Introduction

The case of Balwant Sales Through its Partners v. Sukhm Infrastructure Pvt. Ltd., through its Director Sh. Tejinder Singh Bhatia was adjudicated by the Real Estate Regulatory Authority (RERA), Punjab on July 28, 2021. This case consolidated multiple complaints filed by various plot buyers against Sukhm Infrastructure Pvt. Ltd. and Aeropolis Infrastructure Pvt. Ltd. the developers of the Integrated IT Township 'Yellowstone Landmark Infocity' in Mohali.

The primary issue revolved around the significant delay in handing over possession of industrial plots despite the buyers having made substantial payments. The complainants sought directions for the handover of plots and compensation in the form of interest for the delay.

Summary of the Judgment

The RERA panel examined nine consolidated complaints related to plot allotment in the 'Yellowstone Landmark Infocity' project. The key findings and decisions are as follows:

• There was an inordinate delay in handing over possession of the plots to the complainants.
• The Buyer's Agreement stipulated possession within 18 months with an extension of 6 months, making the original due date February 10, 2016.
• The court recognized a grace period of two years due to regulatory delays caused by state government policy changes.
• Respondents were directed to pay interest at a rate of 9.30% per annum on the delayed possession period.
• The court dismissed complaints against Manohar Singh and Co. and Acme Builders Pvt. Ltd. due to lack of relevant cause of action.

Analysis

Precedents Cited

The judgment referenced previous rulings that acknowledged governmental policy changes impacting project timelines. Specifically:

• Civil Writ Petition No.5213 of 2015: Highlighted delays caused by PUDA/GMADA, directing an extension for project completion.
• Multiple cases (CC/279/2017 to CC/285/2017) by the State Consumer Disputes Redressal Commission, Chandigarh: Concluded that delays were due to governmental hurdles and sanctioned interest only up to the revised completion dates.

These precedents emphasized the accountability of developers in ensuring timely possession while recognizing external factors that may impede project timelines.

Legal Reasoning

The court applied the following legal principles and reasoning:

• Section 31 of the Real Estate (Regulation and Development) Act, 2016: Basis for the complaints regarding delayed possession.
• Section 18 of the Act: Alleged violation due to the delay in handing over possession.

The court acknowledged that while the developers faced challenges due to the withdrawal of government subsidies and resultant financial strain, the prolonged delay unjustly affected the plot buyers. By instituting a two-year grace period, the court balanced the developers' need for additional time against the buyers' right to timely possession.

However, since the extended deadline of March 27, 2022, had not yet lapsed, the court refrained from ordering immediate possession. Instead, it focused on compensating the buyers for the undue delay by mandating interest payments.

Impact

This judgment sets a significant precedent in the realm of real estate regulation by:

• Establishing a framework for compensatory interest in cases of delayed possession even when external factors contribute to the delay.
• Clarifying the limitations of RERA in mandating possession before the revised deadlines.
• Reaffirming the responsibility of developers to maintain transparency and financial solvency to honor commitments to buyers.

Future cases will likely reference this judgment when addressing similar issues of delayed possession, especially where governmental policies influence project timelines.

Complex Concepts Simplified

Real Estate (Regulation and Development) Act, 2016 (RERA)

RERA is legislation enacted to regulate the real estate sector, ensuring transparency, accountability, and protection of consumers' interests in real estate transactions.

Section 31 - Complaints Related to Delay in Possession

This section allows buyers to file complaints if developers fail to deliver possession of real estate within the stipulated timeframe.

Possession Date and Grace Period

The possession date is the deadline by which the developer agrees to hand over the property to the buyer. A grace period is an additional time granted to the developer beyond the original deadline due to unforeseen circumstances.

Accrued Interest

Interest compensation is financial remuneration awarded to buyers for the period during which possession was unduly delayed. It is calculated based on the amount paid and the duration of the delay.

Completion Certificate

A Completion Certificate is a document issued by local authorities certifying that the construction of a building has been completed and complies with all relevant regulations and laws.

Conclusion

The RERA Punjab's judgment in Balwant Sales Through its Partners v. Sukhm Infrastructure Pvt. Ltd. underscores the delicate balance courts must maintain between enforcing developers' obligations and acknowledging external factors that may impede project completion. By mandating interest payments for delayed possession, the court reinforces the importance of accountability and financial responsibility in real estate transactions. This decision serves as a protective measure for consumers, ensuring that their investments are safeguarded against undue delays, while also providing developers with a structured framework to address legitimate challenges affecting project timelines.

Overall, this judgment enhances consumer trust in the real estate sector by demonstrating RERA's commitment to upholding rights and ensuring fair dealings between buyers and developers.