Karnataka RERA Orders ₹1.49 Crore Refund To Homebuyer After Ozone Realtors Fails To Deliver Possession On Time
Sangeetha Prathap
The Karnataka Real Estate Regulatory Authority has directed Ozone Realtors to refund ₹1.49 crore to a homebuyer after holding that the builder failed to hand over possession of the allotted flat within the contractually promised timeline. The bench comprising GR Reddy (Member) observed that despite receiving a substantial portion of the sale consideration and signing an Agreement of Sale, the builder neither completed the project nor delivered possession by the stipulated date of December 2021.
The dispute arose from a flat booked by the complainant in the respondent-developer’s project, Ozone Polestar, in 2018. An Agreement of Sale was executed on 16 February 2019 for a total price of ₹2.16 crore, and the buyer paid ₹4.51 lakh directly to the builder on multiple dates. In addition, the complainant obtained a home loan from HDFC Bank, which sanctioned ₹1.62 crore and disbursed ₹65.07 lakh to the builder following the execution of a Tripartite Agreement dated 8 February 2019 between the parties. Under this agreement, the developer was obligated to complete construction and deliver physical possession by December 2021.
The project remained incomplete even after the promised deadline, forcing the buyer to bear the burden of pre-EMI payments after the builder failed to honour its contractual obligation to service the pre-EMI as agreed. The complainant approached the Karnataka High Court (W.P. No. 10211) seeking impleadment of the company directors, and later filed W.P. No. 7549 of 2025 seeking directions regarding payment of pre-EMI. By an interim order dated 1 April 2025, the High Court directed the builder to pay the pre-EMI to HDFC Bank. However, even after multiple opportunities and judicial intervention, the builder neither completed the apartment nor refunded the amounts collected.
The Authority noted that the buyer had consistently attempted to communicate with the builder, but the latter failed to respond, leaving the complainant with no option but to withdraw from the project. It held that non-completion of the project even after receiving the bulk of the consideration amounts to a clear violation of the agreement and the statutory obligation under the Real Estate (Regulation and Development) Act, 2016.
In reaching its decision, the Authority relied on the Supreme Court ruling in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh & Ors. (LL 2021 SC 641), which held that where a builder fails to hand over the property within the stipulated period, the homebuyer’s right to claim interest for delay is absolute and unconditional. The Authority also referred to the judgment in Imperia Structures Ltd. v. Anil Patni (Civil Appeal Nos. 3581–3590 of 2020), which clarified that under Section 18 of RERA, a homebuyer who elects to withdraw from the project is entitled to an unconditional refund of the amount paid along with the prescribed interest.
Applying these principles, the Authority ordered Ozone Realtors to refund ₹1.49 crore to the complainant along with interest at MCLR + 2%, calculated from 30 November 2018 to 6 August 2025. The Authority held that once the builder had failed to honour the contractual delivery schedule and did not respond to repeated communications or judicial directions, the buyer was legally justified in terminating the arrangement and seeking a refund.
Cause Title: Gurajapu Venkata Satya Manikya Varaprasad vs. M/s Ozone Realtors Private Limited
Case No: Complaint No. CMP/00380/2025
Coram: Shri. GR Reddy (Member)
