The Real Estate (Regulation and Development) Act, 2016 (hereinafter called the Act) was enacted with an objective of standardizing business practices and transactions and bringing uniformity in the Real Estate sector, with a view to further consumer protection, and for the establishment of the Real Estate Regulatory Authority at the State Level. The Real Estate Regulatory Authority has been established for the function of registration of promoters and real estate agents, redressal of consumer grievances against builders, regulation of the conduct of real estate agents and for regulation of transactions related to Residential and Commercial Projects, which in turn ensures timely completion and handover of projects.

The Act provides multifarious remedies to an "allottee", which he can avail of by making a complaint to the authority under section 31 of the Act. These remedies are in the nature of refund of the amount invested, interest on delayed possession and compensation. Also, a penalty may be levied on a promoter/builder, as enumerated in Chapter VIII of the Act for contravention of mandatory provisions of Act.


Section 12 of the Act provides that where any person makes an advance or a deposit on the basis of the information contained in the advertisement or prospectus or on the basis of any model Apartment, plot or building and sustains any loss or damage because of such incorrect/false statement, he shall be compensated by the promoter in the manner as provided under the Act. However, if the person affected by such incorrect/false statement intends to withdraw from the proposed project, he shall be returned his entire investment along with the prescribed interest. Section 18 of the Act provides for refund of the amount received by a Promoter, in respect of an apartment, plot or building, should an allottee wish to withdraw from the project, alongwith the prescribed rate of interest and compensation as prescribed under the Act in case the promoter fails to complete or is unable to give possession in accordance with the terms of the Agreement for sale or duly completed by the date specified therein, or due to discontinuance of his business as a developer on account of suspension or revocation of the registration under the Act or for any other reason.


It is observed that in the cases decided by Haryana RERA at Gurugram, the Authority has refrained from allowing refund in cases where greater than 40% of the overall work on the project has been completed. The Authority has weighed in favour of interest of the Allottees who wish to continue in the project, and upholding that the cases of refund entail withdrawal of funds from the account kept for finishing the work on a project, has indeed allowed interest on delayed possession, thereby ruling in favour of finishing of work on the project. This is more so particularly in cases where multiple buyers wish to withdraw from the project.

In a recent case decided by the Haryana RERA Authority in Krishan Wats vs. CHD Developers Ltd. 1 , the Authority noted the report of the Local Commissioner regarding overall progress of the project at approximately 40- 45%. It was held that, "Keeping in view the interest of allottees and the completion of the project, the authority is of the view that rather than allowing the refund, the complainant is entitled to delayed possession charges." In Aman Sood vs. BPTP Ltd. 2 , the Haryana RERA Authority again appointed a Local Commissioner to report about the actual work competed on the project. Taking into consideration the physical completion of the project at 45%, refund was not allowed. In another case decided by the same Authority, Abhishek Agarwal and Ors. vs. Cosmos Infra Engineering India Pvt. Ltd. 3 , taking into consideration the report of the Local Commissioner, it was noted that the physical progress of the overall project was approximately 55-60 per cent, and the Authority refused to allow refund of the investment to the Allottee. It was opined by the Authority that allowing of refund of investment to the Alllottee would have an adverse overall impact in the completion of the project, and to the interest of other Allottees as well who wish to continue in the project. However, the Authority did order delayed possession charges at prescribed rate of interest i.e. 10.70% per annum for every month of delay, from the due date of possession till the handing over of possession. In another case


It is submitted that whether to allow compensation or not is a decision which the Authority/ Adjudicating officer should arrive at after applying judicial mind, considering the object of the Act in protecting the interest of genuine buyers, who are end users, coupled with the need to ensure that the buyers funds are not stuck up or committed to a project indefinitely. At the same time it is contended that the decision not to allow refund should be taken considering the totality of cases for refund, balancing with the probability of the project getting completed.


1. Krishan Wats vs. CHD Developers Ltd., Complaint No. 578 of 2019, MANU/ RR/0213/2019, decided on 30.05.2019.

2. Aman Sood vs. BPTP Ltd., Complaint No. 1194 of 2018, MANU/ RR/0323/2019, decided on 13.03.2019.

3. Abhishek Agarwal and Ors. vs. Cosmos Infra Engineering India Pvt. Ltd., Complaint No.1834 of 2018, MANU/RR/0165/2019, decided on 10.04.2019.

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