RERA Impact: Homebuyer Receives Rs 65 Lakh Compensation for Over 9 Years Delay in Gurgaon Flat
A homebuyer in Gurgaon has been awarded Rs 65 lakh in compensation for a nine-year delay in the possession of a flat, thanks to a ruling by Haryana RERA. The builder's reasons, including the impact of Covid-19 and regulatory issues, were dismissed. This case sets a precedent for protecting homebuyers' rights.
ReraHaryana ReraGurgaon Real EstateReal Estate CompensationHomebuyer RightsReal Estate NewsMay 23, 2025
The homebuyer, who paid around Rs 62 lakh for the property in 2013, was promised possession by December 7, 2015. However, the buyer has yet to receive the property. The builder cited several reasons for the delay, including the impact of the Covid-19 pandemic, the untimely death of the environmental authority’s chairman in a road accident, an economic meltdown, and a lack of sufficient water in the NCR region. However, Haryana RERA found none of these reasons acceptable.
One of the key aspects of this case is that the homebuyer chose to fight for compensation under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA), rather than cancel the home booking and seek a refund. Section 18 is specifically designed to provide compensation to homebuyers who do not wish to withdraw from a housing project but seek financial redress for delayed possession.
Haryana RERA conducted a thorough investigation and used Rule 15 of the RERA rules to determine the compensation amount. Rule 15 stipulates that the interest compensation should be calculated based on the State Bank of India (SBI) highest MCLR rate plus 2%. Consequently, Haryana RERA issued a judgment on March 19, 2025, ordering the builder to pay 11.01% interest to the homebuyer from 2015 until the date of possession.
How Did This Fight Start?
According to the Haryana RERA judgment dated March 19, 2025, the timeline of events is as follows:
- June 6, 2012: The builder received sanctions for the building plans from the local government.
- June 17, 2013: The builder issued an allotment letter to the homebuyer for a 1,990 square feet unit in Gurgaon, Haryana, 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 for possession was December 7, 2015. The homebuyer paid Rs 62.79 lakh, which included the basic sale price and TDS.
- March 13, 2023: The homebuyer filed a case against the builder with Haryana RERA after failing to get possession of the house for over nine years.
Builder's Reasons for Delay
The builder’s lawyers presented several reasons for the delay to Haryana RERA:
- Chairman’s Death: The builder had applied for environmental clearance on October 20, 2011. However, the decision and issuance of the certificate were delayed due to the untimely death of the chairman of the environmental impact assessment (EIA) committee in a road accident. The builder finally received the environmental clearance on June 17, 2013.
- Government Delay in Approval: The builder applied for the revision of the building plans for the housing project, but the plans were approved by the department only after a two-year delay.
- Economic Meltdown and Covid-19: The builder cited the economic meltdown, financial crisis, delay in granted sanctions and approvals from government departments, sluggishness in the real estate sector, multiple disputes between the workforce, labor, and contractors, non-availability of sufficient water for construction, and restrictions imposed by local administration and the NGT due to environmental concerns. Additionally, the builder mentioned the obstruction of construction due to the Covid-19 outbreak.
Haryana RERA Rejects Builder's Reasons
Haryana RERA, in its judgment dated March 19, 2025, dismissed the builder's reasons for the delay:
- Force Majeure Claims: The builder contended that the construction of the tower was delayed due to force majeure circumstances such as a shortage of labor in the NCR region, delays in government approvals, and the global spread of Covid-19. However, Haryana RERA found these pleas to be devoid of merit.
- Government Approval Delays: The possession of the housing unit was to be offered by December 7, 2015. The regulatory authority noted that delays in government clearances cannot be attributed as a reason for the delay in the housing project.
- Routine Events: Some of the events mentioned by the builder, such as annual occurrences, should have been considered while launching the project. Therefore, the builder cannot be given leniency based on these reasons.
Haryana RERA Final Judgment
Haryana RERA ordered the builder to pay 11.01% interest to the homebuyer from December 7, 2015, until the offer of possession plus two months. The key points of the judgment are:
- The builder is directed to pay interest to the homebuyer against the paid-up amount at the prescribed rate of 11.1% per annum. The interest will be calculated for every month of delay from the due date of possession (December 7, 2015) until the 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 of Compensation
- Paid-up Amount: Rs 62,79,109
- Time Period: December 7, 2015, to May 19, 2025 (assuming builder gave possession on March 19, 2025, when the judgment was announced)
- Interest Rate: 11.1%
Final Amount: 11.1% of 62,79,109 9 years 5 months = Rs 65,63,237.79
Significance of This Judgment for Homebuyers
Avnish Sharma, Partner at Khaitan & Co, explains the significance of this judgment: “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 highlights some important legal precedents and regulatory principles 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: This judgment emphasizes that any grace period for delays must be clearly defined and justified in the builder-buyer agreement. Builders cannot unilaterally extend deadlines without facing legal consequences.
This case sets a strong precedent for homebuyers, reinforcing their rights and the importance of RERA in ensuring that builders adhere to their commitments.
Frequently Asked Questions
What is RERA?
RERA stands for Real Estate (Regulation and Development) Act, 2016. It is a regulatory framework designed to protect homebuyers and promote transparency and accountability in the real estate sector.
What compensation did the homebuyer receive?
The homebuyer received Rs 65 lakh as compensation for the nine-year delay in the possession of the flat.
What were the builder's reasons for the delay?
The builder cited reasons such as the impact of the Covid-19 pandemic, the untimely death of the environmental authority’s chairman, an economic meltdown, and a lack of sufficient water in the NCR region.
Why were the builder's reasons dismissed by Haryana RERA?
Haryana RERA found that the builder's reasons, including the impact of the pandemic and government delays, were not acceptable as they were either routine or could have been anticipated and managed.
What is the significance of this judgment for homebuyers?
This judgment reinforces the importance of RERA in protecting homebuyers' rights and ensures that builders adhere to the timelines and commitments outlined in builder-buyer agreements.
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