Introduction

The case of Terinderjit Kaur and Harsimran Kaur v. Sukhm Infrastructure Pvt. Ltd., through its director Sh. Tejinder Singh Bhatia before the Real Estate Regulatory Authority (RERA), Punjab, serves as a pivotal judgment in the realm of real estate development and consumer rights. Filed on August 2, 2020, and adjudicated on July 28, 2021, the case consolidated nine complaints from various complainants who alleged significant delays in the handover of plots in the Integrated IT Township 'Yellowstone Landmark Infocity', developed by respondents Sukhm Infrastructure Pvt. Ltd. and Aeropolis Infrastructure Pvt. Ltd.

Summary of the Judgment

The RERA Punjab adjudicated on multiple complaints wherein complainants had invested substantial sums for plots in the 'Yellowstone Landmark Infocity' project. The central issue revolved around the prolonged delay in handing over possession of these plots, which were initially scheduled within 18 months of the Buyer's Agreement, with a possible extension of another six months. However, despite payments spread over several years, possession was not delivered, leading to consumer grievances.

The Authority acknowledged the government's withdrawal of certain Industrial Policy 2003 benefits, which adversely impacted the project's financial viability and contributed to delays. Notably, the High Court of Punjab and Haryana had previously recognized these delays, attributing them to governmental hurdles rather than the promoters' inefficiency.

Ultimately, RERA Punjab refrained from mandating immediate possession, considering the extended deadlines granted by the High Court and State Consumer Disputes Redressal Commission. Instead, it mandated the respondents to compensate the complainants with interest for the delays beyond the extended possession date, calculating interest at a composite rate of 9.30% per annum from the specified due dates until actual possession is handed over.

Analysis

Precedents Cited

The judgment heavily referenced prior rulings that established governmental delays as causative factors for project hold-ups. Specifically:

• Civil Writ Petition No.5213 of 2015: This High Court of Punjab and Haryana decision acknowledged delays caused by the Punjab Urban Development Authority (PUDA) and GMADA, recommending an extension in the project completion timeline.
• State Consumer Disputes Redressal Commission Rulings: Five other complaints (GC Nos. CC/279/2017, CC/281/2017, CC/282/2017, CC/283/2017, and CC/285/2017) concluded that infrastructural and administrative delays were responsible for the project's stagnation, thereby legitimizing the promoters' claims of external impediments.

These precedents underscored the judiciary's stance on attributing delays to administrative inaction rather than the developers' lack of diligence, thereby providing a framework for RERA Punjab’s decision to grant a grace period before imposing financial penalties.

Legal Reasoning

The Authority employed a structured legal reasoning process, balancing the complainants' rights with the respondents' circumstances. Key aspects include:

• Assessment of Delay: Determined that the possession had been delayed beyond the extended deadline of February 10, 2016, allowing the consideration of compensation for the period of delay.
• Interest Calculation: Established an interest rate of 9.30% p.a., derived from the current rate of 7.30% plus an additional 2% as per the State Bank of India's Highest Marginal Cost of Lending Rate.
• Exemption of Certain Respondents: Found no cause of action against respondents M/s Manohar Singh & Co. and M/s Acme Builders Pvt. Ltd., leading to the dismissal of those complaints.
• Future Possession Direction: Refrained from directing immediate possession, acknowledging that the respondents still had until December 31, 2021, and March 27, 2022, respectively, to complete the project.

Impact

This judgment sets a significant precedent in the interpretation and enforcement of RERA provisions concerning delayed possession. The key impacts include:

• Enhanced Consumer Protection: Reinforces the entitlement of buyers to financial compensation in the form of interest for delays beyond stipulated grace periods.
• Developer Accountability: Encourages developers to adhere to project timelines and underscores the consequences of failing to do so, fostering greater accountability.
• Judicial Consistency: Aligns RERA Punjab’s decisions with higher judicial authorities, ensuring a cohesive legal approach towards real estate disputes.
• Financial Implications for Developers: Financial penalties in the form of accrued interest could impact developers' cash flows, incentivizing timely project completion.

Complex Concepts Simplified

The judgment employs several legal terminologies and concepts that may be intricate for laypersons. Here are simplified explanations:

• RERA (Real Estate Regulatory Authority): A statutory body established to regulate the real estate sector, ensuring transparency and protecting consumers' interests.
• Possession Date: The agreed-upon date by which the developer should transfer ownership and hand over the property to the buyer.
• Interest Rate Calculation: A method to determine the additional amount payable by the developer for delaying possession, calculated based on prevailing financial rates.
• Completion Certificate: An official document issued once a construction project is completed, signifying compliance with all building codes and regulations.
• Cause of Action: A set of facts sufficient to justify a right to sue, meaning no valid legal claim exists against certain respondents in this case.

Conclusion

The RERA Punjab judgment in Terinderjit Kaur and Harsimran Kaur v. Sukhm Infrastructure Pvt. Ltd. is a landmark decision reinforcing the rights of property buyers against delayed project completions. By mandating the payment of accrued interest, the Authority not only compensates for financial losses due to delays but also sends a clear message to developers about the importance of adhering to contractual obligations. This judgment enhances consumer confidence in the regulatory framework governing real estate transactions and sets a robust precedent for future cases involving delays and developer accountability.