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Initiating a Refund Complaint under the Real Estate (Regulation and Development) Act, 2016: A Simple




1.      Introduction

In real estate transactions, it's not uncommon for buyers to face a frustrating situation where property developers fail to deliver possession of purchased properties despite full payment. This can occur due to various reasons such as construction delays, legal complications, and registration issues. These buyers often find themselves burdened with loans they took to make these payments, left in financial distress with no property in sight.

The key question that arises in these situations is whether these buyers have any recourse to claim a refund of their invested money. This article aims to address this crucial question, providing guidance and insights on potential actions that buyers can take in such distressing circumstances in light of the Real Estate (Regulation and Development) Act (“RERA”) 2016. [1]  

2.      Understanding the Background of RERA

RERA 2016, aimed to enhance efficiency and transparency in the real estate sector while safeguarding the interests of homebuyers. Before its introduction, builders often delayed delivering properties to buyers, and existing dispute resolution mechanisms were slow. Section 18 of the RERA Act mandates that developers must promptly return the buyer's money and provide compensation in cases of possession delays or failure to meet other obligations outlined in the act and associated regulations.[2]

3.      Cases in which RERA allows complaints for refunds

3.1.   Promoter’s Inability to Deliver Possession

Section 18(1) of the RERA Act grants buyers certain rights, including the right to a full refund of their invested amount with interest and compensation, if the promoter:[3]

a.       Fails to provide possession as per the terms in the Agreement to Sell.

b.      Cannot complete the project within the specified timeframe in the agreement.

c.       Fails to provide possession due to discontinuation of their business, whether because of project revocation under this act or other reasons.

3.2.    Buyer’s Right to get Refund

The buyer's right to request a refund with interest is an unequivocal and absolute entitlement. This principle was solidified by the Hon’ble Supreme Court in the case of Imperia Structures Ltd. Vs. Anil Patni and Another.[4] The court ruled that Section 18 of the RERA Act grants an unconditional right to the allottee to receive a refund of the deposited amount, along with interest at the prescribed rate, if the promoter fails to complete the project or provide possession of the apartment as per the agreed-upon date in the home buyer's agreement.

Previously, authorities would often link refund decisions to the construction stage, hesitating to issue refund orders when the promoter had obtained an occupancy certificate or when construction was significantly advanced. However, it is now firmly established in law that the allottee's right to seek a refund is absolute. This right is independent of any contingencies or stipulations.

The Hon’ble Supreme Court reiterated this in the case of Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P.,[5] emphasizing that Section 18(1) represents an indefeasible right of the allottee to demand a return of the amount if the promoter fails to hand over possession as per the agreement or complete the project within the specified timeline. Any justifications the promoter may offer as a defense against the withdrawal of funds under the Act appear insignificant, as the regulatory authority can, through a summary scrutiny of undisputed facts, determine the refund of the deposited amount, along with the prescribed interest, as specified in the Act.

3.3.   Interest for Delay in Possession

Section 18(1) of the act also entitles the allottee to receive interest for every month of delay in possession by the promoter, even if there is no registered agreement to sell. A recent order from the Maharashtra Real Estate Appellate Tribunal on June 17, 2022, emphasized that the absence of a registered agreement does not justify denying interest relief for delayed possession under Section 18.[6] In such cases, any document like an allotment letter, brochure, template, or email communication indicating the possession date can be used to calculate the delay in possession.

3.4.   Buyer’s Right to get Compensation

In addition to cases of non-delivery of possession by the promoter as mentioned above, buyers can also seek compensation under Sections 18(2) and 18(3) of the RERA Act. The promoter becomes liable to pay compensation when:[7]

a.       The buyer suffers a loss due to a defective title of the land.

b.      The promoter fails to fulfill any obligations specified in the RERA Act or its associated Rules and Regulations.

c.       The promoter fails to adhere to the terms and conditions outlined in the Agreement to Sell.

The authority to determine compensation rests with the adjudicating officer, appointed by the Real Estate Regulatory Authority in consultation with the government. Buyers must file a separate application before the adjudicating officer, as the authority cannot make decisions regarding compensation.

The Hon’ble Supreme Court clarified the authority and powers of the Regulatory Authority and Adjudicating Officer for granting refunds and compensation. In the case of Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P,[8] the court emphasized that when it concerns matters like refund of the amount, interest on the refund, directing payment of interest for delayed possession, penalties, and interest on penalties, it is the regulatory authority that has the authority to assess and decide the resolution of a complaint. However, in cases related to seeking compensation and interest on compensation, the exclusive authority to determine lies with the adjudicating officer, as outlined in Section 71 read with Section 72 of the Act.[9]

While handling such compensation complaints, the adjudicating officer possesses the power to conduct inquiries, order compensation, and interest payments, if applicable. These complaints are mandated to be resolved within 60 days, and if not, the reasons for the delay must be recorded.

4.      A Caveat for the Buyers

Section 18 of the RERA 2016 ensures that buyers have an absolute and unqualified right to seek a refund of their life savings with interest, as calculated by the regulatory authority. Buyers have the option to file a complaint for either a refund with interest or compensation, providing them with effective protection for their interests. Many buyers have successfully reclaimed their hard-earned money and specified interest from promoters through these provisions.

However, it's important to note that RERA applies only to certain types of properties. Builders must register with RERA for residential or commercial projects on land exceeding 500 square meters or involving more than eight apartments, including all phases.[10] Projects falling outside these criteria do not enjoy the benefits of Section 18. Therefore, buyers are encouraged to purchase properties that meet the RERA criteria to avail themselves of the safeguards it offers. It's considered risky to invest in a property from a project not registered with RERA, especially if the project exceeds 500 square meters in area.

5.      Filing a Complaint under RERA

5.1.   Against Whom A Complaint Can Be Filed?

According to Section 31 of the RERA 2016, a buyer is empowered to file a complaint in the event of any violation by the following parties:[11]

a.       Builder

b.      Promoter

c.       Real estate agent

d.      Intermediary

e.       Contractor

Complaints can also be filed with an adjudicating officer. Those found guilty of such violations will be subject to penalties as stipulated in the RERA Act. The RERA Act allows for complaints to be filed either with the regulatory authority or the adjudicating officer under Section 31. If you're dissatisfied with a RERA order, you have the option to appeal it in the Appellate Tribunals of RERA.

The application for complaints is typically submitted using Form M[12] and Form N,[13] following a specific format. Once filed, a complaint is registered and resolved within 90 days.

It's worth noting that RERA is established on a state-by-state basis. To understand the process, let's use the example of UPRERA (Uttar Pradesh Real Estate Regulatory Authority) to learn how to register a complaint and demand a refund using their website.[14]

5.2.   A Step-by-Step Guide into the UP RERA website

Follow these steps to file a complaint with UP RERA:

a.       Log in to the UP RERA website.

b.      Click on "Complaints" in the top menu bar.

c.       Select "Register Complaint."

d.      Sign up using an email address or OTP. New users provide personal details like name, address, and password.

e.       After signing in, provide details such as personal information, type of complaint, and respondent details.

f.        To register a complaint, pay a fee of Rs 1,000 online.

g.      Upon payment, the authority generates a complaint number for tracking.

To check the complaint status, homebuyers can use various methods, including online, offline, or calling a helpline number.

UP RERA complaint status provides information such as:

a.       Next hearing date.

b.      Complaint and real estate agent details.

c.       Summary of the complaint, including any hearing summaries.

d.      Relief sought by the complainant (refund, possession, delay, etc.).

e.       Documents and payment receipts uploaded by the complainant (accessed through a registered mobile number and OTP).

f.        Notices issued by UP RERA.

g.      Judgments or orders issued by UP RERA.

5.3.   Checking the Complaint Status on UP RERA

Homebuyers have three options to check the status of their registered complaint, but it's essential to have a complaint number for all three methods:

a.       Visit the UP RERA office in either Lucknow or Gautam Buddha Nagar.

b.      Access the UP RERA website.

c.       Call the customer care number or send an email complaint to contactuprera@up-rera.in.

5.3.1.      Checking the Status Online

To check the status of a registered complaint with UP RERA online, homebuyers can use the following method, which is the most convenient and quick way to get updates. Follow these steps to check the UP RERA complaint status online:

a.       Visit the UP RERA official website.

b.      Navigate to the "Complaints" section.

c.       Click on the "Complaint Status" option.

d.      Provide the Complaint number along with the Captcha code.

e.       Click the "Submit" button.

f.        You will now be able to access the current status of your complaint with UP RERA.

g.      This online method allows homebuyers to promptly view the status of their complaint with UP RERA.

5.3.2.      Check the Status Offline

Homebuyers have the option to visit either the Lucknow or Gautam Buddha Nagar UP RERA office to inquire about the status of their complaint. Follow these steps for an in-person visit:

a.       Visit the specific RERA office branch in either Lucknow or Gautam Buddha Nagar.

b.      Upon arrival, approach the security guard and request directions to help desk cabin no. 10.

c.       Explain the purpose of your visit to the authorized personnel and provide your complaint number. If you don't have the complaint number, you can provide the complainant's full name, builder's name, and mobile number.

d.      The authorized person will use the provided information to check the status of your complaint, and you will receive the status update within a few minutes.

Alternatively, you can check your UP RERA complaint status by calling the helpline number at 0522-2202079:

a.       Call the helpline number and state the reason for your call, indicating your interest in checking the complaint status.

b.      Be prepared with your complaint number for a quicker response. If you don't have the complaint number, provide the authorized person with the complainant's name, builder's name, and mobile number.

c.       Once the necessary information is provided, the authorized person will provide you with the status of your complaint.

5.3.3.      Benefits of Checking The Complaint Status

Checking the complaint status on the UP RERA website offers several advantages for home buyers:

a.       Stay updated on the next hearing date, enabling home buyers to remain informed and engaged.

b.      Access a summary of the complaint.

c.       Review details regarding uploaded payment receipts.

d.      Verify if UP RERA has issued any notices.

e.       Obtain the final order or judgment from the UP RERA bench.

f.        Be aware of the time frame for complaint resolution, which is typically 60 days. However, this duration may be extended by the authority in exceptional circumstances.

5.4.   Submitting a Compensation Complaint on the UP RERA Complaint Portal

Here's a brief step-by-step guide on filing a compensation complaint on the UP RERA complaint portal:

a.       Visit the official UP RERA website.

b.      Navigate to the Complaint Section.

c.       Select "Complaint for Compensation" from the options.

d.      Log in with your email and password, or choose the OTP option.

e.       Pay the Rs 1,000 fee online to register your compensation complaint and receive a unique complaint number for tracking your case status.

6.      Practical Challenges That Come the Way of Buyers under RERA

Recovery Certificates (“RCs”), introduced by UP RERA to aid distressed homebuyers, face challenges in implementation, with only 5% of RCs issued in Noida since 2018 being successfully recovered by July 2023.[15] RCs are issued when buyers seek refunds due to project delays. While UP RERA issues RCs, their realization falls under district administrations. Out of 2,352 RCs issued worth Rs 875.6 crore, only 118 RCs worth Rs 98.6 crore have been recovered. Some RCs are settled through mutual agreements but go unreported.[16] Delays are attributed to cases in the National Company Law Tribunal and courts. Legal experts suggest enhancing RERA's authority, while critics argue RERA and district administrations inadvertently protect defaulting developers. In UP, nearly 8,800 RCs worth Rs 2,400 crore have been issued since 2018, with Rs 1,200 crore recovered.[17] Streamlined enforcement mechanisms are needed to ensure RCs effectively help homebuyers.[18] The builder-buyer agreement's terms and legality are crucial factors, especially if it's registered, as registered agreements are legally valid, even if they favor the seller.[19] Reading and amending the cancellation clause in the agreement is advisable if it's unfairly biased towards the seller.[20]

7.      Conclusion

When property buyers face delays and are left without their property or money, the RERA, notably Section 18, offers a quick solution. It provides refunds and compensation, preventing buyers from being stranded due to a builder's failure to deliver on time. It is crucial for homebuyers to assert their rights in these circumstances and effectively seek resolution through the provisions of RERA.


[2] Ibid, s 18.

[3] Real (n. 1), s 18(1).

[4] Imperia Structures Ltd. Vs. Anil Patni and Another, civil appeal no. 3581-3590 of 2020, <https://main.sci.gov.in/supremecourt/2019/9796/9796_2019_34_1502_24555_Judgement_02-Nov-2020.pdf>.

[5] Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P., civil appeal no(s). 6745 ­ 6749 OF 2021, <https://indiankanoon.org/doc/149094324/>.

[6] Mr. Jervis Anthony Creado and Ors. v. Aishwarya Light Construction Company, Appeal No. AT006000000052415, <https://maharera.mahaonline.gov.in/Upload/PDF/52415.pdf>.

[7] Real (n. 1), ss 18(2), 18(#).

[8] Newtech (n. 5).

[9] Real (n. 1), ss 71, 72.

[10] Real (n. 1), s 3(2).

[11] Real (n. 1), s 31.

[16] Ibid.

[17] Rera (n. 15).

[18] Rera (n. 15).

[19] ‘Denied Refund By Developer? Here’s The Legal Recourse Home Buyers Have’ (Outlook (26 September 2023) <https://www.outlookindia.com/business/denied-refund-by-developer-here-s-the-legal-recourse-home-buyers-have-news-195181>.

[20] Ibid.

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