Tamil Nadu RERA Holds Casa Grande Builders Liable For Collecting Late Fee From Homebuyer, Directs Refund With Interest
Tamil Nadu Real Estate Regulatory Authority (“Authority”) bench comprising Dr. L. Subramanian (Member) and M. Krishnamoorthy (Member) held, Casa Grande Homes liable for wrongfully charging late fee from Homebuyer despite timely payments. Authority directed the Builder to refund the charged late fee along with interest and litigation costs to the...
Tamil Nadu Real Estate Regulatory Authority (“Authority”) bench comprising Dr. L. Subramanian (Member) and M. Krishnamoorthy (Member) held, Casa Grande Homes liable for wrongfully charging late fee from Homebuyer despite timely payments.
Authority directed the Builder to refund the charged late fee along with interest and litigation costs to the Homebuyer.
Background Facts
Homebuyer (Complainant) purchased a Flat in the Builder's (Respondent) project named “ECR 14” located in Kancheepuram District. The decision to buy the flat came after seeing the Builder advertisements. Project had obtained all necessary approvals including technical clearance, building permission, environmental clearance and registration with TNRERA.
The Homebuyer's son paid an advance of Rs. 1,00,000 in December 2017, following which the Builder issued an allotment letter. The flat had a carpet area of 1170 sq. ft. with one covered parking. The total price was fixed at Rs. 79,40,000, excluding GST, registration and corpus fund.
In April 2018, the Homebuyer, acting under Power of Attorney from her son entered into a construction and sale agreement with the Builder. The Builder assured possession by December 2019. The construction cost was Rs. 71,94,110 and the undivided share of land was valued at Rs. 7,45,890.
The agreements and sale deed were later executed in October 2021. By then, the Homebuyer had paid Rs. 89,42,621, which included all charges. The Builder also collected Rs. 86,698 as late fee although the Homebuyer had made payments on time.
Therefore, being aggrieved by the late fee charged by builder, Homebuyer filed complaint before the authority seeking refund of the late fee.
Contentions of Builder
Builder contended that a No Due Certificate had already been issued on 9 November 2021 yet the Homebuyer approached the Authority after nearly seventeen months, making the complaint an afterthought. Builder further contended that the delay charges and interest were payable by the Homebuyer as per the terms of the agreement.
Observation and Direction by Authority
Authority noted that almost all payments fixed by the Builder were made by the Homebuyer on time except for a few minor delays of one or two days. For instance, the calculation sheet shows that Rs. 39,58,090 was paid on 4 June 2018 but it was recorded as 5 June 2018 and split into two amounts to show a delay. This representation was found to be incorrect.
Authority observed that other payments shown as delayed were also misrepresented. Even though the Homebuyer had made payments on earlier dates, the Builder recorded them later to claim delays. Therefore, the Authority held that the Builder was not entitled to charge any interest on the alleged delayed payments.
Authority further observed that the Builder was not entitled to demand or collect any interest on the alleged delayed payments and found that the Rs. 86,698 charged as delay fee was wrongfully collected, making the Homebuyer entitled to a refund with interest.
Therefore, the Authority directed the Builder to refund Rs. 86,698 to the Homebuyer along with interest at the rate of 10.70% per annum and to pay Rs. 25,000 as litigation costs.
Case – Bhuvana Ramkumar Versus M/s. Casa Grande Homes Pvt. Ltd.
Citation - RCP No. 86 of 2023