In a significant ruling interpreting the provisions of the Real Estate (Regulation and Development) Act, 2016 (RERA), the Punjab Real Estate Regulatory Authority (Punjab RERA) has dismissed a homebuyer’s claim seeking compensation, interest, and litigation expenses for delayed possession of an apartment after holding that the buyer had accepted possession and continued with the project.
The Authority observed that under Section 18 of the RERA Act, a homebuyer who chooses to remain in the project after taking possession cannot seek compensation in the manner claimed under the complaint. Instead, such buyers are entitled only to remedies specifically provided under the Act, subject to the appropriate legal forum.
Background of the Case
The complaint was filed by Baljit Singh Mahal against Sushma Buildtech Ltd. regarding an apartment in the Sushma Chandigarh Grande residential project located at Zirakpur, Punjab.
According to the complaint:
- The apartment (No. C-1201) was booked in October 2014.
- The Apartment Buyer’s Agreement was executed on November 25, 2014.
- The builder committed to handing over possession within 42 months from the agreement.
- However, possession was offered only in April 2021 and actual possession was handed over in August 2021, resulting in a delay of more than three years beyond the committed timeline.
The complainant alleged that the prolonged delay caused him significant financial loss, mental harassment, and additional expenses. Accordingly, he approached Punjab RERA seeking compensation, delayed possession interest, and litigation costs.
Builder Defended the Delay
Sushma Buildtech opposed the complaint and submitted that the homebuyer had:
- Accepted possession of the apartment.
- Executed the registered conveyance deed.
- Continued as an allottee without withdrawing from the project.
The developer further argued that the delay was covered under force majeure circumstances, including the disruption caused by the COVID-19 pandemic, and maintained that it had fulfilled all contractual obligations after handing over possession.
Punjab RERA’s Interpretation of Section 18
After examining the facts and the provisions of the RERA Act, Punjab RERA observed that Section 18 creates two distinct categories of homebuyers.
Homebuyers Who Withdraw from the Project
Where an allottee chooses to withdraw because of delayed possession, the buyer may seek:
- Refund of the amount paid.
- Interest.
- Compensation as permissible under the Act.
Homebuyers Who Continue with the Project
Where an allottee accepts possession and continues with the project, the available remedy is different.
Punjab RERA held that such buyers are generally entitled to claim interest for the delayed possession, but not compensation in the manner sought in the present proceedings under Section 18.
Reliance on Supreme Court Judgment
The Authority relied upon the landmark judgment of the Supreme Court in M/s Newtech Promoters and Developers Pvt. Ltd. vs State of Uttar Pradesh.
The Supreme Court had clarified that claims relating to delayed-possession interest and claims for compensation are separate statutory remedies under the RERA Act, each governed by different provisions and authorities.
Relying upon this principle, Punjab RERA concluded that the complainant’s claim was not maintainable before it in the form presented.
Complaint Held Not Maintainable
Since the complainant had:
- Accepted possession of the apartment,
- Executed the conveyance deed,
- Continued with the project instead of withdrawing,
Punjab RERA held that the complaint seeking compensation, interest, and litigation expenses under Section 18 could not be entertained.
Accordingly, the Authority dismissed the complaint.
Liberty Granted to Pursue Appropriate Legal Remedy
Although the complaint was dismissed, Punjab RERA granted liberty to both parties to pursue any other remedy available under law before the competent authority, if applicable.
The Authority did not decide upon the merits of any such future claim.
Important Takeaway for Homebuyers
The ruling highlights an important distinction under the RERA Act.
A homebuyer’s legal remedy largely depends upon whether the buyer:
- Withdraws from the project due to delay, or
- Continues with the project by accepting possession.
Before accepting possession in a delayed project, homebuyers should carefully understand the legal implications under Section 18 of RERA and seek professional legal advice wherever necessary.
The decision also reiterates the importance of relying on the appropriate statutory remedy available under the RERA framework rather than assuming that every delayed possession automatically results in compensation.
