Pranav B Prem

The Karnataka Real Estate Regulatory Authority (KRERA), presided over by Shri G.R. Reddy (Member), directed M/s Ozone Urbana Infra Developers Pvt. Ltd. to refund ₹31,46,485 to the complainants, Abhishek Reddy Gujjala and Darapureddi, for failing to complete and deliver possession of a plot in their “Southend” project as agreed. The Authority held that the builder’s failure to hand over possession within the stipulated time constituted a violation of Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act), and entitled the homebuyer to a refund along with interest.

Background

The complainants had booked a plot (Plot No. 76) in the “Southend” project developed by the respondent builder. An agreement for sale was executed on 06.08.2021 for a total sale consideration of ₹1,20,01,008. As per the agreement, the builder was to complete the project and deliver possession of the plot by July 2024. By the time of execution, the complainants had already paid ₹24,00,202 to the developer.

Also Read: NCLT Kolkata Rules, Disbursal Against Time Value Of Money Constitutes Financial Debt

However, despite receiving this substantial amount, the builder failed to complete the project or offer possession. The complainants, after waiting for considerable time, decided to cancel the booking and requested a refund. The respondent agreed to refund the amount by 15.08.2024, but failed to make any payment. Consequently, the complainants filed a formal complaint before the Authority under Section 31 of the RERA Act, 2016, seeking refund of the paid amount along with interest.

Response of the Builder

The respondent builder, while appearing through counsel, denied all allegations and contested the veracity of an email cited by the complainants regarding cancellation of the booking. The builder argued that the complaint was not maintainable as the content of the said email could not be determined summarily. It was also submitted that the matter required a detailed trial for determining the factual matrix, and hence, should not be adjudicated under the summary proceedings of the Authority.

Authority’s Observations and Legal Reasoning

The Authority carefully examined the agreement of sale, payment receipts, and memo of calculation submitted by the complainants. It noted that even after receiving a substantial portion of the sale price, the builder had failed to complete the project or hand over possession of the plot by the stipulated time—July 2024. The Authority observed that the respondent also failed to refund the amount as promised, despite being reminded.

The bench referred to the landmark ruling of the Hon’ble Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh & Ors [(LL 2021 SC 641)], wherein it was held that: “Under Section 18(1) of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment, plot, or building as per the agreement for sale, the allottee has an unqualified right to seek refund of the amount paid, along with interest.”

The Authority also cited Imperia Structures Ltd. v. Anil Patni & Anr [Civil Appeal No. 3581-3590 of 2020] in which the Supreme Court had reiterated that an allottee has an absolute right to demand a refund with interest if possession is not delivered as agreed. The bench emphasized that this right is unqualified, regardless of any internal or external reasons that may have affected the project completion.

Based on these precedents, the Authority concluded that: “The respondents have not completed the project and have failed to hand over possession as agreed… The complainants are entitled to withdraw from the project and seek refund along with interest as per Section 18(1) of the Act.”

Final Order

After assessing the documents and calculations presented by the complainants, the Authority accepted the claim of ₹31,46,485, which included both the principal and accrued interest (calculated as per MCLR + 2% from 08.05.2021 to 01.12.2024). The respondent was granted 60 days from the date of the order to pay the full amount. The Authority further directed that interest from 02.12.2024 until the date of actual payment must also be paid using the same formula.

Also Read: NCLT Kolkata Rules, Absence Of Creditor's Name In Balance Sheet Does Not Negate Acknowledgment Of Debt

Additionally, the Authority instructed the complainants to cooperate with the respondent for cancellation of the sale agreement dated 06.08.2021 upon full receipt of the refund. If the respondent fails to comply with the directions, the complainants have been granted liberty to initiate recovery proceedings under applicable law.

Appearance

For the Complainant: In Person

For the Respondent: Mr.Deepak Bhaskar (Advocate)

Cause Title: Abhishek Reddy Gujjala & Anr V. M/S Ozone Urbana Infra Developers Pvt. Ltd.

Case No: CMP/00754/2024

Coram: Shri. G R Reddy [Member K-RERA]

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