Paid Rs 14.51 Lakh for Gurugram Home, Found No Construction Progress; HRERA Orders Refund With 10.80% Interest

Gurugram: A homebuyer who paid Rs 14.51 lakh for an affordable housing unit in Gurugram has secured an order for a full refund after the project's developer lost its registration and construction failed to make meaningful progress.

The Haryana Real Estate Regulatory Authority (HRERA) has directed the developer to refund Rs 14,51,866, along with interest at 10.80% per annum from the date of each payment until actual realisation. The authority has given the developer 90 days to comply with the order.

Buyer Booked 642 Sq Ft Unit in Sector 104

The homebuyer, an Allahabad-based man, had booked a 642 sq ft unit in an affordable housing project at Village Dhanwapur, Sector 104, Gurugram.

The total consideration for the property was around Rs 26 lakh. An allotment letter was issued to the buyer in December 2021, after he initially paid Rs 1,28,470 to the developer.

Over time, his total payments increased to Rs 14,51,866, representing more than half of the property's total consideration.

No Construction Progress at Project Site

According to the complaint, the buyer repeatedly contacted the developer regarding the status of the project. However, when he visited the construction site, he found that there had been little or no progress.

The buyer alleged that the developer was unable to provide a satisfactory explanation for the delay and was also unable to give a definite possession timeline.

Despite the lack of substantial construction progress, the developer reportedly sought further instalment payments from the buyer. He declined to make additional payments and instead requested a refund.

The refund was also delayed, with the developer reportedly asking him to wait for additional time before the money could be released.

Buyer Approaches Haryana RERA

After repeated attempts to obtain either possession or a refund, the buyer approached HRERA seeking relief.

He requested a complete refund of the amount paid, along with interest from the date of booking until repayment. He also sought Rs 2 lakh as compensation for financial loss, mental agony and harassment, besides Rs 1 lakh towards litigation costs.

What Did HRERA Find?

HRERA examined the project's regulatory status and found that the developer's registration certificate had been revoked.

The authority noted that possession of the unit was supposed to be offered within four years from the approval of the building plans dated October 25, 2021, or from the environmental clearance dated April 27, 2022, whichever was later.

That calculation put the possession date at April 27, 2026. However, HRERA observed that even though the possession deadline had not technically lapsed at the relevant stage, the promoter was unable to deliver the property in accordance with the terms of the agreement.

The authority further noted that because the project's registration had been revoked, the developer could no longer carry on the project as registered. Given the serious violations and the status of construction, HRERA concluded that there was no realistic possibility of completing the project within the required timeframe.

RERA Section 18 Protects Homebuyers

The case also highlights the importance of Section 18 of the Real Estate (Regulation and Development) Act, 2016.

Under the provision, when a promoter fails to complete or is unable to give possession of a property, including because of suspension or revocation of the project's registration, an allottee who chooses to withdraw can seek the return of the amount paid, along with applicable interest and compensation.

In this case, HRERA relied on the regulatory framework to hold that the buyer was entitled to withdraw from the project and receive a refund with interest.

HRERA Orders Refund of Rs 14.51 Lakh With 10.80% Interest

In its final order, Haryana RERA directed the builder to refund the entire Rs 14,51,866 paid by the homebuyer.

The amount will carry 10.80% annual interest, calculated from the date of each individual payment until the money is actually returned.

The developer has been given 90 days to comply. HRERA warned that failure to follow the order could result in further legal consequences.

No Immediate Order on Rs 3 Lakh Compensation and Litigation Costs

While the homebuyer had sought Rs 2 lakh in compensation and Rs 1 lakh towards litigation expenses, HRERA did not decide these claims in the same proceeding.

The authority stated that claims relating to compensation and litigation costs fall within the jurisdiction of the Adjudicating Officer under Sections 71 and 72 of the RERA Act.

The buyer has therefore been given the option of approaching the Adjudicating Officer separately for those claims.

What Homebuyers Can Learn From the Case

The case highlights the importance of checking a project's RERA registration status, construction progress and regulatory compliance before making substantial payments.

For buyers already invested in a stalled project, the RERA framework provides mechanisms to seek refunds and other relief where a developer fails to complete the project or loses the ability to legally continue the development.

The Gurugram order also demonstrates that cancellation or revocation of a project's registration can have significant consequences for the developer when existing allottees seek to exit and recover their money.

For the homebuyer in this case, the HRERA order provides a route to recover the Rs 14.51 lakh already paid, together with substantial interest, after the project failed to progress and the developer's registration was revoked.