RERA Impact: Homebuyer Awarded Rs 65 Lakh Compensation for 9-Year Delay in Gurgaon Flat Possession
A homebuyer in Gurgaon, Haryana, has been awarded Rs 65 lakh in compensation by Haryana RERA for a 9-year delay in the possession of a flat. The ruling reinforces RERA's commitment to protecting homebuyers' rights and ensuring builders adhere to agreed timelines.
ReraGurgaon Real EstateHomebuyer CompensationHaryana ReraReal Estate DisputesReal EstateMay 23, 2025
Another interesting fact about this case is that this homebuyer, instead of cancelling the home booking and taking back his money, decided to fight under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA). Section 18 is used when a homebuyer does not withdraw from the housing project but rather asks for compensation for delayed possession.
Haryana RERA, after its investigation of the case’s facts, used Rule 15 to determine how much compensation the builder should pay to this homebuyer for this 9-year delay in possession. Rule 15 of RERA rules states that the interest compensation should be State Bank of India (SBI) highest MCLR rate plus 2%. Hence, Haryana RERA issued a judgment on March 19, 2025, ordering the builder to pay 11.01% interest to the homebuyer from 2015 till the date he gives possession of the house.
### How Did This Fight Start?
According to the judgment of Haryana RERA dated March 19, 2025, here are the details:
- **June 6, 2012**: Builder received sanctions for the building plans from the local government.
- **June 17, 2013**: The builder issued an allotment letter to the homebuyer for buying a unit of a house in Gurgaon, Haryana, measuring 1,990 square feet at a rate of Rs 2,700 per square foot.
- **June 25, 2013**: The builder-buyer agreement was executed, and the basic sale price excluding TDS was fixed at Rs 53.73 lakh. The due date of possession was December 7, 2015. The homebuyer, in good faith, paid Rs 62.79 lakh, which includes the basic sale price and TDS.
- **March 13, 2023**: Homebuyer filed a case against the builder with Haryana RERA after failing to get possession of the house for 9 years.
### Builder Said Covid-19, Chairman’s Death, Non-Availability of Sufficient Water, etc. Prevented Him from Delivering the Home in 2015
The builder’s lawyers said before Haryana RERA:
- **Chairman’s death**: The builder had applied for environmental clearance on October 20, 2011. However, the decision and issuance of the certificate remained in abeyance for a long time due to the sudden demise of the chairman of the environmental impact assessment (EIA) committee in an unfortunate road accident. The builder finally got the environmental clearance on June 17, 2013.
- **Government caused delay in approval**: The builder had applied for the revision in building plans of the said housing project. However, for no fault of the builder, the plans were approved by the department only after a delay of 2 years.
- **Economic meltdown and Covid-19**: As a matter of fact, economic meltdown, financial crisis, delay in granted sanctions and approvals from the concerned government departments, sluggishness in the real estate sector, multiple disputes between the workforce, labor, and contractors resulting in a shortage of labor and workforce, and change in contractors, non-availability of sufficient water for construction due to the restrictions imposed by local administration, restricted construction activities towards protection of the environment as directed by the local administration and the NGT, and moreover, obstruction of construction due to the Covid-19 outbreak.
### Haryana RERA Rejects Covid-19 as a Reason for Delay in Possession of a House That Was Supposed to Be Offered in 2015
Haryana RERA, in its judgment dated March 19, 2025, said:
- The builder has raised the contention that the construction of the tower has been delayed due to force majeure circumstances such as a shortage of labor force in the NCR region, delay on part of government authorities in granting approvals, and the major spread of Covid-19 across the world. However, all the pleas advanced in this regard are devoid of merit.
- First of all, the possession of the housing unit in question was to be offered by December 7, 2015. Moreover, time taken in governmental clearances cannot be attributed as a reason for delay in the housing project.
- Furthermore, some of the events mentioned by the builder are routine in nature, happening annually, and the builder is required to take the same into consideration while launching the project. Thus, the builder cannot be given any leniency on the basis of the aforesaid reasons, and it is a well-settled principle that a person cannot take benefit of his own wrong.
### Haryana RERA Final Judgment
Haryana RERA ordered the builder to pay 11.01% interest to the homebuyer from December 7, 2015, till the offer of possession plus two months.
- The builder is directed to pay interest to the homebuyer against the paid-up amount at the prescribed rate, i.e., 11.1% p.a. For every month of delay from the due date of possession, i.e., December 7, 2015, till offer of possession plus two months or actual handing over of possession, whichever is earlier, as per Section 18 (1) of the Act of 2016 read with rule 15 of the rules.
- The builder is further directed to pay a cost of Rs 20,000.
### Calculation
- Paid up amount: Rs 62,79,109
- Time period: December 7, 2015, till May 19, 2025 (assuming builder gave possession on March 19, 2025, when this judgment was announced)
- Interest: 11.1%
### Final Amount
11.1% of 6279109 * 9 years 5 months = Rs 65,63,237.79
### What Is the Significance of This Judgment for Homebuyers?
Avnish Sharma, Partner at Khaitan & Co, says, “The homebuyers prevailed in this matter because the promoter was found to be in clear violation of their statutory obligations under Section 11(4)(a) of the Real Estate (Regulation and Development) Act, 2016 (RERA), as well as the express terms of the builder-buyer agreement dated June 25, 2013. Sharma shares some important legal precedents and regulatory principles that are reinforced by this Haryana RERA order:
- **Reinforcement of builder obligations under Section 11(4)(a)**: The ruling underscores that promoters are strictly bound by the timelines promised in builder-buyer agreements. Even if construction is delayed for reasons beyond their control, unless qualifying under the narrow definition of force majeure under RERA, they remain liable for non-compliance.
- **Grace period must be contractually justified and limited**: Builders must ensure that any grace period for delays is clearly justified and limited in the builder-buyer agreement. This helps prevent unreasonable delays and ensures homebuyers are not left in the lurch indefinitely.
Frequently Asked Questions
What is RERA and how does it protect homebuyers?
RERA, or the Real Estate (Regulation and Development) Act, 2016, is a regulatory framework that aims to protect the interests of homebuyers and promote transparency in the real estate sector. It ensures that builders adhere to agreed timelines and deliver projects as promised.
What was the main reason for the delay in the homebuyer's possession in this case?
The builder cited several reasons, including the death of an environmental authority chairman, government delays in approvals, economic meltdown, and the Covid-19 pandemic. However, Haryana RERA found these reasons to be insufficient and not acceptable for the long delay.
How much compensation did the homebuyer receive?
The homebuyer was awarded Rs 65 lakh in compensation, which includes 11.01% interest on the paid-up amount from the due date of possession (December 7, 2015) till the offer of possession plus two months.
What is the significance of this ruling for other homebuyers?
This ruling reinforces the importance of RERA in protecting homebuyers' rights and ensuring builders adhere to agreed timelines. It sets a precedent for similar cases and emphasizes the need for builders to be accountable for delays.
What legal principles were reinforced by this judgment?
The judgment reinforced the principles that builders are strictly bound by the timelines promised in builder-buyer agreements and that any grace period for delays must be contractually justified and limited. It also highlighted that builders cannot take advantage of their own wrongs.
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