Relying on Section 2(j) of the Contract Act, it was contended that “a contract which ceases to be enforceable by law becomes void.” The builder further argued that the complainants had purchased the commercial unit for investment purposes and, therefore, could not be treated as “allottees” entitled to remedies under the Real Estate (Regulation and Development) Act, 2016 (RERA).
Observations of the Authority
The Authority noted that while Vatika had initially made some assured return payments, it later stopped by citing the 2019 Act. Rejecting this argument, the Authority held that assured returns agreed as part of an allotment letter or builder-buyer agreement remain enforceable in law. It reasoned that such returns are treated as advances against the allotment of immovable property, which are protected under law, and therefore the BUDS Act does not bar them.
On the question of whether a homebuyer can claim both assured returns and delayed possession interest, the Authority clarified that once the due date of possession has expired, the homebuyer’s interests are better protected through Section 18 of RERA. It observed: “The purpose of assured return even after completion of the building is served on payment of delayed possession charges after due date of possession as the same is to safeguard the interest of the allottee… they are to be paid either the assured return or delayed possession charges whichever is higher.” In the present case, the assured return amounted to approximately ₹90,234 per month, whereas the delayed possession interest worked out to about ₹1,41,665 per month. Hence, the latter was considered more beneficial for the complainants.
Directions
The Authority directed Vatika Ltd. to:
Pay delay possession interest at the rate of 11.10% per annum from the due date of possession (26 August 2020) until two months after the occupation certificate is granted or until actual handover, whichever is earlier.
Execute the conveyance deed of the allotted unit within three months of this order, subject to the complainants paying the requisite stamp duty.
The complaint was accordingly disposed of with directions.
Appearance
Complainants: Mr. Harshit Goyal (Advocate)
Respondent: Mr. Dhananjai Jain (Advocate)
Cause Title: Rajesh Kumar Batra & Anr V. Vatika Ltd.
Case No: Complaint No. 2410 of 2023
Coram: Shri. Arun Kumar (Member)
