The Haryana Real Estate Regulatory Authority (H-RERA) has directed a developer to refund ₹14.5 lakh to a homebuyer, along with 10.80% annual interest, after the registration of the concerned Gurugram housing project was revoked and construction remained stalled.
The case highlights the protection available to homebuyers when a real estate project becomes incapable of being completed because of regulatory action against the developer.
Homebuyer Paid ₹14.5 Lakh for Gurugram Flat
The complainant, an Allahabad-based homebuyer, had booked a 642 sq. ft. residential unit in a project located in the Dhanwapur village area of Gurugram.
The total consideration of the flat was approximately ₹26 lakh.
The buyer initially paid ₹1,28,470 to the developer. The payment was acknowledged by the builder and a unit was subsequently allotted to him.
The buyer continued making payments and eventually paid approximately ₹14.5 lakh, nearly half of the agreed consideration.
An allotment letter was issued in December 2021.
Construction Work Came to a Standstill
According to the complaint, the homebuyer repeatedly attempted to contact the developer regarding the progress of the project and the expected date of possession.
However, he alleged that the developer failed to provide a satisfactory response regarding the delay.
When the buyer visited the project site, he found that construction had stalled.
The complainant alleged that the developer was unable to provide a definite timeline for completion and possession.
Despite the lack of meaningful progress at the project site, the developer allegedly continued to demand further instalments from the homebuyer.
The buyer refused to make additional payments and instead sought a refund of the amount already paid.
Refund Was Also Delayed
The homebuyer alleged that even after requesting cancellation and refund, the developer did not immediately return his money.
Instead, the developer reportedly cited “unavoidable circumstances” and asked the buyer to wait for another 10 to 15 days.
With the project remaining incomplete and the refund not forthcoming, the homebuyer eventually approached Haryana RERA seeking relief.
Gurugram Project Had Lost Its RERA Registration
A significant factor considered by the Authority was the status of the project’s RERA registration.
The registration certificate of the project had been revoked.
According to the Authority, once the registration certificate stood revoked, the developer could no longer continue the real estate business in respect of the project in the manner permitted under the RERA framework.
The Authority also considered the serious violations committed by the developer and concluded that there appeared to be no realistic possibility of completing the project within the promised timeline.
Haryana RERA Orders Full Refund
Haryana RERA ruled in favour of the homebuyer and directed the developer to refund the entire ₹14.5 lakh paid by him.
The refund is to carry interest at the rate of 10.80% per annum, calculated from the date of each payment until the date of actual realisation.
The developer has been given 90 days to comply with the order.
The Authority also indicated that the complainant could separately approach the Adjudicating Officer for other reliefs that may fall within the latter’s jurisdiction.
What Happens When a Builder’s RERA Registration Is Revoked?
The case is significant because it demonstrates the consequences that can follow when a developer is unable to continue a registered project after regulatory action.
The Authority observed that where a developer discontinues its business because of suspension or revocation of its RERA registration, or for another reason, a homebuyer may be entitled to seek a refund of the amount paid along with applicable interest, depending on the circumstances of the case.
This protection becomes particularly important where the project has stalled and there is no reasonable prospect of the promised possession being delivered.
Section 18 of RERA and Homebuyer Refund
Section 18 of the Real Estate (Regulation and Development) Act, 2016 deals with the promoter’s liability when an apartment, plot or building cannot be delivered in accordance with the agreed terms.
Where a promoter fails to complete the project or is unable to give possession within the agreed period, the statutory framework provides remedies to the allottee, including return of the amount paid with interest and compensation, subject to the circumstances and applicable provisions.
The provision is particularly relevant where the promoter’s business is discontinued due to suspension or revocation of project registration.
The underlying principle is that a homebuyer should not be left indefinitely exposed to a stalled project after having paid a substantial portion of the purchase price.
Why the Ruling Matters to Homebuyers
The Haryana RERA decision highlights several important lessons for buyers:
1. Check the Project’s RERA Status
Homebuyers should regularly verify the RERA registration status of their project, particularly when construction is delayed.
2. Preserve Payment Records
Buyers should retain receipts, bank statements, allotment letters, agreements, demand notices and correspondence with the developer.
These documents can become important evidence in a refund or interest claim.
3. Do Not Ignore Construction Delays
Repeated delays and an absence of a clear possession schedule can be warning signs. Buyers should seek written clarification from the promoter rather than relying solely on verbal assurances.
4. Regulatory Revocation Can Strengthen the Refund Case
Where a project has suffered revocation of its RERA registration and construction has stalled, the buyer may have grounds to seek appropriate statutory relief, including refund and interest, depending on the facts.
5. Interest Can Form Part of the Refund
The Authority in this case directed the developer to pay 10.80% annual interest from the dates of the respective payments until actual realisation.
Key Takeaway
The Haryana RERA ruling sends a clear message that homebuyers cannot be left indefinitely in a stalled project after paying substantial amounts to a developer.
Where a project loses its RERA registration, construction remains stalled and there is no reasonable prospect of timely possession, the regulatory framework can provide a route for the allottee to seek refund of the money paid together with applicable interest.
In this case, the developer was directed to return ₹14.5 lakh with 10.80% annual interest, giving the homebuyer a significant remedy after the Gurugram project failed to progress.
