The Punjab Real Estate Regulatory Authority (RERA) has directed Sushma Developers and its directors to execute a registered sale agreement and transfer a commercial unit in the Sushma Empiria project to the legal heirs of a deceased Major General. The authority also awarded assured returns at 12% per annum for a specified period and statutory interest for the subsequent delay in handing over possession.
The authority further directed its secretary to initiate separate proceedings against the promoter under Section 61 read with Section 13(1) of the Real Estate (Regulation and Development) Act, 2016, for allegedly accepting more than 10% of the sale consideration without executing a written agreement for sale.
The order addresses several issues, including the mandatory execution of sale agreements, assured returns, delayed possession, alleged excess recovery for carpet area and compliance with statutory obligations under RERA.
Background of the Dispute
The complaint was filed by the legal representatives of Maj Gen Dr Shamsher Singh Chauhan, who booked Complete Business Unit (CBU) No. 12 in the Sushma Empiria project on January 29, 2020.
According to the complainants, the deceased purchaser paid ₹3 crore between January and June 2020 towards the commercial unit. However, the developer did not execute a registered agreement for sale despite receiving the payments.
The developer disputed the amount claimed by the complainants. It contended that it had received ₹1 crore towards the basic sale price of the unit, while the other payments related to proposed bookings of additional units that were never finalised.
The promoter also argued that possession of the unit was due by December 31, 2027.
After considering the parties’ submissions, Punjab RERA issued directions concerning the execution of the sale agreement, transfer of the unit, assured returns, statutory interest and verification of the alleged excess recovery for carpet area.
Offer Letter Cannot Replace Statutory Agreement for Sale
Punjab RERA held that an offer letter or other informal documentation cannot substitute for the statutory agreement for sale required under Section 13 of the RERA Act.
Section 13(1) restricts a promoter from accepting more than 10% of the cost of an apartment, plot or building as an advance or application fee without first entering into a written agreement for sale and registering it in accordance with the applicable law.
In the present case, the authority directed Sushma Developers and its directors to execute the registered sale agreement and complete the transfer of the commercial unit in favour of the deceased purchaser’s legal heirs, in accordance with the law and sanctioned plans.
The authority also directed its secretary to initiate separate proceedings under Section 61 read with Section 13(1) to examine the alleged violation arising from the acceptance of payments without executing the required agreement.
Punjab RERA Awards 12% Assured Returns
The complainants sought assured returns in accordance with the arrangement associated with the commercial unit.
Punjab RERA directed the promoter to pay assured returns at 12% per annum on the claimed basic sale price of ₹3 crore, for the period from April 1, 2021, to January 28, 2023.
Payments already made under the assured-return or discount arrangement are to be adjusted against the amount payable, thereby avoiding duplication of payments for the same entitlement.
The direction recognises the agreed assured-return arrangement for the specified period, subject to the adjustments prescribed by the authority.
Statutory Interest for Delay in Possession Under Section 18
In addition to the assured returns, Punjab RERA directed the promoter to pay statutory interest under Section 18 of the RERA Act from January 29, 2023, until lawful possession is handed over.
Section 18 provides remedies to an allottee in circumstances involving a promoter’s failure to complete or give possession in accordance with the agreement for sale or the applicable statutory requirements.
The authority distinguished between the assured returns payable for the earlier period and statutory interest applicable to the subsequent delay.
However, it expressly barred double recovery for the same period, ensuring that the complainants would not receive overlapping monetary benefits for an identical period.
Dispute Over Carpet Area and Alleged Excess Recovery of ₹69 Lakh
The complainants also alleged a discrepancy in the commercial unit’s carpet area.
According to their claim, the represented carpet area was 5,040 square feet, but the actual area was allegedly short by approximately 817 square feet. They claimed that this discrepancy had resulted in an excess charge of approximately ₹69 lakh.
Punjab RERA directed the promoter to submit the following documents and calculations within 30 days:
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An authenticated statement specifying the relevant area.
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A calculation showing the amount attributable to the permissible carpet area.
The authority further directed that a refund with applicable interest must be made if verification establishes that an excess amount was recovered.
The direction requires the promoter to substantiate the area and pricing calculations rather than treating the alleged excess recovery as established without verification.
Compliance Within 60 Days and Recovery Proceedings
Punjab RERA directed the promoter to comply with the remaining directions within 60 days of receiving a certified copy of the order.
The authority also prescribed a recovery process in the event that the monetary directions remain unfulfilled.
The directions collectively require the promoter to complete the legal transfer of the commercial unit, honour the applicable assured-return and interest obligations, and provide the necessary documentation to verify the carpet-area dispute.
Key Legal Takeaways for Homebuyers and Real Estate Promoters
The order highlights several important principles under the RERA framework:
1. Mandatory agreement for sale: A promoter cannot rely on an offer letter or informal documentation as a substitute for the statutory agreement required under Section 13(1).
2. Restriction on advance payments: A promoter cannot accept more than 10% of the cost of the property without first entering into the prescribed written and registered agreement for sale.
3. Assured returns and statutory interest: Contractual assured returns and statutory interest may apply to different periods, subject to the terms of the arrangement and applicable law.
4. Verification of carpet area: Disputes involving alleged excess charges require examination of sanctioned plans, authenticated area statements and supporting calculations.
5. Protection of legal heirs: The authority can direct the completion of the required transfer formalities in favour of the legal heirs of a deceased purchaser, subject to applicable legal requirements.
The order underscores the importance of statutory compliance, transparency in property transactions and accountability for amounts collected from allottees.
