Homebuyers' Right To Interest For Delayed Possession Cannot Be Defeated By Contract Terms: Punjab RERA

The Punjab Real Estate Regulatory Authority has recently held that a homebuyer's statutory right to interest for delayed possession cannot be defeated by contractual terms, while rejecting a developer's objections based on arbitration and alleged payment defaults.

A coram of Member Binod Kumar Singh held, "At the outset it is held that the Act provides for payment of interest in case of delay in handing over of possession, and this legal right of an allottee cannot be defeated by the lack of such a provision in any document issued by a promoter.”

The ruling came while allowing a complaint filed by Bhupesh Rana and Ambika Rana against Ambika Realcon Private Limited and directing the developer to pay ₹19,02,904 as delayed possession interest for delayed delivery of a flat in its Florence Park project in New Chandigarh.

The Authority also rejected the developer's plea that the dispute should be referred to arbitration.

“The arbitration clauses in agreements cannot override statutory remedies available under RERA.”, it observed.

The homebuyers had booked apartment No. FP/ASTER/B/502 in Tower Aster B of the Florence Park project for ₹87 lakh. Under the agreement for sale executed on December 18, 2021, possession was to be handed over by December 31, 2022.

According to the complainants, they paid ₹61,87,773 towards the flat, but possession was not handed over within the agreed timeline. On December 5, 2023, the developer raised a demand of ₹26.15 lakh despite not having obtained the occupation certificate and without factoring in compensation for the delay.

The homebuyers then moved Punjab RERA under Section 31 of the Real Estate (Regulation and Development) Act, 2016, read with Rule 36(1) of the Punjab Real Estate (Regulation and Development) Rules, 2017, seeking delayed possession interest along with other reliefs.

In response, Ambika Realcon claimed the buyers had defaulted on payments, insisted the dispute belonged before an arbitral tribunal under the agreement, and argued that the project was entitled to a six-month extension on account of the COVID-19 pandemic.

The complainants argued that the COVID-19 defence was untenable because the agreement itself was signed in December 2021, well after the pandemic began.

Rejecting this defence, Singh observed "It is noteworthy that the agreement was executed on 18.12.2021 after the occurrence of Covid-19. If respondents can execute the agreement and accept the amount for the unit on 18.12.2021, then they are liable to hand over possession on time as prescribed in the agreement dated 31.12.2022."

The Authority also rejected the developer's plea that alleged payment defaults disentitled the buyers from relief, noting that no substantiated claim had been established in the proceedings.

“As such in the absence of any details qua that no relief could be claimed by the respondent nor such an unestablished claim could negate the right of claiming interest on the delayed possession as has been conferred upon an allottee by the provision of Section 18 of the Act which is an indefeasible right."

The authority found that valid possession was offered only on November 7, 2025 after the occupation certificate was obtained. It awarded delayed possession interest at 10.80% per annum and directed payment within 90 days.

For Complainants (Bhupesh Rana and Ambika Rana): Advocate Hoshiar Chand.

For Respondent (Ambika Realcon Private Limited): Advocate Manpreet Singh Longia.