Karnataka RERA Orders Ozone Infra Developers to Refund Rs. 70.33 Lakhs for Delayed Possession
The Karnataka Real Estate Regulatory Authority (RERA) has directed Ozone Infra Developers to refund Rs. 70.33 Lakhs to a homebuyer for failing to deliver the apartment as per the agreed timeline.
Real EstateReraRefundDelayed PossessionHomebuyerReal EstateJul 16, 2025
Background Fact
Homebuyers (Complainants) entered into a sale agreement with the builder on 5 September 2018 to purchase an apartment in the builder's (Respondent) project named “Ozone Urbana Prime”. As per the agreement and the memo of calculation, the expected date of completion of the project was 1 June 2021.
Homebuyers paid a total of Rs. 51.39 Lakhs to the builder. This amount was mostly arranged through a financial institution by availing a loan. However, the builder failed to stick to the terms of the agreement. The construction of the project has stalled, and the license for development has expired. Despite this, the builder has neither completed the project nor communicated anything about its status.
More than three years have passed since the agreed date of completion. The builder has not refunded the amount paid by the homebuyers either. Because of this delay and lack of clarity, the homebuyers filed a complaint before the authority seeking a refund of the entire amount paid, along with interest.
Contentions of Builder
Builder was granted time to file its objections until 6 June 2025. However, despite having sufficient time, the builder failed to file any objections to the complaint or to the Memo of Calculation submitted by the homebuyers. As a result, the builder was placed ex-parte, and the Memo of Calculation filed by the homebuyers was taken up for consideration.
Observation and Direction by Authority
Authority noted that the builder failed to hand over possession of the flat on time as promised in the sale agreement and did not provide any proof about the current status of the project. Authority observed that the builder had accepted a substantial amount from the homebuyers towards the sale consideration. Since the builder did not fulfill the promise of handing over possession, the homebuyers are entitled to a refund with interest under Section 18 of the RERA Act.
Authority emphasized that the agreement of sale is a binding legal document and must be clear and enforceable. In this case, the builder did not comply with its terms, which amounts to a breach of contract. Authority referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641] where it was held that if the builder fails to handover the possession of the flat within the time stipulated under the terms of the agreement, then the homebuyer right under the RERA, 2016 to seek interest for delay is unconditional and absolute.
Authority also referred to the Supreme Court decision in the case of M/s Imperia Structures Limited v. Anil Patni & Anr, where it was held that under Section 18 of the RERA Act, if a builder fails to complete or give possession of an apartment by the specified date, the builder must return the amount received if the homebuyer wishes to withdraw from the project.
Therefore, the Authority allowed the homebuyers to withdraw from the project and directed the builder to refund Rs. 70,33,424 to the homebuyers within 60 days, as per the calculation submitted by them.
Case – Divya Balasubrmaniam & Anr Versus M/s. Ozone Infra Developers Pvt Ltd.
Citation – Complaint No: CMP/1362/2024
Date – 1 July, 2025
Frequently Asked Questions
What is the RERA Act?
The RERA Act, or the Real Estate (Regulation and Development) Act, is a law enacted in 2016 to regulate the real estate sector, protect homebuyers, and ensure transparency and accountability in real estate transactions.
Why did the homebuyers file a complaint?
The homebuyers filed a complaint because the builder, Ozone Infra Developers, failed to deliver the apartment as per the agreed timeline and did not communicate the status of the project or refund the amount paid.
What was the amount to be refunded?
The Authority directed Ozone Infra Developers to refund Rs. 70.33 Lakhs to the homebuyers, including interest, for the delayed possession of the apartment.
What legal precedents did the Authority refer to?
The Authority referred to the Supreme Court decisions in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors and M/s Imperia Structures Limited v. Anil Patni & Anr, which support the homebuyer's right to seek interest for delay and the builder's obligation to return funds if possession is not delivered on time.
What is the significance of the agreement of sale?
The agreement of sale is a binding legal document that must be clear and enforceable. In this case, the builder's failure to comply with the terms of the agreement amounted to a breach of contract.
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