RERA Tribunal Upholds Refund Order for Carpet Area Shortfall by PS Group

Kolkata: The West Bengal Real Estate Appellate Tribunal has upheld an order directing a builder to refund money with interest for a shortfall in the carpet area of a commercial office unit, holding that statutory real estate law prevails over contrary terms in a private agreement.

The dispute relates to an office space in the commercial project “ABACUS” in New Town, developed by PS Group Realty Pvt. Ltd. The allottee, Ayush Tradelinks Private Limited, approached the West Bengal Real Estate Regulatory Authority (WBRERA) alleging that the actual carpet area of the office was smaller than stated in the agreement, despite full payment.

On WBRERA’s directions, the New Town Kolkata Development Authority (NKDA) carried out a physical measurement of the unit. The NKDA report found the carpet area to be 380 sq ft, compared to 390 sq ft mentioned in the agreement. Accepting the report, the regulator ordered a refund with interest for the carpet area shortfall, while declining to grant interest for the alleged delay in handing over possession. Both sides challenged the regulator’s order before the Appellate Tribunal.

The builder argued that the variation fell within a 3% tolerance allowed under the agreement and contended that carpet area should be calculated by including plaster, finishes, and additional wall thickness. The allottee sought interest for delay in taking possession.

Dismissing the builder’s appeal, the Tribunal held that the statutory definition of “carpet area” under the West Bengal Housing Industry Regulation Act and the Real Estate (Regulation and Development) Act is binding. It ruled that carpet area means the net usable floor area and excludes external walls, plaster, finishes, and structural components. Contractual clauses permitting tolerance were held to be inconsistent with the mandatory form of agreement prescribed under the rules.

On the issue of possession, the Tribunal dismissed the allottee’s appeal, noting that a valid possession notice had been served after the occupancy certificate was obtained. Since the agreement did not permit possession to be withheld on the ground of a dispute over carpet area, the claim for interest on delayed possession was rejected. The Appellate Tribunal affirmed the WBRERA order in full and directed that the amount deposited by the builder be released to the allottee along with any accrued interest.

This ruling sets a significant precedent for real estate disputes in West Bengal, emphasizing the importance of statutory definitions and regulations over private contractual terms. It also highlights the need for transparency and adherence to regulatory standards in the real estate sector.