Rajasthan REAT Rejects AFNHB's Plea To Pay 3% Delay Interest Instead Of RERA Rate For No-Profit Housing Project

The Rajasthan Real Estate Appellate Tribunal has recently refused to allow the Air Force Naval Housing Board (AFNHB) to pay homebuyers delay interest at 3% instead of the statutory rate, reiterating that, as a registered promoter under RERA, it cannot deviate from the Rajasthan Real Estate (Regulation and Development) Rules, 2017.

A bench of Chairperson Justice Madan Gopal Vyas and Judicial Member Yudhishthir Sharma dismissed four cross-appeals filed by AFNHB and two allottees.

It upheld the Rajasthan Real Estate Regulatory Authority's order directing AFNHB to pay delay interest at 10.90% per annum. It also rejected its plea to exclude a 22-month delay caused by Jaipur Development Authority (JDA) stop-work notices.

Relying on its earlier decision in Air Force Naval Housing Board v. Arpita Jain Garg, the Tribunal observed:

"As per finding of Question No.3 in earlier decided Appeal No.139/2024 on 25/10/2024, the appellant-AFNHB is also not competent to deviate from the provisions of the RERA Rules, 2017. Resultantly, alternative prayer regarding award of 3% delay interest is also not acceptable."

The appeals arose out of AFNHB's "Jal Vayu Tower" housing project in Jaipur. The Board, a welfare society registered under the Societies Registration Act, launched the self-financed project in 2011 for retired Air Force and Naval personnel and widows on a "no profit, no loss" basis. The project was expected to be completed by the end of 2017.

Construction was delayed due to JDA stop-work notices, termination of the construction contract, and the COVID-19 pandemic. Partial completion and occupancy certificates were issued between October 2021 and June 2022, but possession was delivered years after the promised date.

In September 2025, the Rajasthan RERA directed AFNHB to pay delay interest at 10.90% per annum and allowed the 3% interest already paid to be adjusted against its statutory liability.

Before the Tribunal, AFNHB argued that the 22-month period during which construction remained stalled should be excluded as force majeure.

It also wanted permission to pay only 3% delay interest and requested that the amount already deposited be not dispersed during the pending of an appeal in the High Court. 

The allottees, on the other hand, argued that once AFNHB registered as a promoter under RERA, it was bound by the the statutory rate mandated by RERA. 

The tribunal found that the issues had already been settled in Arpita Jain Garg and saw no reason to revisit them. It also declined AFNHB's request to withhold the amount deposited under Section 43(5), observing that the mandatory pre-deposit requirement.

It directed that the deposited amount be released after the expiry of the limitation period, in line with the Rajasthan High Court's order.

Accordingly, the tribunal dismissed all four appeals, upheld the Rajasthan RERA's order, and directed that the 3% interest already paid by AFNHB be adjusted against its statutory liability.

For Appellant/Promoter (Air Force Naval Housing Board): Advocate Mahendra Singh Yadav.

For the Respondent/Appellant-Allottees (Anand Teterwal and Sukhveer Singh Shekhawat): Advocate Unnati Vijay.