Builder Directed to Pay 10.80% Annual Interest for Delay in Possession: Punjab RERA Ruling

In a significant relief for homebuyers, the Punjab Real Estate Regulatory Authority has ordered a builder to pay 10.80% annual interest to a buyer for failing to hand over possession of a residential unit within the agreed timeline.

The ruling reinforces the rights of buyers under the Real Estate (Regulation and Development) Act, 2016 (RERA) and sends a strong message against delays in housing projects.


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Background of the Case

The complaint was filed by a Delhi-based buyer who had booked a plot in a residential project located in Mohali. The buyer:

Booked the plot in December 2019

Executed an Agreement to Sell in January 2020

Paid the entire sale consideration amounting to approximately ₹25.87 lakh (including GST and other charges)


As per the agreement, possession was to be handed over by July 2, 2021. However, the builder failed to deliver possession within the stipulated time.

The buyer alleged that:

Development work was incomplete

No valid completion certificate had been issued

Possession was offered without fulfilling statutory requirements.

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Builder’s Defence

The builder contended that:

The project was registered under RERA on November 18, 2019

The scheduled completion date was October 24, 2024

The complaint was filed prematurely

Delays were partly attributable to payment issues


However, RERA observed that possession offered without obtaining a valid completion certificate cannot be treated as lawful possession under the Act.


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RERA’s Findings

The Authority emphasized that:

Buyers are entitled to timely possession as per the agreement.

Builders cannot unilaterally alter possession timelines.

Offering possession without mandatory approvals and completion certificate is legally unsustainable.


Accordingly, Punjab RERA directed the builder to:

Pay 10.80% annual interest on ₹25,87,868

Calculate interest from October 25, 2024, until the date of actual possession

Comply with the order within 90 days


The Authority further clarified that interest will continue until valid possession is handed over or two months after issuance of the completion certificate, whichever is earlier.

Failure to comply with the order may invite enforcement proceedings under Section 63 of the RERA Act.


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Legal Significance of the Ruling

This decision reiterates key principles under RERA:

1. Timely possession is a statutory obligation.


2. Completion certificate is mandatory before lawful possession.


3. Buyers are entitled to interest compensation for delays.


4. RERA has the power to impose monetary consequences for non-compliance.



The ruling strengthens consumer protection in real estate and highlights that developers cannot escape liability for project delays.


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Key Takeaway for Homebuyers

If possession of your flat or plot is delayed:

Check the possession date mentioned in your Agreement to Sell.

Verify whether the project has obtained a completion certificate.

File a complaint before the respective State RERA authority.


RERA provides a structured and time-bound mechanism for seeking relief, including interest compensation.


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Conclusion

The Punjab RERA order awarding 10.80% annual interest underscores that developers must adhere strictly to possession timelines and statutory requirements. For homebuyers facing delays, this ruling serves as a reminder that legal remedies are available and enforceable.


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