Punjab RERA orders Rs 25 lakh delay interest to homebuyers from booking date

In a significant ruling, the Punjab Real Estate Regulatory Authority (RERA) has directed a real estate promoter to pay approximately Rs 25 lakh as delay interest to homebuyers, holding that project timelines must be counted from the initial booking date rather than the execution of the sale agreement.

Case Background

The complainants, faculty members of Punjab Engineering College in Sector 12, had alleged facing delays in possession of their property. The case was argued by advocate M Shahnawaz Khan.

Key Findings

In a key finding, the authority held that where initial booking was made in 2018, the promoter could not defer liability by delaying execution of the agreement, which in this case was signed in December 2022 with a possession date of July 31, 2023.

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Relying on Supreme Court precedents, RERA ruled that the reasonable period for delivery of possession is capped at three years from the date of booking or advance payment, regardless of when the formal agreement is executed.

Compensation and Rejection of Builder's Plea

The authority quantified the delay interest payable to the complainants at approximately Rs 25 lakh as on the date of the order. It also rejected the builder's plea seeking extension on grounds of Covid-19, observing that force majeure provisions cannot be used as blanket protection where delays are attributable to the developer.

Counsel for the complainants said the order reinforces the principle that the rights of homebuyers flow from the date of booking and payment, and not merely from the execution of agreements.