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RERA Awards Rs. 65 Lakhs Compensation to Homebuyer for 9 Years Delay in Flat Possession

 


CA Ramesh Agrawal

In a recent decision, the Haryana Real Estate Regulatory Authority (HRERA) has directed a builder to compensate a homebuyer with ₹65 lakh for an inordinate delay of over nine years in handing over a flat in Gurugram.

Key Highlights:

  • Background of the Case: The homebuyer had booked a flat in 2013, with the developer promising possession within a stipulated timeframe i.e., 7th December 2015. However, the possession was delayed by more than nine years.
  • Developer's Justifications: The builder attributed the delay to unforeseen circumstances, including the COVID-19 pandemic, the demise of the chairman of environmental impact assessment (EIA) committee, and inadequate water supply.
  • H-RERA's Verdict: After reviewing the case, HRERA rejected the developer's justifications, deeming them insufficient to warrant such a prolonged delay. The authority emphasized that the reasons cited did not qualify as force majeure events that could absolve the builder of responsibility.
  • Compensation Awarded: Recognizing the undue hardship faced by the homebuyer, HRERA ordered the builder to pay Rs. 65 Lakhs as compensation for the delay.

Interest Compensation Calculation for Delay in Possession

Particulars

Details

Amount Paid by Homebuyer

Rs. 62,79,109

Date Possession was Due

7th December 2015

Assumed Date of Actual Possession

19th May 2025 (Date of HRERA Judgment)

Total Delay Duration

9 Years and 5 Months

Interest Rate (Annual)

11.1% Per Annum

Interest Calculation Formula

Rs. 62,79,109 × 11.1% × (9 + 5/12) Years

Final Interest Amount

Rs. 65,63,237.79

 

Implications of the Ruling:

  • Precedent for Accountability: This decision underscores HRERA's commitment to holding developers accountable for project delays, reinforcing the rights of homebuyers to timely possession.
  • Clarification on Force Majeure: The ruling provides clarity on what constitutes a force majeure event, indicating that internal company issues or infrastructural challenges like water supply do not fall under this category.
  • Impact on Auto-Extension Clauses: The case brings attention to the legality of auto-extension clauses in sale agreements, prompting a revaluation of such provisions in future contracts.

This case is part of a series of actions by HRERA to address delays in the real estate sector. In recent times, the authority has taken stringent measures against developers who fail to adhere to project timelines, ensuring that homebuyers' interests are protected. Such proactive steps by HRERA aims for greater transparency and accountability in the real estate market.

The Rs. 65 Lakhs compensation awarded by HRERA serves as a significant reminder to builder about the importance of honouring commitments made to homebuyers. It also reinforces the regulatory body's role in safeguarding the rights of consumers in the real estate sector.

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