RERA can grant interest on delay in possession, rules tribunal

CHANDIGARH: Settling the question of law over the jurisdiction of the Real Estate Regulatory Authority (RERA) vis-à-vis the adjudicating officer, the Haryana Real Estate Appellate Tribunal (HREAT) has ruled that RERA can award interest in case of delay in possession of a dwelling unit.

Bhartesh Singh Thakur

Tribune News Service

Chandigarh, August 12

Settling the question of law over the jurisdiction of the Real Estate Regulatory Authority (RERA) vis-à-vis the adjudicating officer, the Haryana Real Estate Appellate Tribunal (HREAT) has ruled that RERA can award interest in case of delay in possession of a dwelling unit.

Dismissing 95 applications of builders, the tribunal has ruled that RERA is “competent to deal with the complaints where the claim is only for grant of interest simplicitor due to delay in delivery of possession”.

It added, “There is prima facie no express or implied prohibition to the Authority (RERA) to entertain such matters.”

The builders had moved the HREAT for waiving the condition of pre-deposit, which is at least 30 per cent of total penalty, mandatory for an appeal required to be heard. They contended that it was only the adjudicating officer and not the authority (RERA) who could entertain and adjudicate upon the complaints wherein the relief for refund, compensation along with interest or even the interest for delayed possession was claimed. In some of the appeals, the builders had also submitted that they would face undue hardships as they were facing a financial crunch.

The adjudicating officer is either a serving or retired district judge or the additional district judge in RERA.

“The interest is a premium paid for the use of money. Ordinarily, a person who is deprived of his money to which he is legitimately entitled to as of right is entitled to interest for the period his money is used by the other person... So, the interest provided in Section 18 (1) (of RERA Act) is a interest simplicitor which is available to an allottee who does not intend to withdraw from the project as a return for his money used by the promoter for causing delay in the delivery of the possession,” said an order of HREAT chairman Justice Darshan Singh (retd), judicial member Inderjeet Mehta and technical member Anil Kumar Gupta.

On the jurisdiction of RERA, the order said, “There cannot be two separate forums , i.e., one for regulating the development of real estate project and another forum to award interest for delayed possession, as both these aspects are closely interlinked and interwoven.”

The HREAT clarified that the adjudicating officer can only intervene in cases where the claim was for refund and compensation along with interest.