Right To Interest For Delayed Possession Cannot Be Waived Through Consent Letter: Punjab RERA

The Punjab Real Estate Regulatory Authority has reiterated that a plot buyer's statutory right to claim interest for delayed possession cannot be defeated by a consent undertaking executed in favour of a developer.

The Authority consequently directed ATS Estates Pvt. Ltd. to pay interest to buyers of a plot in its ATS Golf Meadows-5 project at Derabassi.

A bench of Member Arunvir Vashista rejected the developer's reliance on a consent letter signed by the buyers in January 2023. Referring to the Supreme Court's decision in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P., the Authority observed:

"The right to claim interest on the period of delayed possession is an indefeasible and unqualified right given to an allottee by the statute which cannot be taken away or declined."

The dispute concerned Plot No. 129 measuring 146.50 square yards in ATS Golf Meadows-5. The buyers booked the plot in March 2020 and entered into an agreement for sale on September 11, 2020 for about Rs. 23.58 lakh.

Under the agreement, possession was to be delivered by September 11, 2022. The buyers alleged that the developer issued only a paper offer of possession on December 5, 2022 without obtaining the Occupation Certificate or Completion Certificate. They contended that actual possession was delivered only on March 12, 2025, when the sale deed was also executed.

Opposing the complaint, the developer argued that the project's completion date declared before the Authority was October 24, 2024. It maintained that possession had already been offered on December 5, 2022. The developer also relied on a consent letter dated January 20, 2023. According to it, the buyers had undertaken not to pursue any future claim or dues against the company and were therefore not entitled to relief.

The Authority noted that possession under the agreement was due by September 11, 2022. However, the plot was actually handed over only on March 12, 2025. It therefore found a delay of 26 months in delivery of possession and held that the buyers were entitled to interest for that period.

Rejecting the developer's reliance on the consent letter, the Authority observed:

"In the light of above observations made by the Hon'ble Supreme Court the contention that has been raised on behalf of the respondent highlighting the consent letter dated 20.01.2023 signed by the complainants vide which they agreed and undertook not to pursue any claim/ due against the respondent company in future is found to be without any merit and substance."

Holding that the buyers were entitled to interest for the delayed period of possession, the Authority directed ATS Estates to pay interest on the amount deposited by them at the rate prescribed under the Punjab Real Estate (Regulation and Development) Rules, 2017, namely the highest MCLR plus two per cent.

The interest is payable for the period from January 11, 2023 to March 12, 2025. The Authority further held that if the amount is not paid, it would be recoverable as arrears of land revenue.