Homebuyer Cannot Be Compelled To Take Possession Of Unallotted Flat; Full Refund With Interest Directed: Rajasthan REAT
Pranav B Prem
The Rajasthan Real Estate Appellate Tribunal (REAT) has held that a promoter cannot compel a homebuyer to take possession of a flat that was never allotted to him and cannot deduct administrative charges from the refund when no registered Agreement for Sale exists. Allowing the appeal filed by a retired homebuyer, the Tribunal directed the developer to refund the entire amount deposited along with interest within 45 days.
Also Read: Punjab RERA Orders ATS To Refund ₹57 Lakh To Homebuyers For Failure To Deliver Possession
A Bench comprising Justice Madan Gopal Vyas, Chairperson, and Yudhisthir Sharma, Judicial Member, was hearing an appeal under Section 44 of the Real Estate (Regulation and Development) Act, 2016 (RERA) challenging an order of the Rajasthan Real Estate Regulatory Authority which had offered the allottee possession or, in the alternative, a refund after deducting 10% as administrative charges.
The appellant, Satish Sharma, a retired resident of Gurugram, had booked a unit in a project developed by VVA Developers Private Limited in June 2013. He was provisionally allotted Unit No. A2-0905 for a total consideration of ₹28.45 lakh and paid ₹6.47 lakh—more than 10% of the sale consideration. Despite receiving this amount, the promoter never executed a registered Agreement for Sale. With the project remaining incomplete for years, the appellant approached the Regulatory Authority in 2019 seeking refund of the amount paid.
The Regulatory Authority, by its order dated April 27, 2023, disposed of the complaint by directing the promoter to offer possession after adjusting interest, or alternatively to refund the amount after deducting 10% administrative charges if the allottee did not wish to take possession. Aggrieved, the homebuyer preferred an appeal before the REAT.
Before the Tribunal, the appellant contended that the promoter had repeatedly issued demand notices for units that were never allotted to him and had eventually offered possession of an entirely different flat. It was argued that the originally allotted unit remained incomplete and that the appellant could not be compelled to accept possession after an inordinate delay of nearly a decade. The appellant also submitted that collection of more than 10% of the consideration without executing a registered Agreement for Sale was in clear violation of Sections 13(1) and 13(2) of the RERA Act.
The promoter opposed the appeal, submitting that possession of a unit in a completed block had been offered and that the appellant had failed to pay the balance consideration. It was further argued that the project delay had been condoned by grant of extension and that deduction of administrative charges was justified if the allottee chose not to take possession.
After examining the record, the Tribunal noted that multiple demand notices had been issued for unallotted units and that even the possession offer made in 2023 pertained to a flat which was never booked by the appellant. The Bench categorically held that “An allottee cannot be forced to take possession of the unallotted unit.” It further observed that neither the demand notices nor the offer of possession for an unallotted flat could be treated as valid.
On the issue of non-execution of the Agreement for Sale, the Tribunal emphasised that under Section 13 of the RERA Act, it is the statutory duty of the promoter to execute the Agreement for Sale after receiving 10% of the consideration. It held that failure of the promoter to execute the agreement cannot be used to defeat the rights of the allottee. The Tribunal rejected the promoter’s attempt to shift the burden onto the homebuyer, observing that non-execution of the agreement could not justify deduction of administrative charges in the absence of any contractual stipulation.
The Tribunal also relied on the Supreme Court’s ruling in M/s Newtech Promoters and Developers v. State of Uttar Pradesh, reiterating that where possession is not delivered within the stipulated or deemed time, the allottee has an “unqualified right to seek refund of the amount with interest.” It found that the delay in the project was apparent and that partial completion of certain blocks did not dilute the appellant’s statutory right to refund.
In conclusion, the Rajasthan REAT allowed the appeal and modified the impugned order to the extent that the promoter was directed to refund the entire deposited amount of ₹6,47,212 to the appellant, along with applicable interest from February 1, 2021 (excluding the notified moratorium period), without deducting any administrative charges. The refund was directed to be made within 45 days, with no order as to costs.
Appearance
For Appellant: Advocate Kritika Singh
For Respondent: Advocate Hemant Kothari
Cause Title: Satish Sharma vs VVA Developers Pvt. Ltd.
Case No: Appeal No. 76/2023 (In Complaint No. RAJ-RERA-C-2019-3105)
Coram: Justice Madan Gopal Vyas, Chairperson, Yudhisthir Sharma, Judicial Member
