Builder blamed pollution bans. The court said they're not force majeure.

Two Shots, One Project, and a 25-Month Delay: What Happened When a Gurugram Builder Told Homebuyers ‘Blame the Pollution Ban’

Puneet Khaneja bought a flat in Signature Global’s ‘The Millennia’ project in Sector 37D, Gurugram, in 2017. It was an affordable housing unit, launched under the Haryana Affordable Housing Policy 2013. He paid Rs. 24,32,184. The builder promised possession within four years of environmental clearance. That clearance came on 21 August 2017. The due date for handing over the keys was 21 August 2021. By the time the occupation certificate was finally obtained on 25 January 2023, and possession offered on 23 March 2023, Khaneja had waited over 25 months beyond the deadline. He wasn’t alone. Several other allottees in the same project filed complaints before the Haryana Real Estate Regulatory Authority, Gurugram. The stakes were simple: would a builder who blamed COVID-19, recurring construction bans, and pollution restrictions be allowed to escape paying delayed possession charges? And could the builder charge whatever it wanted for maintenance, or was the affordable housing policy the ceiling?

The Project That Was Supposed to Be Ready in Four Years

Signature Global India Private Limited launched ‘The Millennia’ in Sector 37D, Gurugram, under the Haryana Affordable Housing Policy 2013. The policy is clear: Clause 1(iv) mandates that all such projects “shall be required to be necessarily completed within 4 years from the approval of building plans or grant of environmental clearance, whichever is later.” The environmental clearance was granted on 21 August 2017. That meant the project should have been completed by 21 August 2021.

Puneet Khaneja was allotted unit T10-1608 through a draw of lots. He executed a buyer’s agreement on 3 January 2018. Over the next few years, he paid Rs. 24,32,184. The builder collected the money. The project did not finish on time.

On 26 May 2020, HARERA issued a notification extending the timeline by six months due to COVID-19. That pushed the due date to 21 February 2022. Even with that extension, the builder missed the mark by over a year.

What the Builder Argued — and Why It Didn’t Work

Signature Global did not deny the delay. Instead, it argued that the delay was caused by force majeure events: the COVID-19 pandemic, a construction ban imposed by the National Green Tribunal due to pollution, and other restrictions. The builder cited the case of M/s Laabh Buildwell vs Mr. Sanket Prabhakar Yadav, where the Maharashtra REAT had held that a promoter could not be held responsible for delays caused by a Bombay High Court order restraining occupancy certificates for about six months.

The builder’s logic was straightforward: if the courts or tribunals shut down construction, the builder shouldn’t pay for the lost time.

The Authority, however, was not persuaded. The Bench of Shri Ashok Sangwan examined the timeline. The NGT’s construction bans, the Authority noted, are annual or recurring events. They happen every winter when pollution spikes. A promoter who chooses to build in the National Capital Region knows this. The Bench observed that “short-duration recurring bans do not constitute force majeure entitling promoters to extension of time.” A builder cannot plan a project assuming the NGT will never ban construction. That is a known risk, not an unforeseeable event.

There was another problem. The Authority pointed out that if the builder had not relaxed payment schedules for allottees during the same construction ban period, its plea for relief appeared unjustified. This was an obiter observation, but a sharp one: reciprocity matters. If the builder kept collecting EMIs during the ban, it cannot turn around and say the ban should excuse its own delays.

The Due Date That Wouldn’t Budge

The Authority applied the Affordable Housing Policy 2013 strictly. The due date for possession was 21 August 2021. The six-month COVID extension took it to 21 February 2022. That was the date from which delayed possession charges would run.

The builder had obtained the occupation certificate on 25 January 2023 and offered possession on 23 March 2023. The Authority held that delayed possession charges were payable from 21 February 2022 till the actual handover of possession, or till the offer of possession plus two months — whichever was earlier. The two-month buffer was given to allottees to arrange logistics after receiving the offer.

The rate of interest was fixed under Rule 15 of the Haryana RERA Rules 2017: the State Bank of India’s highest marginal cost of lending rate plus 2%. At the time of the judgment, that came to 11.10% per annum.

The Symmetry Rule That Changed the Math

One of the most significant directions in this judgment concerns the rate of interest chargeable from allottees. Builders often charge a higher rate of interest from buyers who default on payments, while paying a lower rate for delayed possession. The Authority shut that down.

Section 2(za) of RERA 2016 defines “interest” as “the rates of interest payable by the promoter or the allottee, as the case may be.” The Bench read this to mean that the rate must be the same for both parties. If the promoter charges 11.10% from a defaulting allottee, the promoter must pay 11.10% to the allottee for delayed possession. No asymmetry. No fine print in the buyer’s agreement that tries to create a two-tier system.

The Authority directed that the COVID grace period would apply to both parties equally. If the builder got a six-month extension, the allottee also got a six-month grace period on payments.

THE PLAY: When drafting buyer’s agreements, ensure the interest rate for allottee default matches the prescribed rate under Rule 15. Any clause that charges a higher rate from the allottee than what the promoter pays for delay is unenforceable under Section 2(za).

The Maintenance Charge Trap — and How the Policy Closed It

The allottees also complained about maintenance charges. The builder was charging amounts that were not part of the buyer’s agreement. The Authority applied two precedents: Vineet Choubey v. Pareena Infrastructure Private Limited (HARERA Complaint No. 4147 of 2021) and Varun Gupta v. Emaar MGF Land Limited (HARERA Complaint No. 4031 of 2019). Both held that a promoter cannot charge anything that is not part of the buyer’s agreement, subject to the condition that the charges are in accordance with prevailing law.

But the Affordable Housing Policy 2013 added another layer. Clause 4(v) of the policy states that the coloniser must maintain the colony free of cost for five years from the date of the occupation certificate. That means no maintenance charges for five years. However, the DTCP clarified on 31 January 2024 that utility charges — electricity, water, property tax, and waste collection — can be charged on a consumption basis. The Authority directed the builder to follow this clarification. No flat maintenance fee. Only actual consumption charges for utilities.

The Bottom Line: What the Builder Must Do Now

The Authority disposed of the complaints with a series of directions under Section 37 of RERA 2016. Signature Global must pay delayed possession charges at 11.10% per annum from 21 February 2022 till actual handover or offer of possession plus two months. The arrears must be paid within 90 days. The interest rate chargeable from allottees for default must be the same 11.10%. The builder cannot charge anything outside the buyer’s agreement or the Affordable Housing Policy. Any excess charges already collected must be refunded. Maintenance and utility charges must be billed on consumption basis per the DTCP clarification.

For the advocates, CFOs, and founders reading this: the judgment is a reminder that affordable housing projects come with non-negotiable timelines and cost structures. A builder who opts into a government policy cannot later claim ignorance of its terms. Recurring construction bans are not force majeure. Interest rates must be symmetrical. And maintenance charges for affordable housing projects are free for five years — unless the DTCP says otherwise.

One actionable takeaway: If you are a homebuyer in an affordable housing project in Haryana, check whether your builder is charging maintenance within the first five years of the occupation certificate. If they are, file a complaint under Section 31 of RERA. The policy says it’s free.