Karnataka Tribunal sets aside KRERA order, grants relief to senior citizen after 12-year delay in villa possession
Karnataka Tribunal sets aside KRERA order, directs real estate developer to hand over villa to senior citizen and pay 9% annual interest
The Karnataka RERA Tribunal (KREAT) has directed Bengaluru-based realtor Sterling Developers to hand over a luxury villa to a 75-year-old buyer after a 12-year delay. Setting aside an earlier Karnataka RERA order, the Tribunal directed Sterling Urban Developers Pvt Ltd to provide physical possession of the villa and pay interest at 9% per annum for each month of delay for five years.
"The order dated May 2023, passed by the Karnataka Real Estate Regulatory Authority, is hereby set aside. Sterling Urban Developers Private Limited is directed to hand over the physical possession of the Villa bearing No C-96 to the allottee within one month," the order said.
The Tribunal further ordered the developer to pay delay period interest at the rate of 9% per annum for every month delay in handing over possession of the villa till April 2017 under Section 8 of the Karnataka Ownership Flats (Regulation, Sale, Management and Transfer), Act, 1972.
The case
The case involved a buyer, Devki Nandan, who had been waiting since 2012 to take possession of the villa, for which she paid over ₹3 crore. The Tribunal also directed the real estate developer to pay delay interest at a rate of 9% per annum for each month of delay until April 2017, as per Section 8 of the Karnataka Ownership Flats (Regulation, Sale, Management, and Transfer) Act, 1972.
Nandan entered into an agreement with the developer on September 6, 2012, to purchase a villa for ₹3.2 crore, with possession promised by December 2013. However, despite registering the absolute sale deed in January 2014, the developer failed to deliver physical possession.
According to the Tribunal's order, Nandan repeatedly emailed the developer from 2014 to 2019, requesting possession of the villa.
When the developer failed to comply despite multiple requests, Nandan filed a complaint with KRERA, seeking an order to hand over possession. However, in May 2023, KRERA dismissed the case, citing that the project had received a partial occupancy certificate (OC) in January 2017—prior to the implementation of the RERA Act, 2016.
Also Read: Karnataka has over 2630 delayed real estate projects: KRERA
Homebuyer's appeal
Nandan argued that when the RERA Act came into effect, the development work was still incomplete, and necessary approvals were missing. In fact, the developer admitted that only two-thirds of the project was completed, and the partial occupancy certificate was issued on August 10, 2017—after the Act had already come into force, she pointed out.
"As per the findings recorded by KRERA, the project was completed in March 2017 and the developer applied for a partial occupancy certificate in January 2017 itself reveals that the developer had applied for partial OC before completion of the developmental works," the order said.
The developer refuted the buyer’s claims, arguing that the project in question involved a villa, making certain conditions outlined in the ‘User Manual’ inapplicable to this case. The developer also stated that they had applied for the Completion Certificate on time, but the Bangalore Development Authority took five months to inspect the property and issue the certificate. Furthermore, the developer argued that the judgments cited by the buyer pertained to high-rise buildings, making those findings irrelevant to the present case, and therefore sought dismissal of the appeal.
The Tribunal observed that the buyer's lawyer argued that the OC presented by the promoter was partial and could not be deemed a declaration of project completion, as established by the Karnataka High Court in the case of Ozone Urbana Infra Developers Pvt. Ltd. vs. RERA (MANU/KA/0415/2024).
The order said that KRERA, in its earlier decisions relating to other allottees, had taken the view that the partial OC is not a valid document certifying the completion of the project. “Hence, the findings given by KRERA in the case are contrary to its own stand," it said.
In this case, the Tribunal noted that in 2022, KRERA dispatched an engineering team to inspect the property, and the resulting report identified dampness in the ceiling that required repair.
"One more thing for consideration is that the developer accepting the ground reality that the project is an ongoing project, got it registered before KRERA. And the fact was taken note of by the Authority and referred to the same at para no 2 of the order," the Tribunal pointed out.
The said provision makes it clear that, even if the project work was not completed as and when the Act and Rules came into force, it is obligatory on the part of the developer to register his project before RERA, KREAT said.
"Now the Appellant is aged about 75 years. He, being a senior citizen, paid hard-earned money of ₹3.2 crore. Ignoring the factual aspect of the matter, KRERA has dismissed the complaint in a fanciful manner, holding that the provisions of the RERA Act is not applicable to the case on hand," the Tribunal said. Looking from any angle, we did not find any legal force in the order passed by the Authority," KREAT said in its order.
Hence, the order is liable to be set aside with a direction to the developer to hand over the physical possession of the villa, it said.
HT.com has sent a list of queries to the real estate developer. The copy will be updated if a response is received.
