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By Staff Reporter
The Karnataka Real Estate Regulatory Authority (RERA) has delivered a noteworthy ruling, stating that homebuyers who have accepted a refund of the booking amount are not eligible to claim interest for delays in project completion. The ruling, issued in a case involving Puravankara Ltd’s project in Bengaluru, underscores the importance of thoughtful consideration before accepting refunds.

In this specific case, Bharath C had booked a luxury apartment in Puravankara Ltd’s Purva Westend project on Hosur Road for Rs 5 lakh in 2020. Discovering that the project was entangled in litigation after receiving legal documents, Bharath sought an indemnity clause in the sale agreement, which the developer did not incorporate.

Despite multiple follow-ups, the developer did not respond to the request for an indemnity clause. In January 2021, Bharath decided to withdraw from the project, citing concerns about the ongoing legal issues. After a period of non-response from the developer, Bharath received a refund of Rs 4.7 lakh in April, with the developer deducting bank charges.

Challenging the delay in the refund process, Bharath approached the Karnataka RERA seeking compensation for the delay exceeding six months. However, the RERA ruling highlighted that Bharath, having accepted and withdrawn the initial refund, acknowledged it as a full and final settlement.

The doctrine of estoppel was invoked by the RERA, stating that once the complainant has accepted the amount as a complete settlement, any claim for interest on the delayed period is no longer viable. The Authority clarified that the issue in this case was not related to the delay itself but stemmed from the homebuyer’s voluntary withdrawal from the project.

This ruling builds on the principle that accepting a refund under certain conditions may constitute a final settlement, barring subsequent claims for interest. Homebuyers are advised to exercise caution and ensure due diligence before accepting refunds, particularly when projects are mired in legal complexities.

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