Punjab RERA Partly Allows Villa Buyer's Complaint, Says Unpaid Instalments Bar Possession

The Punjab Real Estate Regulatory Authority (RERA) on 30 September held that a homebuyer who failed to pay instalments for a villa despite repeated reminders could not claim an enforceable right to possession, but remained entitled to a refund of the amount paid with interest.

Member Binod Kumar Singh partly allowed Vikas Gupta's complaint against IREO Waterfront Private Limited and AIPL Housing & Urban Infrastructure Limited and directed the latter to refund Rs.40 lakh with 10.80% annual interest from the respective dates on which the payments were received until the date of actual refund. He observed:

“Upon holistic consideration of the complaint, reply, rejoinder, documents placed on record and the submissions advanced by learned counsel for the parties, this Bench finds that the complainant has failed its obligation to make the payment as per Builder Buyer agreement even after repeatedly reminder before the due date of possession from the respondent.”

Gupta booked a villa in the IREO Waterfront project in 2014. An allotment letter dated 16 May 2014 allotted him Villa No. 566, Type L, with a built-up area of 1,600 square feet, for a total consideration of Rs.1,30,48,522.

The parties executed a Builder-Buyer Agreement on 30 June 2014, which required the developer to offer possession by 30 June 2016. Gupta paid Rs.40 lakh by 29 May 2015, but the developers did not offer possession.

Before the Authority, Gupta submitted that he had paid more than 30% of the villa's price and sought possession, or alternatively an allotment of another unit at the original price, along with interest for delayed possession.

IREO Waterfront and AIPL argued that Gupta had failed to pay the second instalment in full. They said Gupta had to pay Rs.33,75,553 within six months of booking and that Rs.7,53,269 remained outstanding despite repeated reminders. They also relied on a final opportunity letter dated 18 February 2016, in which they warned that they would cancel the allotment if Gupta failed to pay the outstanding dues.

The relevant pocket received a partial completion certificate on 29 November 2017, after the contractual possession date. Gupta filed the complaint on 1 December 2022.

The Authority found that Gupta had failed to fulfil his payment obligations and could not establish an enforceable entitlement to possession under Section 18 of the Real Estate (Regulation and Development) Act, 2016. It held:

“The complainant has failed to establish any enforceable entitlement to possession under Section 18 of the Real Estate (Regulation and Development) Act, 2016.”

However, the Bench also held that Gupta could recover the amount he had paid. It observed that “the only amount refundable to complainant is Rs.40,00,000/- along with interest as per Section 18(1) of the Act of 2016”.

Accordingly, the RERA partly allowed the complaint and directed AIPL to refund Rs.40 lakh with interest at 10.80% per annum, calculated from the respective dates on which Gupta made the payments until the date of actual refund. It also held both promoters jointly and severally liable for the payment.

Appearances for petitioner (Vikas Gupta): Advocate Rajan Kumar Hans.

Appearances for respondent (IREO Waterfront Private Limited and AIPL Housing & Urban Infrastructure Limited): Advocate Sandeep Verma.