Homebuyers Continuing Project Can Claim Delay Interest, Not Compensation: Punjab RERA

The Punjab Real Estate Regulatory Authority (RERA) has held that a homebuyer who chooses to continue with a delayed housing project cannot separately seek compensation for the delay under Section 18(1) of the Real Estate (Regulation and Development) Act, 2016.

The remedy in such a case is interest for every month of delay until possession is handed over, Adjudicating Officer R.S. Rai ruled while dismissing a complaint filed by Renu Choudhary and Amit Choudhary against Sushma Buildtech Limited.

The homebuyers had sought ₹5 lakh for mental agony and harassment arising from the delay. They also sought relief for loss of capital gains exemption, rental costs and interest expenses.

Rai observed, “Wording of this provision of the Act, makes it crystal clear that allottee/complainant can only seek compensation, if he/she withdraws from the project. Otherwise, if he/she does not intend to withdraw from the project, he/she shall be paid only interest for every month of delay, till handing over the possession, at such rate as may be prescribed and this remedy has already been availed by the complainants of the case in hand.”

The case concerned a 3BHK residential unit on the 10th floor of Sushma Buildtech's project at Village Gazipur, Tehsil Derabassi, SAS Nagar, Punjab. The allotment letter and agreement were both dated November 17, 2020.

Under the agreement, possession was to be handed over by May 19, 2022. The homebuyers claimed they had sold their residential property in Sector 21, Panchkula, to purchase the flat and claim the benefit of capital gains exemption under the Income Tax Act. They also said the purchase was intended to help them avoid rental costs.

They alleged that they had regularly paid instalments but Sushma Buildtech failed to complete the project and hand over possession within the agreed period. They filed the complaint on October 28, 2022 under Section 31 of the RERA Act read with Rule 37 of the Punjab RERA Rules.

Sushma Buildtech attributed the delay to the COVID-19 pandemic and its recurrence in December 2020 and January 2021. It contended that the disruption was beyond its control and constituted a force majeure event under the agreement. The developer also argued that the homebuyers had not paid the entire sale consideration.

The developer relied on a February 25, 2025 order of the RERA Authority, which had allowed interest for the delayed period. It argued that the homebuyers could not maintain a separate claim for compensation under Section 18(1).

Rai noted that the February 25 order had not been challenged or set aside by a competent authority. Its findings therefore remained binding on both sides, he observed.

Section 18(1) deals with the remedies available when a developer fails to complete a project or hand over possession within the agreed time. It creates a distinction between a buyer who wants to leave the project and one who wants to continue with it.

If the buyer withdraws, the developer has to return the amount received, along with interest and compensation. If the buyer continues with the project, the buyer is entitled to interest for every month of delay until possession is handed over.

Rai also referred to the Supreme Court's decision in Newtech Promoters and Developers Pvt. Ltd. v. State of UP and Others. The order notes that claims for refund and interest fall before the RERA Authority, while compensation claims fall within the jurisdiction of the Adjudicating Officer.

Since the homebuyers had chosen to continue with the project and had already availed the remedy of delay interest, Rai held that they were not entitled to compensation or the other reliefs claimed.

The complaint was dismissed and disposed of on September 24, 2026, with no order as to costs.

For Petitioner (Renu Choudhary & Amit Choudhary): Advocate Hrithik Chaudhary.

For Respondent (Sushma Buildtech Limited): Advocate Vishal Singal.