Refund Of Amount Paid By Homebuyer With Interest Did Not Bar Separate Compensation Plea: Haryana REAT

The Haryana Real Estate Appellate Tribunal (REAT) has recently dismissed an appeal by Pareena Infrastructure Private Limited and upheld a compensation award in favour of a homebuyer, holding that a refund with interest does not bar a separate claim for compensation.

A bench comprising member Chairman Justice Rajan Gupta and members Dr. Virender Parshad and Dinesh Singh Chauhan held that compensation for financial loss and mental agony under the Real Estate (Regulation and Development) Act, 2016, is an independent remedy.

“Thus, the present proceedings arise under a distinct statutory provision concerning compensation and are independent in nature. The claim for compensation is therefore not hit by the principle of res judicata, as it is not grounded on the same cause of action but represents a separate relief that the Act itself recognizes under Section 71", it held.

The dispute arose from a flat booked by the allottee in the “Coban Residences” project at Sector 99-A, Gurugram, developed by Pareena Infrastructure Private Limited, for a total sale consideration of Rs1,49,92,185. The allotment was made in November 2013, but construction remained slow, and the builder-buyer agreement was never executed.

Despite repeated site visits and letters seeking updates or a refund, the promoter did not respond. In 2018, the allottee was offered a flat in another project at a higher price, which he declined. Possession was never delivered within the stipulated period of 48 months.

The homebuyer thereafter approached the Haryana Real Estate Regulatory Authority. By an order dated February 9 2023 the Authority directed the promoter to refund the amount paid after deducting 10% of the sale consideration along with interest at 10% per annum.

It had further recorded that the homebuyer was at liberty to pursue a separate claim for compensation before the Adjudicating Officer.

Pursuant to this liberty, the homebuyer filed another complaint before Adjudicating Officer RERA, this time seeking compensation for financial loss mental agony, and physical harassment.

By an order dated May 9, 2025, the Adjudicating Officer awarded Rs 5 lakh towards financial loss and Rs 1 lakh towards mental agony and physical harassment, along with interest at 10.5% per annum.

The developer challenged this order before the Appellate Tribunal, contending that the earlier refund with interest constituted full compensation and that a separate claim would result in a double benefit.

The tribunal rejected the contention. It held that the claim for compensation arose from a distinct statutory right under Section 71 of the Act and was not barred by the principle of res judicata.

It also added that Section 18 provides for dual remedies, namely refund with interest and compensation for loss caused by the promoter's default.

Finding no infirmity in the award, the tribunal upheld the compensation and dismissed the developer's appeal.

Appearances: Advocates Navneet Kaur, Advocate for the Pareena Infrastructure