In a significant relief for a Bengaluru homebuyer, the Karnataka Real Estate Regulatory Authority (K-RERA) has ordered a builder and associated parties to refund nearly ₹33 lakh along with interest after failing to deliver possession of a residential unit despite executing multiple agreements. The ruling reinforces the regulatory authority’s firm stance against prolonged project delays and contractual breaches by developers.
The order, passed comes amid growing concerns over delayed possession, double sales, and non-compliance by certain developers, issues that continue to plague homebuyers despite the presence of regulatory safeguards under the Real Estate (Regulation and Development) Act, 2016 (RERA).
The complainant, Sudhir, approached K-RERA after facing repeated delays and unfulfilled assurances from the respondents , Sri Vanishelters, LS Srinidhi, B Kenchappa Gowda, and G Vidyavathi , who failed to hand over possession of the promised apartment even after executing two separate agreements of sale.
Refund of ₹32.94 Lakh With Interest Ordered
In the order of judgment, K-RERA ordered the refund of ₹32,94,816 along with the rate of interest calculated at the State Bank of India Marginal Cost of Funds Based Lending Rate (MCLR) + 2%, from the date of February 14, 2020, until the date of June 12, 2025. The Authority further held that the rate of interest shall also accrue from the date of June 13, 2025, until the date of realization.
The amount is to be paid within 60 days, failing which the complainant would be entitled to initiate recovery proceedings as per provisions under the RERA Act. “The complainant, having paid a substantial portion of the sale consideration and having been denied possession within the agreed timeline, is entitled to refund along with interest,” the Authority observed in its order as per ET Realty.
Builder Failed to Justify Delay, Ignored Proceedings
K-RERA observed that the respondents, despite being granted sufficient opportunity, have not filed their memo of calculations or given any plausible explanation for the delay. The respondents were issued notices after the complaint was registered, but the same was not answered by appearing before the Authority.
A thorough verification of the documentary evidence submitted by the complainant reveals that the claim is genuine, the Authority stated, adding that the respondents’ failure to participate in the proceedings further weakened their case.
The Authority emphasised that accepting substantial payments and then failing to honour possession commitments constitutes a clear violation of statutory obligations under RERA.
Two Agreements, No Possession
From the details provided within the case, the complainant has initially paid an advance fee of ₹5.5 lakhs and has also obtained a housing loan of ₹28 lakhs from LIC Housing Finance, with the promise to pay the balance at the time of registration.
The delivery of possession was promised on or before February 19, 2023, including grace time. However, due to no progress on this front, later on, an alternate 3BHK flat (No. A-301) was offered by the respondent for ₹48 lakh, along with the assurance that all formalities, including transfer of loan, would be taken care of.
The complainant relied on these promises and signed a cancellation deed in respect of the original flat (No. B-306), and thereafter signed a new agreement on August 20, 2022, in respect of the alternate flat. The terms of this agreement were such that the developer was to complete the development and deliver possession within six months.
However, the allottees failed to complete the project, execute the sale deed, and deliver possession of the allotments within the stipulated time.
RERA Reinforces Buyer Protection
K-RERA observed that the respondents’ conduct demonstrated a clear breach of contractual and statutory obligations. Having accepted the amount and failed to keep the promise to hand over possession, the complainant is entitled to refund along with interest, the order stated.
The ruling underscores the Authority’s increasing willingness to hold errant developers accountable, particularly in cases involving repeated assurances, delayed possession, and non-participation in regulatory proceedings.
It has been observed that industry expert opinions suggest that these orders are a wake-up call for developers to remind them that failure on their part could result in strong financial punishment, not to mention the aspect of boosting consumer confidence in regulatory frameworks.
For the buyer, the judgment only reaffirms that record-keeping of payments, agreements, and communications, and the approach to the concerned RERA authorities in the event of delayed deliveries or breaches of agreement, remains of high significance. For the developer, the judgment is a warning that any kind of failure in delivering the products as promised, after considerable amounts have been received, would invite severe consequences.
As Karnataka RERA keeps grappling with cases of dispute resolution and ensuring compliance, such orders will help reinforce accountability and discipline in the commercial property sector in Karnataka.
Image source- rera.karnataka.gov.in
.png)