Q. I had booked a flat with a builder in December 2021 in an underconstruction project in Goregaon. In the agreement for sale, possession was promised by December 31, 2022. However, there was a delay of three years. The builder has now informed me that he has received the occupation certificate (OC) and offered possession. Since there is a delay of three years, I demanded interest on the total amount paid so far and asked him to adjust it against my last installment. The builder has refused, stating that since he has received the OC and offered possession, he is not obliged to pay interest. He further claims that my not demanding interest earlier amounts to waiver of my right. Is it necessary to claim interest before the OC is issued? Is there any time limit for filing a complaint under RERA? —– Vilas Kulkarni, Andheri (West)
A. This is a common misgiving propagated by some builders, and unfortunately, many homebuyers accept it as truth. Section 31 of RERA deals with filing complaints before the authority or the adjudicating officer. Section 31(1) states that any aggrieved person may file a complaint for any violation or contravention of the provisions of the Act, Rules or Regulations against a promoter, allottee or real estate agent. There is no time limit prescribed for filing such complaints.
Similarly, Section 18, which confers the right to refund and interest at the prescribed rate, does not stipulate any time limit for claiming interest or compensation. The wording of section 18 is clear that where there is a delay in handing over possession as per the agreement for sale and the allottee does not wish to withdraw from the project, the promoter shall pay interest for every month of delay until possession is handed over, at the prescribed rate.
This creates a statutory obligation on promoters to pay interest for delay. The promoter does not have to wait for the allottee to demand it. Failure to do so constitutes an offence punishable under section 61 of RERA. Promoters often claim that the delay occurred due to circumstances beyond their control. However, both the Bombay High Court and the Supreme Court have held that payment of interest for delay is a statutory right of the allottee and is not negotiable. In the case of Park Xpress JV through Shravan Agarwal vs Sagar Saboo, the Bombay High Court upheld the MahaRERA Appellate Tribunal’s observation that there is no bar under section 18 prohibiting an allottee from filing a claim for interest after issuance of the OC.
Justice Sandeep Marne further observed that it is in the interest of the allottee to first take possession before filing a complaint under Section 18. In your case, there is no waiver of interest in favour of the builder. You are entitled to insist on adjustment of the interest for the delayed period against the last instalment payable. If the builder refuses, you should file a complaint before MahaRERA seeking interest for the delayed period and also request imposition of a fine up to 5% of the total project cost under section 61 for violation of section 18.
(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)
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