Bengaluru homebuyer to get Rs 70 lakh from builder due to three year delay in possession; Know how RERA law helped him win the case

The biggest mistake a homebuyer in Bengaluru made was trusting a builder and taking out a home loan from a financial institution to pay the full purchase price of Rs 51 lakh for buying a house apartment near Bengaluru International Airport. But even after three years past the promised date of possession, the builder still hadn’t completed the construction and eventually, its license for development also expired.

The original deadline to give possession of the house was in 2021, and as of 2024, the construction was still not over. Feeling cheated, the aggrieved homebuyer from Bengaluru exercised his legal rights under Section 18 of the RERA (Real Estate (Regulation and Development) Act, 2016) and filed a case against the builder in Karnataka RERA tribunal.

On July 1, 2025, this homebuyer won the case in the Karnataka RERA tribunal. The Karnataka RERA ordered the builder to issue a full refund of Rs 51 lakh that the homebuyer paid for the house plus Rs 19 lakh in interest, all within 60 days. So, the builder will end up giving Rs 70 lakh in total to the homebuyer.

The reason this homebuyer came out on top is due to the reasoning from two Supreme Court judgements that Karnataka RERA applied to this case. According to the Supreme Court, when a builder defaults, homebuyers have legal rights under either Section 18 or its proviso or Section 18(1). In the present case, the Bengaluru homebuyer opted for Section 18.

The Supreme Court said that the proviso to Section 18 (1) of the RERA Act contemplates a situation where the homebuyer does not intend to withdraw from the project. In such instances, he/she is entitled to and must be paid interest for every month of delay until possession is handed over.

The Supreme Court said that according to the Section 18 of the RERA Act, if a promoter (builder) fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter (builder) would be liable, on demand, to return the amount received for that apartment if the allottee (homebuyer) wishes to withdraw from the project.

Also read: Arrest warrant issued against builder who failed to pay compensation to property buyer on time, Haryana RERA order

Check out the details below to know how this homebuyer won the case in the Karnataka RERA and what other legal arguments the RERA tribunal used to rule in favour of the homebuyer.

How did this case start?

According to the order of the Karnataka RERA dated July 1, 2025, here is the timeline of events:

• September 5, 2018: The homebuyer entered into an agreement of sale for purchase of a house apartment in the builder’s project (OZONE URBANA PRIME) near Kempegowda International Airport Bengaluru. The homebuyer paid Rs 51 lakh (51,39,093) to the builder after taking a home loan.
• June 1, 2021: The builder (M/s.Ozone Infra Developers Pvt Ltd. ) missed the project completion deadline and thus the homebuyer did not get possession of the house apartment.
• 2024: The homebuyer filed a complaint against the builder in Karnataka RERA.

Also read: Bengaluru Homebuyer gets Rs 7.12 lakh compensation for delaying possession under RERA; Know your rights under RERA

What did Karnataka RERA say?

The Karnataka RERA said:

• It is undisputed fact that the respondent has failed to hand over possession of the flat to the complainants (homebuyers) as per the timeline prescribed in the agreement of sale and tripartite agreement. The Respondent (builder) has not produced any documentary proof to show the status of the project as on date and filed only written submissions and the same is taken on record.
• As per the agreement of sale, having accepted and acknowledged the substantial amount towards sale consideration and failure to keep up promise to handover possession of the flat, certainly entitles the complainants herein for refund with interest as per Section 18 of the RERA Act.
• The RERA Authority perused the documents produced by the complainants (homebuyers). The agreement of sale is a key instrument which binds the parties in all contractual situations so as to be properly enforced in accordance with law and hence, it is necessary that it shall be free from ambiguity and vagueness. Here, in this case, the respondents have not complied with the terms of the said agreement for sale.
• The complainants have produced proof of payments and bank statements evidencing that complainants have paid the advance sale consideration after availing loan from the financial institution and are entitled to get their amount paid along with interest as per the memo of calculation submitted by the complainants.

Also read: Father wins near Bengaluru ancestral property dispute against children after 31-year legal fight; landmark judgement to have wider impact
Karnataka RERA final judgement read: “Respondents (builder) are directed to refund a sum of Rs 70,33,424 to the complainants (homebuyers) towards refund with interest as per the calculation submitted by the Complainants, within 60 days from the date of this order, calculated from 01.05.2017 till 26.06.2025. The interest due from 27.05.2025 up to the date of final payment will be calculated likewise and paid to the complainants.”

Legal reasonings used by Karnataka RERA to decide this case

The Karnataka RERA applied two Supreme Court legal precedents to decide this case.

Supreme Court case 1: Appeal No.6750- 97/2021, M/S Newtech Promoters v/s The State Of Uttar Pradesh

Section 18 of the RERA Act spells out the consequences if the promoter fails to complete or is unable to give possession of an apartment, plot or building either in terms of the agreement for sale or to complete the project by the date specified therein or on account & discontinuance of his business as a developer either on account of suspension or revocation of the registration under the Act or any other reason, the allottee/home buyer holds an unqualified right to seek refund of the amount with interest at such rate as may be prescribed in this behalf.

Supreme Court case 2: Civil Appeal No.3581-3590 of 2020 between M/s. Imperia structures Lid., V/s. Anil Patni and another

• “In terms of section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the project.
• Such right of an allottee is specifically made “without prejudice to any other remedy available to him”. The right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest such rate as may be prescribed.
• The proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession.
• It is up to the allottee to proceed either under Section 18(1) or under proviso to Section 18(1). The case of Himanshu Giri came under the latter category.
• The RERA Act thus definitely provides a remedy to an allottee who wishes to withdraw from the project or claim return on his investment.”

What should home buyers note from this judgement?

ET Wealth Online reached out to many experts to find out what this judgement could mean for homebuyers. Here’s what they had to say:

Sameer Tapia, Founder & Senior Partner, ALMT Legal, says: The case's significance lies in reinforcing RERA's core purpose of protecting homebuyers by providing clear, enforceable remedies against project delays.

• The reliance on Supreme Court precedents promotes judicial consistency across RERA tribunals, enhancing confidence in the legal recourse available. The order explicitly details the refund amount, specifies interest calculation from May 1, 2017, until June 26, 2025, and mandates ongoing calculation until final payment.
• Furthermore, it allows complainants to initiate recovery actions if the order is not complied with within 60 days. Other RERA tribunals across India consistently apply similar principles, demonstrating a national trend where authorities like MahaRERA and UP-RERA routinely order refunds with interest for delayed possession.
• This uniform approach ensures promoter accountability and establishes the consistent remedy of either a refund or interest for project delays.
• This K-RERA order is a significant precedent, empowering homebuyers and holding builders accountable, consistent with broader RERA jurisprudence. This K-RERA order is a significant precedent, empowering homebuyers and holding builders accountable, consistent with broader RERA jurisprudence.

Avikshit Moral, Partner, S&R Associates, says: This order has reiterated the unqualified right of a homebuyer to seek refund of the amount paid by him together with interest if the promoter fails to handover possession of the unit within the date specified. The order directs the promoter to refund the money that was received from the complainant, along with interest that was computed from the time the first payment was received until the money was actually refunded. Following the Supreme Court's ruling in M/s. Newtech Promoters, in cases of delay, similar orders have been issued by all tribunals, directing promoters to return the full amount they were paid plus interest.

Subrata Mukherjee, Partner, SNG & Partners, Advocates & Solicitors, says: The Precedent & Significance of this judgement are:

• The agreement of sale is a key instrument that binds the parties in all contractual relations and is enforceable. Any non-compliance shall make the promoter liable for such breach of obligations, including refund of the amount with interest and compensation.
• Allottee has a fundamental right to claim possession upon completion of the project as specified in the agreement to sell. Section 18(1)(a)undefined or due to discontinuance of his business as a developer on account of suspension or revocation of the registration under the Act or for any other reason, further, if the allottee wishes to withdraw from the project, he can claim return of amount and compensation and promoter shall be liable on demand to return the amount under section 18 (1) of the Act.
• Further, where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.
• The rights provided to the allottees under section 18(1) are unconditional, absolute and without any prejudice to any other remedy available to them against the promoter as is reiterated by the decision of Hon’ble Supreme Court in Civil Appeal No(s) 6750-57/2021 (M/s Newtech Promoters and Developers Ltd V/s The State of Uttar Pradesh & Ors) and Civil Appeal No. 3581-3590 of 2020 (M/s Imperia Structures Ltd V/s Anil Patni and Anr).

Therefore, right of the allottee to seek refund is not dependent on any contingencies or stipulations thereof, making this right unqualified. Similar reliefs by RERA in other states:

• Under similar circumstances, the Maharashtra RERA has allowed the allottee to withdraw from the project and seek refund (Punit Kinariwala Vs Ekta Parksville Homes Pvt Ltd COMPLAINT NO. CC006000000110668/ 2023).
• Similarly, Haryana RERA has also considered Section 18 (1) of the Act while passing an order directing refund of amount with interest for delay in possession in Premit Chand Jain vs Puri Constructions Pvt Ltd Complaint No 251/2020)

Pushkraj S. Deshpande, Associate Partner, ALMT Legal, says: This K-RERA order significantly reinforces homebuyer rights under Section 18 of the RERA Act, 2016, establishing key precedents.

• The order establishes significant precedents for homebuyers and builders. It affirms the allottee's unqualified right to a full refund with interest if the builder fails to deliver possession or if the project stalls, clarifying this right as being "without prejudice to any other remedy available".
• The judgment underscores the strict adherence required for sale agreement timelines; non-compliance directly results in refund liability. K-RERA also proceeded ex-parte against the promoter due to their failure to file objections, accepting the complainants' refund calculation.
• This decision is robustly supported by pivotal Supreme Court decisions, including M/S Newtech Promoters v/s The State Of Uttar Pradesh and M/s. Imperia Structures Ltd. V/s. Anil Patni and another, which validate the allottee's unqualified right to a refund with interest under Section 18(1) of RERA Act, 2016.

Advocate Rajeev K Jha, Founder & Director, Sarve Permits & Legal Advisory, says: The following conclusions can be drawn from this judgement:

Entitlement to Relief (Issue 1)

• Breach of Agreement: The agreement of sale, a binding contract, obligated the respondent to deliver the apartment by June 1, 2021. The respondent's failure to adhere to this timeline, coupled with the lack of project updates or possession, constitutes a clear breach of contract.
• Section 18 of RERA: Section 18(1) of the RERA Act provides homebuyers an unqualified right to seek a refund with interest if the promoter fails to deliver possession as per the agreement or due to project discontinuance, license revocation, or other reasons. The Supreme Court rulings in M/S Newtech Promoters v. State of Uttar Pradesh (Appeal No. 6750-57/2021) and M/s. Imperia Structures Ltd. v. Anil Patni (Civil Appeal No. 3581-3590/2020) reinforced this right, emphasizing that homebuyers can opt for a refund with interest or interest for delayed possession, without prejudice to other remedies.
• Evidence and Ex Parte Ruling: The complainants provided undisputed evidence of payment (Rs. 51,39,093/-) and the agreement terms. The respondent's failure to file objections or provide project status updates led to an ex parte decision, with the complainants' memo of calculation accepted for consideration.

Relief Granted (Issue 2)

• Refund and Interest: The Authority ordered a refund of Rs. 70,33,424/-, comprising the principal amount (Rs. 51,28,677/-) and interest (Rs. 19,04,747/-) calculated up to June 26, 2025, as per the complainants' memo. Additional interest from May 27, 2025, until final payment was also mandated.
• Legal Basis: The refund aligns with Section 18(1), which mandates promoters to return the amount received with prescribed interest if they fail to deliver. The interest calculation reflects the financial burden on the complainants, who availed a loan, and compensates for the delay.
• Enforcement: The Authority permitted the complainants to pursue recovery action if the respondent fails to comply within 60 days, ensuring enforceability.

From a homebuyer's perspective, this judgment is a significant affirmation of RERA's protective framework:

• Empowerment through RERA: The ruling underscores RERA's role in safeguarding homebuyers' interests by ensuring promoters are held accountable for delays or defaults. The unqualified right to a refund with interest under Section 18(1) prioritizes financial redress for affected buyers.
• Precedent-Based Relief: The reliance on Supreme Court judgments strengthens the legal foundation, ensuring homebuyers can seek remedies without procedural hurdles, even when promoters fail to engage (as seen in the ex parte ruling).
• Financial Relief: The inclusion of interest compensates homebuyers for the opportunity cost and financial strain (e.g., loan interest) incurred due to the promoter's default, making the remedy meaningful.
• Timely Resolution: The 60-day refund deadline and provision for recovery action provide practical recourse, reducing prolonged uncertainty for homebuyers.