Haryana RERA Orders Assotech Moonshine To Pay 10.80% Delay Interest For 10-Year Possession Delay

The Haryana Real Estate Regulatory Authority (HARERA), Gurugram, has directed Assotech Moonshine Urban Development Pvt. Ltd. to pay delayed possession interest to a homebuyer after finding that it had failed to hand over an apartment in its "Assotech Blith" project. The contractual possession date had expired on July 20, 2016.

A bench of Chairman Arun Kumar observed that the builder had still not obtained the Occupation Certificate nearly a decade after the agreed possession date. Holding that the homebuyer had chosen to remain in the project, the Authority ruled that she was entitled to delayed possession interest at the prescribed rate.

The authority observed, “Notwithstanding the foregoing, the respondent has failed to obtain the Occupation Certificate from the competent authority till date despite the expiry of approximately ten years from the promised date of possession.”

The complainant booked an apartment in the builder's residential project, "Assotech Blith", at Sector 99, Gurugram on May 3, 2012. She was subsequently allotted Apartment No. A-904 on the ninth floor of Tower A, measuring 1,365 sq ft in super area.

She opted for a construction-linked payment plan. The total sale consideration was fixed at ₹76.35 lakh. According to the record, she paid ₹69.76 lakh towards the apartment.

The allotment letter was issued on July 20, 2012. Under its terms, possession was to be delivered within 42 months from the date of allotment. The agreement also provided a grace period of six months. HARERA held that the due date of possession worked out to July 20, 2016.

The homebuyer alleged that despite expiry of the possession timeline, the builder continued to raise payment demands. She pointed to a demand letter issued in March 2017 and subsequent communications seeking further payments.

According to the complaint, she raised concerns over the delay through emails sent in March and April 2017. In response, the builder informed her that the apartment was expected to be completed by December 31, 2018 and requested her to continue making payments.

Relying on those assurances, she paid a further sum demanded by the builder in April 2017. Even after that, possession was not offered.

The homebuyer later issued a legal notice seeking refund of the amounts paid along with interest and compensation. She alleged that no response was received. After the project remained incomplete, she approached HARERA seeking possession of the apartment, delayed possession interest and other reliefs.

The builder contested the complaint. It argued that the complainant was an investor and not an allottee entitled to protection under the Act.

The builder also attributed the delay to several factors. These included liquidation proceedings involving Assotech Limited, restrictions on construction activities imposed in the NCR to curb pollution and the disruption caused by the Covid-19 pandemic.

Rejecting the objection regarding the complainant's status, the Authority held that she squarely fell within the definition of an allottee under the Act. It noted that the concept of an investor is not recognised under the statute.

The Authority further examined the builder's plea that force majeure circumstances had delayed completion of the project. It found that the restrictions cited by the builder did not justify the prolonged delay in handing over possession.

With regard to the liquidation proceedings relied upon by the builder, HARERA held that the complainant was not a party to those proceedings and that they were not binding on her. The Authority also noted that no order had been placed on record declaring the liquidation period to be a zero period.

The Authority similarly declined to accept the Covid-19 pandemic as a valid ground for excluding the period of delay. It noted that the possession deadline had expired years before the outbreak.

Referring to the Delhi High Court's decision in Halliburton Offshore Services Inc. v. Vedanta Ltd., the Authority observed:

“The outbreak of a pandemic cannot be used as an excuse for non-performance of a contract for which the deadlines were much before the outbreak itself.”

While considering the relief sought by the complainant, HARERA noted that she had elected to remain in the project and seek possession instead of withdrawal.

The Authority recorded that the complainant had paid ₹69.76 lakh towards the apartment. It further noted that the Occupation Certificate had not been obtained till date despite the lapse of nearly ten years from the promised possession date.

The Authority also observed that since the Occupation Certificate had not yet been granted, the allottee would be entitled to a reasonable period of two months from a valid offer of possession to take possession of the apartment.

Holding that the builder had violated its obligations by failing to hand over possession by the due date, HARERA ruled that the complainant was entitled to delayed possession interest.

Accordingly, the Authority directed the builder to pay delayed possession interest at the rate of 10.80% per annum on the amount deposited by the homebuyer from July 20, 2016.

The interest will be payable until a valid offer of possession plus two months, or actual handover of possession after obtaining the Occupation Certificate, whichever is earlier.

HARERA also directed the builder to hand over possession of the apartment after obtaining the Occupation Certificate. The Authority further directed execution of the conveyance deed in favour of the homebuyer within 60 days of obtaining the certificate.

It clarified that the builder cannot charge any amount from the homebuyer that does not form part of the agreement between the parties.