Tue. Sep 26th, 2023
    Karnataka Real Estate Regulatory Authority Rules in Favor of Homebuyer in Compensation Case

    The Karnataka Real Estate Regulatory Authority (KRERA) recently ruled in favor of a homebuyer in Bengaluru, stating that buyers have the right to demand compensation for construction delays, regardless of the reasons behind the construction halt. The case in question involved the Alexandria project in Uttarahalli, where the local municipal authority halted construction after a collapse of a wall in the adjacent building in 2017.

    In its order, KRERA instructed the developer, Menorah Realities, to pay Rs 83.04 lakh in interest for the delay period at an annual rate of 9% and to deliver the property within 60 days. The homebuyer, Supriya Shetty, had paid Rs 1.35 crore to reserve an apartment in the project with a scheduled delivery date of June 2016. Shetty approached KRERA seeking completion of the project, compensation for delays, and monetary losses.

    The developer, however, denied all allegations and claimed that the project was never halted. According to them, the collapse of the adjacent building’s wall was caused by heavy rain, leading the local municipality to temporarily suspend the construction license. The developer claimed to have sent multiple reminders to lift the construction ban.

    On the other hand, Shetty argued that she had requested a minor modification in the kitchen, which had not been addressed, and that the project was halted without any communication from the developer. When work resumed, the modification still had not been made, but the developer demanded additional payment for it.

    KRERA stated that the project had not been delivered to the buyer within the agreed-upon timeframe, and the revised delivery date was December 2019. The project obtained a no-objection certificate from the Karnataka Fire Department in 2019 and applied for an occupancy certificate in 2021, which is still pending. KRERA referred to a Supreme Court ruling stating that if the developer fails to provide possession within the stipulated timeframe, the buyer has the right to seek a refund with interest.

    This KRERA ruling emphasizes the importance of protecting homebuyers’ rights and ensuring that developers meet agreed-upon deadlines for project completion. Homebuyers have every right to expect compensation for construction delays that are beyond their control. This judgment sets a precedent and provides a framework for addressing similar cases in the real estate sector.


    – Karnataka Real Estate Regulatory Authority (KRERA): A regulatory body in Karnataka, India, responsible for regulating and promoting the real estate sector and protecting homebuyers’ rights.
    – Construction delays: Delays in completing construction projects beyond the agreed timeframe, which can be caused by various factors such as legal disputes, financial constraints, or unforeseen circumstances.


    – Supreme Court ruling in the case of Newtech Promoters and Developers Pvt Ltd vs. the government of Uttar Pradesh in 2021.
    – Order of the Karnataka Real Estate Regulatory Authority (KRERA) dated September 11, 2021.