Builder blamed Covid. K-RERA said: pay the full refund anyway.

He paid for a flat. The builder didn't deliver. K-RERA just told him how much he gets back.

Anupkumar Shetty did what any home buyer would do. He picked a flat — B-1401, 14th Floor, Tower-B in the 'Ozone Polestar' project in Bangalore. He paid. He waited. The builder, M/s. Ozone Realtors Private Limited, promised possession by June 2020. Then December 2020, with a grace period. Then nothing. Shetty had a buyback agreement guaranteeing profits, which he tried to invoke in December 2019. The developer didn't honour it. He sent a cancellation request in March 2020. The developer blamed Covid-19. Shetty went to the Karnataka Real Estate Regulatory Authority (K-RERA), Bench 6, seeking a full refund with interest. The stakes: his money, plus a housing loan from IHFL, plus years of waiting.

The story of a flat that never came

Shetty booked the flat in the 'Ozone Polestar' project, registered with K-RERA under registration number PRM/KA/RERA/1251/309/PR/171015/000386. He signed an agreement for sale, a construction agreement, a tripartite agreement with IHFL for the loan, and a buyback agreement with the developer. The developer was supposed to hand over the flat by June 2020. The agreement had a grace period extending to December 2020. The developer didn't deliver. Even the RERA-extended deadline of 31/12/2021 came and went.

Shetty had a buyback option. He tried to invoke it in December 2019. The developer didn't respond. In March 2020, Shetty sent a cancellation request. The developer blamed the Covid-19 pandemic for the delays. Shetty wasn't buying it. He approached K-RERA under Section 31 of the Real Estate (Regulation and Development) Act, 2016, seeking a full refund of the amounts he had paid, with interest.

What each side argued

Shetty's case was straightforward. He had paid through a combination of personal funds and the housing loan from IHFL. He had documentary proof — bank statements, receipts, the tripartite agreement. The developer had failed to deliver possession by the agreed date. Under Section 18(1) of RERA, he had an unqualified right to withdraw from the project and claim a refund with interest. He wanted his money back.

The developer, M/s. Ozone Realtors Private Limited, had a different story. They blamed the Covid-19 pandemic for the delays. They also disputed Shetty's calculation of the amount due. They produced their own calculation sheet, which they claimed showed a lower refund amount. They argued that Shetty had already received some refunds, which should be deducted.

The witness rule the Supreme Court applied

The K-RERA Bench, presided over by Smt. Neelmani N Raju, didn't have to reinvent the wheel. The Supreme Court had already settled the law in two key cases.

In M/s Newtech Promoters v. The State of Uttar Pradesh (Civil Appeal No. 6750-57/2021), the Supreme Court held that Section 18(1) of RERA gives allottees an unqualified right to seek refund with interest if the promoter fails to complete or give possession as per the agreement, or discontinues business, or has registration suspended or revoked. The right is not conditional on anything else.

In M/s Imperia Structures Limited v. Anil Patni & Another (Civil Appeal No. 3581-3590 of 2020), the Supreme Court reinforced that if a promoter fails to give possession by the agreed date, the allottee has an unqualified right to withdraw and obtain refund with interest. The allottee can proceed either under the main provision of Section 18(1) (withdrawal plus refund) or the proviso (interest for delay without withdrawal).

The K-RERA Bench followed both precedents. Shetty's right to withdraw and claim a refund was unqualified. The developer's failure to deliver possession by June 2020 (or even by December 2020, or by the RERA-extended deadline of 31/12/2021) triggered that right. The Covid-19 defence didn't change that.

Why the developer's calculation sheet didn't work

The developer tried to argue that Shetty's calculation was wrong. They produced their own calculation sheet. But the Bench looked at the documents. Shetty's memo of calculation was supported by bank statements, receipts, and the tripartite agreement. The developer's calculation, on the other hand, failed to account for the PEMI payments (pre-EMI payments) that Shetty had made under the tripartite agreement with IHFL. The developer also claimed that Shetty had received some refunds, but couldn't substantiate that claim with proper proof.

The Bench accepted Shetty's calculation. The developer's counter-calculation was rejected.

THE PLAY: If you are an allottee whose builder has failed to deliver possession, your right to a refund under Section 18(1) of RERA is unqualified. Keep your bank statements, receipts, and the tripartite agreement handy. The Authority will accept your calculation if it is supported by documentary proof, and will reject the builder's calculation if it fails to account for contractual obligations like PEMI payments.

The order: what the developer must pay

The K-RERA Bench allowed the complaint. The developer was directed to pay a refund with interest. The interest was calculated as follows: 9% per annum from 29/04/2017 to 30/04/2017, and MCLR+2% per annum from 01/05/2017 to 05/02/2023. The developer must pay this amount within 60 days. Interest from 06/02/2023 until the final payment is to be calculated at the same rate. If the developer fails to comply, Shetty is at liberty to initiate recovery proceedings. No costs were awarded.

What this means for home buyers and developers

For home buyers, this judgment is a reminder that RERA is not toothless. If your builder fails to deliver possession by the agreed date, you have an unqualified right to withdraw and claim a refund with interest. You don't need to prove anything else. The builder's Covid-19 defence may not save them if the delay is beyond the agreed timeline. Keep your documents — bank statements, receipts, the tripartite agreement — because the Authority will rely on them to calculate the refund.

For developers, this judgment is a warning. The agreement of sale is a key instrument that binds parties in a contractual relation. It must be free from ambiguity and vagueness for proper enforcement. If you fail to deliver possession, you cannot hide behind a disputed calculation sheet. The Authority will scrutinise your numbers, and if they don't add up, you will pay the allottee's documented claim.

The bottom line: If you are a home buyer whose builder has failed to deliver possession, file a complaint under Section 18(1) of RERA — your right to a refund with interest is unqualified, and the Authority will enforce it.