Allahabad High Court fines builder Rs 2.5 lakh for ‘harassing’ homebuyer for 13 years

“The respondent, who is a lady, had spent huge money, time and effort on the litigation because of the appellant’s fault. It is a fit case, where exemplary cost could be imposed as the respondent…had been harassed for the last 13 years and had to run from pillar to post and also face multiple litigation, for no fault of her own,” the July 31 order read.

The dispute began after the woman purchased a flat in the builder’s project. According to the case records, she booked the flat in 2011 after the builder promised possession by June 2013. Despite paying Rs 35.9 lakh, she allegedly did not receive possession within the promised time. In July 2018, the Real Estate Regulatory Authority (RERA) directed the builder to hand over possession immediately and pay 24 per cent interest for the delay from June 30, 2013.

Justice Prashant Kumar rejected the builder’s argument that the flat’s possession had been handed over in 2017.

Builder’s challenge

The builder challenged the RERA order before the Uttar Pradesh Real Estate Appellate Tribunal (REAT), but its appeal was repeatedly dismissed for non-prosecution. Although one dismissal was recalled, the appeal was ultimately dismissed again on July 10, 2020. A restoration application filed over two years later was rejected by the tribunal, prompting the present appeal before the high court.

The counsel appearing for the builder argued that the buyer had not completed payment in 2013, with the final instalment having been paid only on July 8, 2017. It was argued that the woman was handed over possession of the flat on the same date and that the homebuyer later approached RERA without disclosing it.

The delay of over two years in seeking restoration of their plea was not deliberate and the tribunal had failed to properly consider the reasons given for the delay, it was submitted.

Inordinate delay: High court

The high court noted that the builder’s delay in filing the restoration application well after the limitation period had expired, and proper reasons weren’t listed in the plea seeking condonation of the delay.

It also rejected the builder’s contention that possession had been handed over in 2017, observing that the project still lacked an occupancy certificate. “In absence of occupancy certificate, possession of the flat cannot be handed over to the allottee,” it noted.

The court remarked that the very object and purpose of the Real Estate (Regulation and Development) Act, 2016, was frustrated by the builder through the “frivolous” and “vexatious” litigation, apparently to delay and evade the discharge of its legal obligations.

“After lapse of more than 13 years and receipt of almost the entire consideration amount, the builder has failed to complete the project and deliver possession of the flat to the respondent. Such inordinate delay, without any justifiable cause, has deprived the respondent of the fruits of her investment and subjected her to prolonged financial hardship and mental agony,” the order read.

Heavily slamming the builder’s conduct, the court observed that the homebuyer had been repeatedly trying to get relief since 2018 despite securing favourable orders. Holding that the litigation only intended to delay compliance, the court imposed Rs 2.5 lakh in costs, directing that the amount be paid to the homebuyer within four weeks.