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Karnataka RERA holds real estate developer liable for delayed possession; orders builder to pay compensation to buyers
Karnataka RERA holds Bengaluru-based real estate developer liable for delayed possession; orders developer to pay ₹12.7 lakh in compensation to buyers
Karnataka Real Estate Regulatory Authority (KRERA) has ordered Bengaluru-based listed real estate developer Shriram Properties to pay ₹12.7 lakh in delayed compensation after the developer failed to inform the authority and the buyers about the project litigation at the time of project registration.
"Developer is directed to pay interest on the delay period from December 31 till the date of possession within two months. The total amount for the delay period should be ₹12.77 lakh," the order dated January 17 said.
In this case, the buyers had booked the project in Shriram Summit with a completion date of December 2019. The project received an Occupation Certificate in May 2022.
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The KRERA case
In this case, the project is located in north Bengaluru on a 15-acre plot of land and has 1, 2, and 3 BHK apartments. The KRERA document showed that the sale agreement was signed in November 2019, with a completion and possession date in December of the same year.
However, KRERA noted that the developer obtained the occupancy certificate from the local municipal body only in May 2022, almost two and a half years after the possession date.
The buyers, Sandeep Palekar and Amruta Jogalekar, had approached the regulatory body regarding the developer's delay in handing over the project.
Also Read: Karnataka real estate developers owe homebuyers around ₹667 crore in refunds for delayed projects
Developer claims delay due to force majeure
Arguing before KRERA, Shriram Properties said that the project had been delayed due to force majeure events.
A force majeure is an event or circumstance that prevents a developer from fulfilling their obligations under a contract.
Shriram Properties had contended before KRERA that the project had not been completed within stipulated time due to force majeure events such as excavation of rocks or such reasons beyond their control. It had contended that the project was close to a tertiary drain, and a suit before NGT caused stoppage of the works. In addition, the COVID-19 pandemic and the lockdown had also contributed significantly to the obstacles faced by it.
The company had sought to explain the delay by referring to these issues which were nothing but routine requirements of compliances and construction-related issues which are required to be handled by the promoter of any project who has undertaken to develop the real estate project, KRERA observed in its order.
A spokesperson for Shriram Properties responded by saying that there was a Supreme Court order prohibiting construction development across Bangalore. As such the approval process was delayed for the project. The Company cited this order as force majeure condition and asked for condonation of delay in delivery which was not accepted by KRERA.
It is clarified that the project got approval, the company said in its response.
KRERA was not made aware of NGT litigation
Refuting the developer's claims for delay, KRERA said that the developer had not informed the Authority about the case pending before NGT at the time of project registration and had not informed the buyers as well. "The company could have taken longer to complete the construction while registering the project. The onus of the developer is to keep the buyers informed at the time of registration of apartments and not to keep the customers in the dark," KRERA said
As for the pandemic, the authority noted that the possession of the apartment was slated in December 2019, while the pandemic commenced in 2020. Thus, the developer cannot consider the COVID-19 pandemic as one of the reasons for the delay.
