Refund and interest for delayed possession under RERA

Section 18 applies when a promoter fails to complete the project or is unable to give possession in accordance with the agreement for sale, by the date specified in it. It also applies where the promoter discontinues the business because the registration has been suspended or revoked, or for another reason.

The reference point is the possession date in the registered agreement for sale. Section 13(2) requires the agreement to state that date and the payment schedule. If the agreement is silent, that silence is itself a compliance problem, and the buyer should rely on the date in the allotment letter, the brochure and the correspondence.

Delay is a question of fact. The buyer should keep the agreement, every payment receipt, the promoter's construction updates, the demand letters and any communication about a revised date. A claim is stronger when the promised date and the payments can be shown from documents rather than from memory.

Under Section 18, a buyer who wishes to withdraw from the project is entitled to the amount paid, with interest and compensation. A buyer who does not wish to withdraw is entitled to interest for every month of delay until possession is handed over. The choice is the buyer's, and it should be made with the refund calculation in hand.

A refund claim ends the buyer's participation in the project. The claim should quantify the principal paid, the interest up to the expected date of payment, and the compensation sought. Rule 19 of the Tamil Nadu Rules requires the promoter to pay a refund with interest and compensation within ninety days from the date it becomes due.

A buyer who stays in the project keeps the booking and claims monthly interest. That route preserves the flat but leaves the buyer exposed to further delay. A buyer considering this option should record the delay in writing and should not sign a fresh agreement that waives the accrued interest without advice.

Rule 18 of the Tamil Nadu Rules fixes the rate at the State Bank of India's highest marginal cost of lending rate plus two per cent. The same rate applies to interest payable by the promoter to the allottee and by the allottee to the promoter.

The computation starts from the possession date in the agreement and runs to the date of payment or refund. Each payment made by the buyer should be listed with its date and amount, because interest is calculated on the amounts paid and the period for which they remained with the promoter.

Interest is not the same as compensation. Section 18 allows compensation in addition to interest, and the adjudicating officer decides whether the evidence supports it. A claim should separate the two heads and explain the loss claimed, such as rent paid while waiting for possession, without inflating either figure.

A claim for refund, interest or compensation under Section 18 is filed before the adjudicating officer appointed under Section 71. Section 31 allows an aggrieved person to complain to the Authority or the adjudicating officer for a violation of the Act or the rules. Rule 38 of the Tamil Nadu Rules prescribes Form N for compensation claims under Sections 12, 14, 18 and 19, with a fee of rupees five thousand.

The complaint should identify the project and its registration number, the agreement date and possession date, the amounts paid, the delay, the relief sought and the computation. The agreement for sale, payment receipts, bank statements, demand letters and the promoter's replies should be annexed.

The fee is paid online through the TNRERA portal. The portal's current instructions should be checked for hard-copy requirements before filing. Section 71(2) directs the adjudicating officer to dispose of the application within sixty days, though the actual time depends on the response and the complexity of the claim.

The adjudicating officer may direct a refund with interest and compensation, or interest for the period of delay, depending on the relief claimed and the evidence. The order should be read with the computation, because the amount and the date from which interest runs determine the next step.

An appeal lies to the Tamil Nadu Real Estate Appellate Tribunal under Section 43(5). Section 44 requires the appeal to be filed within sixty days from the date the order is received, and the Tribunal may condone delay for sufficient cause.

Where a promoter appeals, the appeal is not entertained unless the promoter deposits at least thirty per cent of the penalty, or the total amount payable to the allottee including interest and compensation, as the case may be. That deposit requirement is in the proviso to Section 43(5).

Section 79 bars a civil court from hearing a matter that the Authority, the adjudicating officer or the Appellate Tribunal is empowered to determine. In Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor, the Supreme Court held that Section 79 does not bar a consumer commission from hearing a homebuyer's complaint.

In Imperia Structures Ltd. v. Anil Patni, the Supreme Court recorded that the remedies under Section 18 are without prejudice to any other remedy available. A buyer can therefore choose the RERA route, the consumer forum or another statutory remedy, but the same loss should not be recovered twice.

The choice depends on the relief. A pure refund or interest claim fits the RERA adjudicating officer. A complaint about a deficient service or an unfair trade practice may fit the consumer commission. A buyer should take advice before filing in more than one forum.

The first step is a written demand to the promoter, setting out the possession date, the payments, the delay and the amount claimed. A clear demand often produces a settlement, and it creates a record if the claim is contested.

The second step is to collect the project registration details from the TNRERA website, confirm the promoter's registered address, and check whether the project registration has been extended. The third is to compute the claim month by month and keep the working sheet with the complaint.

A buyer who wants a refund should take advice before accepting possession or signing a settlement. Accepting possession can be treated as a decision to stay in the project, and a settlement may release the promoter from the accrued claim. The choice between refund and interest is easier to protect before that step than after it.