RERA impact: Homebuyer to get Rs 65 lakh compensation for delay of over 9 years in possession of a flat in Gurgaon

Time of India

23-05-2025

A homebuyer's struggle for justice due to over 9 years delay in possession of a home ended when
Haryana RERA
ordered a defaulting builder to pay more than Rs 65 lakh as interest for this delay. This homebuyer paid around Rs 62 lakh for this home in 2013 and it was supposed to be handed over by December 7, 2015. However, the buyer is yet to get the possession of the home. The reasons for such a long delay as told by the builder's lawyers to
Haryana RERA
were: Covid-19, environmental authority's chairman's untimely death in a road accident, economic meltdown, lack of sufficient water in NCR region, etc. None of the reasons were found to be acceptable for such a long delay by Haryana RERA.
Another interesting fact about this case is that this homebuyer, instead of cancelling the home booking and taking back his money, he decided to fight under Section 18 of
Real Estate (Regulation and Development) Act, 2016 (RERA)
. Section 18 is used when a homebuyer does not withdraw from the housing project but rather asks for compensation for delayed possession.
Haryana
RERA
after its investigation of the case's facts used Rule 15 to determine how much compensation the builder should pay to this homebuyer for this 9-year delay in possession. Rule 15 of RERA rules say the interest compensation should be State Bank of India (SBI) highest MCLR rate plus 2%. Hence Haryana RERA issued a judgement on March, 19, 2025 ordering the builder to pay 11.01% interest to the homebuyer from 2015 till the date he gives possession of the house.
Read below to know how this homebuyer won the fight against the builder and how the legal reasoning used in this judgement can help homebuyers fighting similar cases.
How did this fight start?
According to the judgement of Haryana RERA dated March 19, 2025, here are the details:
Live Events
June 6, 2012: Builder received sanctions for the building plans from the local government.
June 17, 2013: The builder issued an allotment letter to the homebuyer for buying a unit of a house in
Gurgaon
, Haryana measuring 1,990 square feet at a rate of Rs 2,700 per square feet.
June 25, 2013: The builder-buyer agreement was executed and the basic sale price excluding TDS was fixed at Rs 53.73 lakh. The due date of possession was December 7, 2015. The homebuyer in good faith paid Rs 62.79 lakh which includes the basic sale price and TDS.
March 13, 2023: Homebuyer filed a case against the builder with Haryana RERA after failing to get possession of the house for 9 years.
Builder said Covid-19, chairman's death, non-availability of sufficient water, etc prevented him from delivering the home in 2015
The builder's lawyers said before Haryana RERA:
Chairman's death:
The builder had applied for environment clearance on October 20, 2011. However, the decision and issuance of certificate remained in abeyance for a long time due to the sudden demise of the chairman of environmental impact assessment (EIA) committee in an unfortunate road accident. The builder finally got the environmental clearance on June 17, 2013.
Government caused delay in approval:
The builder had applied for the revision in building plans of the said housing project. However, for no fault of the builder, the plans were approved by the department only after a delay of 2 years.
Economic meltdown and Covid-19:
As a matter of fact, economic meltdown, financial crisis, delay in granted sanctions and approvals from the concerned government departments, sluggishness in real estate sector, multiple disputes between the workforce, labour and contractors resulting in shortage of labour and workforce and change in contractors, non-availability of sufficient water for construction due to the restrictions imposed by local administration, restricted construction activities towards protection of environment as directed by the local administration and the NGT and moreover, obstruction of construction due to Covid-19 outbreak….
Haryana RERA rejects Covid-19 as a reason for delay in possession of a house that was supposed to be offered in 2015
Haryana RERA in its judgement dated March 19, 2025 said:
The builder have raised the contention that the construction of the tower has been delayed due to force majeure circumstances such as shortage of labour force in the NCR region, delay on part of govt. Authorities in granting approvals, major spread of Covid-19 across the world, etc. However, all the pleas advanced in this regard are devoid of merit.
First of all, the possession of the housing unit in question was to be offered by December 7, 2015. Moreover, time taken in governmental clearances cannot be attributed as a reason for delay in the housing project.
Furthermore some of the events mentioned by the builder are routine in nature happening annually and the builder is required to take the same into consideration while launching the project. Thus the builder cannot be given any leniency on the basis of the aforesaid reasons and it is a well settled principle that a person cannot take benefit of his own wrong.
Haryana RERA final judgement
Haryana RERA ordered the builder to pay 11.01% interest to the homebuyer from December 7, 2015 till the offer of possession plus two months.
The builder is directed to pay interest to the homebuyer against the paid-up amount at the prescribed rate i.e. 11.1% p.a. For every month of delay from the due date of possession i.e. December 7, 2015 till offer of possession plus two months or actual handing over of possession, whichever is earlier, as per Section 18 (1) of the Act of 2016 read with rule 15 of the rules;
The builder is further directed to pay a cost of Rs 20,000.
Calculation:
Paid up amount: Rs 62,79,109
Time period: December 7, 2015 till May 19, 2025 (assuming builder gave possession on March 19, 2025 when this judgement was announced)
Interest: 11.1%
Final amount:
11.1% of 6279109*9 years 5 months= Rs 65,63,237.79
What is the significance of this judgement for homebuyers?
Avnish Sharma, Partner at Khaitan & Co, says: 'The homebuyers prevailed in this matter because the promoter was found to be in clear violation of their statutory obligations under Section 11(4)(a) of the Real Estate (Regulation and Development) Act, 2016 ('RERA'), as well as the express terms of the builder-buyer agreement dated June 25, 2013.
Sharma shares some important legal precedents and regulatory principles that are reinforced by this Haryana RERA order:
● Reinforcement of builder obligations under Section 11(4)(a):
The ruling underscores that promoters are strictly bound by the timelines promised in builder-buyer agreements. Even if construction is delayed for reasons beyond their control, unless qualifying under the narrow definition of force majeure under RERA, they remain liable for non-compliance.
● Grace period must be contractually justified and limited:
Haryana RERA reaffirmed that while a 180-day grace period for obtaining occupancy certificates may be permissible (as supported by appellate precedent), this cannot be used as a tool for indefinite deferral of delivery timelines.
● Investor vs. Allottee distinction rejected:
The judgment sets a clear precedent that labels such as 'investor' cannot be invoked to deny RERA protections. If a person has been allotted a unit under an agreement for sale, they qualify as an 'allottee' under Section 2(d), regardless of the promoter's characterisation.
● Prohibition on one-sided contractual clauses:
Haryana RERA criticised the builder-buyer agreement for being heavily tilted in favour of the promoter, particularly noting how vague and discretionary clauses relating to possession dates rendered the contract inequitable. This aligns with judicial trends against one-sided agreements in real estate.
● Standardised rate of compensation and interest:
The decision reinforces the use of the SBI MCLR + 2% formula (11.10% at the time of judgment) as the uniform interest rate payable for both delay in possession and buyer default, ensuring parity and predictability.
● Cost and compliance directives:
The builder was not only held liable for monetary compensation but also directed to pay litigation costs and submit a corrected statement of account, which underscores the Authority's commitment to consumer-centric enforcement.
Sana Khan, Associate Partner, SNG & Partners, Advocates & Solicitors, says: The Haryana RERA rejected the force majeure reasons such as delay in receiving statutory permissions under environmental clearance and approval of revised plans cited by the Respondent Promoter as events of routine nature happening annually which are required to be taken into consideration by the Promoter while launching the project.
Khan says: 'The key legal takeaways from this judgement is that Haryana RERA granted redressal to the Complainant allottee under the provisions of RERA while keeping in mind the provisions of the Flat Buyers' Agreement entered into between the parties. It was held that if the allottee wishes to continue with the project, then he accepts the terms of the Agreement regarding the grace period stipulated therein. Reliance was placed on an Appellate Tribunal Order in Emaar MGF Land Limited vs. Babia Tiwari and Yogesh Tiwari.'
Frequently asked questions about possession of home
Sanjay Mandava, Founder and CEO, Landeed, answers some frequently asked questions about how homebuyers get possession of a home from a builder:
Q1. Are there clauses of auto extensions incorporated in the sale agreement itself? Does RERA permit the same?
Answer: Builders sometimes incorporate automatic extension clauses into sale agreements, allowing project timelines to extend under specified circumstances (like delayed approvals or shortages). RERA typically scrutinizes such clauses rigorously, demanding transparency, fairness, and explicit conditions under which these automatic extensions can be activated. Blanket or vaguely drafted auto-extension clauses designed to disproportionately benefit the builder are typically disallowed or amended by RERA.
Q2. What are situations or forces beyond one's control on which RERA has to forcibly give an extension?
RERA typically acknowledges genuine, uncontrollable scenarios like:
● Natural calamities (earthquakes, floods, cyclones).
● Significant regulatory changes or unexpected legal impediments (court orders halting construction).
● Lockdowns or restrictions due to pandemics, as in COVID-19.
However, situations like labour disputes, material shortages, economic slowdown, or poor planning typically do not qualify as force majeure events compelling mandatory extensions by RERA.
Q3. How long can builders keep opting for extensions without having to indemnify the homeowner?
Answer: Builders cannot indefinitely delay projects without consequences. Typically, agreements specify a fixed grace period, usually 6 months beyond the agreed delivery date. After this grace period, unless a legitimate and demonstrable force majeure event is proven, builders are obligated to compensate homeowners for delays. RERA authorities and courts emphasize that repeated or prolonged extensions without genuine justification violate homeowner rights and regulatory norms.