Punjab RERA Orders Omaxe New Chandigarh Developers to Refund Homebuyer’s Money

The Punjab Real Estate Regulatory Authority (RERA) has issued a directive to Omaxe New Chandigarh Developers to refund the amount paid by a homebuyer for a flat in their project. The Authority, comprising member Arunvir Vashista, noted that the builder had agreed to hand over possession by June 2019 but failed to do so.

Homebuyer booked a flat in the builder's project, The Lake, Omaxe, in August 2014. The basic sale consideration for the flat was Rs. 47.06 Lakhs. The builder issued the allotment letter in May 2015, with possession promised by June 2019. The homebuyer continued to make payments and had paid about Rs. 52.24 Lakhs by April 2023. Additionally, a housing loan of Rs. 45 Lakhs was taken from SBI in 2016, based on the expectation that the project would be completed within the agreed timeline.

In August 2023, the builder issued an Offer of Possession along with a revised cost sheet, which increased both the area and the total cost of the flat. The new demand was around Rs. 7 Lakhs more than what was stated in the allotment letter. The homebuyer contended that there was no agreement to increase the area or the cost. By this stage, the delay had crossed four years, and the interest on the homebuyer's loan had increased, creating financial pressure.

In these circumstances, the homebuyer stated that continuing in the project was not possible and filed a complaint before the Authority seeking a refund of the amount paid.

The builder contended that the homebuyer had no basis to seek a refund, especially since an Offer of Possession was already issued. The builder argued that the homebuyer was required to take possession within two months after paying the balance amount as provided under Section 19(10) of the RERA Act. According to the builder, once possession is offered, the homebuyer must complete the formalities and cannot demand a refund on that ground.

However, the Authority referred to Section 18(1) of the RERA Act, 2016, which makes it clear that an allottee gains an indefeasible right to seek relief when a promoter fails to complete the project or is unable to hand over possession in line with the terms of the agreement for sale. The Authority held that the builder could not rely on Section 19(10) to deny the refund. This provision requires an allottee to take possession within two months after the Occupancy Certificate is issued. In this case, the Occupancy Certificate was obtained only in October 2023, while the complaint seeking a refund was filed earlier on 21 August 2023. Therefore, Section 19(10) did not apply in a way that could defeat the homebuyer's right.

The Authority concluded that since the builder failed to deliver possession as per the agreement, the homebuyer was well within the right to withdraw and claim a refund. Therefore, the Authority directed the builder to refund all amounts deposited by the homebuyer along with interest at the highest MCLR + 2% from the date of each deposit until the refund. The Authority also clarified that SBI, being the lender, would have the first charge over the refund amount.

Case: Prof. (Dr.) Anuradha Sharma v. Omaxe New Chandigarh Developers Pvt. Ltd. & Anr. Citation: RERA/GC No. 0294 of 2023