Pranav B Prem

In a recent decision reinforcing the rights of real estate allottees, the Haryana Real Estate Regulatory Authority, Gurugram, has held KNS Infracon Pvt. Ltd. and Tashee Land Developers Pvt. Ltd., promoters of the Capital Gateway Project in Gurugram, accountable for an inordinate delay of more than nine years in handing over possession of a residential unit. The Authority directed the builders to pay delay interest at 11.10% per annum from the due date of possession until the actual handover of the flat, and to offer possession without imposing any additional or unauthorized charges.

The matter was adjudicated by Ashok Sangwan, Member, Haryana RERA, who found the respondents in clear violation of Section 11(4)(a) of the Real Estate (Regulation and Development) Act, 2016. This provision casts a binding duty upon promoters to fulfill all obligations under the sale agreement and those arising from the Act until the conveyance of the property.

Also Read: Oriental Insurance Held Accountable by Delhi State Commission for Denial of Legitimate Medical Claims

The complainants, Hardeep Kumar and Safia Gupta, had entered into a builder-buyer agreement dated 25 June 2013 for the purchase of a flat bearing unit number B-202 in Tower B of the “Capital Gateway” project, situated at Sector 111, Gurugram. The flat carried a basic sale price of Rs. 53,73,000, and over time, the complainants paid a total amount of Rs. 62,79,109 to the builder. As per Clause 2.1 of the agreement, the developer was obligated to hand over possession within 36 months from the date of sanction of building plans—granted on 7 June 2012—along with a grace period of 180 days, setting the latest due date of possession as 7 December 2015.

Despite receiving over 80% of the flat’s cost, the developers failed to hand over possession even by March 2025, prompting the complainants to approach the Authority seeking both possession and delay compensation.

In response, the builders cited numerous justifications for the delay, including the death of the Chairman of the Environmental Impact Assessment (EIA) Committee, delays in obtaining environmental clearance, general economic slowdown, increase in construction costs, shortage of labour, defaults by other buyers, and the outbreak of COVID-19. They also claimed the complainants were “investors” and not genuine consumers under the Act.

The Authority, however, rejected these contentions. On the allegation that the complainants were merely investors, the Authority emphasized that the definition of “allottee” under Section 2(d) of the RERA Act squarely includes the complainants. Referring to precedents from the Maharashtra RERA Appellate Tribunal, it clarified that the concept of “investor” is not recognized under the Act and hence has no bearing on the buyer's right to possession or compensation.

On the issue of force majeure and external delays, the Authority found that the explanations offered by the developers were insufficient to justify a delay of over nine years. It observed that factors such as administrative delays, financial challenges, or general industry downturns do not qualify as valid grounds for breaching possession timelines. Refusing to allow the promoter to benefit from its own default, the Authority categorically held that the delay amounted to non-compliance with the statutory obligations under RERA.

In determining the date from which delay interest is to be calculated, the Authority took into account the sanction of building plans on 7 June 2012 and the contractual commitment to deliver possession within 36 months, allowing the grace period of 180 days as per precedent. Consequently, the final due date was fixed as 7 December 2015.

As per Section 18(1) of the RERA Act, if a promoter fails to deliver possession as per the terms of the agreement, the allottee is entitled to interest for every month of delay at the rate prescribed by rules. Rule 15 of the Haryana RERA Rules fixes the applicable interest at the SBI MCLR + 2%, which stood at 11.10% on the date of the order. The Authority directed the promoters to pay this interest from the due date until two months after the offer of possession or the actual date of handover, whichever is earlier.

The order further required the developers to clear the arrears of such interest accrued till the date of the judgment within 90 days, and to continue paying monthly delay interest before the 10th of each subsequent month until possession is handed over. Additionally, the Authority directed the builders to provide the complainants with an updated statement of account reflecting adjusted dues after applying the delay compensation, and prohibited them from charging any amounts beyond the original buyer’s agreement.

Also Read: Mysore Consumer Forum Holds OnePlus and Its Service Centre Liable For Failing to Rectify Persistent Phone Issues

The complainants were also directed to clear any remaining dues—after adjustment of the delay interest—within 60 days from receipt of the updated statement. Notably, the same interest rate of 11.10% would apply to both parties for any default in respective payments.

Concluding the matter, the Authority also imposed Rs. 20,000 as cost on the promoters for non-compliance and warned that failure to comply within the stipulated period would attract further legal consequences under the Act.

Appearance

For the Complainants: Soumya Kumar [Advocate]

For the Respondents: Rishabh Jain [Advocate]

Cause Title: Hardeep Kumar & Anr V. KNS Infracon Pvt Ltd & anr

Case No: Complaint No. 1176 of 2023

Coram: Ashok Sangwan [Member] 

[Read/Download order]