Plot Booking Cancelled-Set Aside by RERA Punjab

# RERA Grants Relief to Homebuyer: Builder Cannot Cancel Plot Booking for Delay Caused by Its Own Default

## RERA Directs Builder to Hand Over Plot and Pay Interest for Delay

In a significant ruling protecting the rights of homebuyers, the Punjab Real Estate Regulatory Authority (RERA) has granted relief to a woman purchaser by setting aside the builder’s decision to cancel her plot booking. The Authority held that the cancellation was not legally sustainable and directed the developer to deliver possession of the plot after obtaining the necessary approvals.

Apart from restoring the allotment, RERA also directed the builder to pay interest at the rate of **10.80% per annum** for the delay in handing over possession.

## Background of the Dispute

According to the reported case, the homebuyer booked a **150-square-yard plot in New Chandigarh** in January 2021. She initially paid the booking amount and subsequently deposited nearly **₹20 lakh** towards the total sale consideration.

The total cost of the plot, including applicable charges, was approximately **₹46 lakh**.

As per the Builder-Buyer Agreement, possession of the plot was to be handed over by **30 June 2021**, with an additional grace period extending the deadline to **30 September 2021**.

Despite the expiry of the contractual period, possession was not offered.

## Builder Cancelled the Booking

The purchaser repeatedly approached the developer through emails, written communications and legal notices seeking possession of the plot.

However, instead of delivering possession, the builder cancelled the allotment in March 2024 and refunded approximately **₹24.28 lakh**.

The developer attempted to justify the cancellation by referring to alleged defaults on the buyer’s part and also cited circumstances such as the COVID-19 pandemic, financial difficulties and changes in government policies that affected the project timeline.

## RERA’s Findings

After examining the records, Punjab RERA observed that the builder had failed to hand over possession within the agreed period.

The Authority rejected the builder’s justification for cancelling the allotment and held that the purchaser could not be deprived of her rights merely because she had raised grievances regarding the delay.

RERA directed the developer to:

– Restore the plot allotment.
– Obtain the necessary Occupation/Completion Certificate before offering possession.
– Deliver possession in accordance with the original agreement.
– Pay interest at **10.80% per annum** on the amount of approximately **₹20 lakh** deposited by the purchaser for the delayed period.

Since the builder had already refunded part of the deposited amount, RERA directed payment of the applicable interest for the period of delay.

## Legal Significance of the Decision

The order reiterates an important principle under the Real Estate (Regulation and Development) Act, 2016—that a developer cannot arbitrarily cancel an allotment when the delay in possession is attributable to the developer itself.

Homebuyers are entitled to receive either:

– Timely possession of the property; or
– Compensation or interest for delay, as provided under the Act and the terms of the agreement.

Builders are expected to honour their contractual commitments and cannot avoid liability through unilateral cancellation of allotments where buyers are not at fault.

## What This Means for Homebuyers

This decision serves as a reminder that homebuyers have enforceable rights under RERA. Where possession is delayed without lawful justification, purchasers may seek relief before the appropriate RERA Authority, including:

– Restoration of cancelled allotments.
– Delivery of possession.
– Interest for delayed possession.
– Compensation in appropriate cases.
– Other directions necessary to protect consumer interests.

## Conclusion

Punjab RERA’s decision reinforces the objective of the Real Estate (Regulation and Development) Act, 2016—to ensure transparency, accountability and fairness in the real estate sector. Developers are expected to comply with their contractual obligations, and arbitrary cancellation of allotments after substantial payments have been made is unlikely to withstand judicial scrutiny.

**Disclaimer:** This article is intended solely for educational and informational purposes. It is based on publicly reported information and should not be construed as legal advice. The outcome of every case depends upon its own facts and applicable law.