Interest Calculation on Delayed Possession: Haryana Tribunal Case - M/s Emaar MGF Land Limited vs. Mr. Ashok Nagpal

In a recent case heard by the Haryana Real Estate Appellate Tribunal, M/s Emaar MGF Land Limited, a prominent real estate company, filed an appeal against the order passed by the Haryana Real Estate Regulatory Authority. The case, numbered 101 of 2020, involved a dispute between M/s Emaar MGF Land Limited, the appellant, and Mr. Ashok Nagpal, the authorized signatory of M/s O.C Construction Private Limited, the respondent. The case revolved around the issue of delayed possession and payment of interest on the outstanding amount.

Background:

M/s Emaar MGF Land Limited had allotted a unit to Mr. Ashok Nagpal in their project called "Emerald Plaza" located in Sector 65, Golf Course Link Road, Gurugram, Haryana. The agreement between the parties was executed on December 24, 2010, with the due date of possession set as September 24, 2013. The unit's basic sale price amounted to Rs. 42,58,735 and Mr. Nagpal had paid Rs. 39,75,029 until June 2013.

Issues and Proceedings:

The respondent complained that despite a delay of five years, he received the offer of possession in January 2018 along with a demand for Rs. 21,07,753. He further claimed that the offer of possession did not mention any interest for the delayed delivery. Mr. Nagpal sent a legal notice to M/s Emaar MGF Land Limited requesting payment of interest, which they refused. Consequently, Mr. Nagpal filed a complaint with the Haryana Real Estate Regulatory Authority seeking interest for the delayed possession at the prescribed rate.

The appellant argued that the complaint should be decided by the Adjudicating Officer under Section 71 of the Real Estate (Regulation and Development) Act, 2016 (the Act), and not by the Haryana Real Estate Regulatory Authority. They also contended that M/s O.C Construction Private Limited was an investor and not a consumer, as they operated in the real estate business and had booked the unit for commercial purposes.

Decision and Directions:

The Haryana Real Estate Regulatory Authority, in its order dated January 16, 2019, directed the appellant to pay the delayed possession charges at a prescribed rate of 10.75% per annum for every month of delay, starting from the due date of possession (September 24, 2013) until the offer of possession (January 30, 2018). Additionally, the authority decided to take suo-moto cognizance against the appellant for not registering the project and directed the registration branch to initiate necessary action.

Appeal and Judgment:

M/s Emaar MGF Land Limited, the appellant, challenged the order of the Haryana Real Estate Regulatory Authority before the Haryana Real Estate Appellate Tribunal under Section 44(2) of the Act. The tribunal, comprising Shri Inderjeet Mehta (Member Judicial) and Shri Anil Kumar Gupta (Member Technical), heard the arguments put forth by both parties' counsels.

During the appeal, the appellant withdrew their technical contentions, citing a judgment of the Hon'ble Apex Court in the case of M/s New Tech Promoters and Developers Pvt. Ltd. v. State of UP & others 2021 SCC online SC 1044. Consequently, the only issue considered in the appeal was the calculation of interest on payments made by the respondent-allottee after the due date of possession.

The tribunal ruled that the interest on payments made by the respondent-allottee before the due date of possession would be calculated from September 24, 2013. However, the interest on payments made after the due date would be calculated from the respective dates of payment.

Conclusion:

In conclusion, the Haryana Real Estate Appellate Tribunal partially allowed the appeal filed by M/s Emaar MGF Land Limited. They directed the payment of interest to the respondent-allottee based on the aforementioned calculations. Furthermore, the tribunal ordered the appellant to deposit the pre-determined amount, along with the accrued interest, with the Haryana Real Estate Regulatory Authority for disbursement to the respondent-allottee. The excess amount, if any, would be returned to the appellant, subject to tax liability.

Note: The information provided in this article about Haryana Real Estate Regulatory Authority (HRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances. The information provided in this article is based on the Appeal No.101 of 2020 before the Haryana Real Estate Regulatory Authority

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