Ms. Richa Verma vs. M/s. Sushma Buildtech Ltd. - The Hon'ble Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. (Civil Appeal Nos. 6745-6749 of 2021) has also upheld that amounts payable under Section 18 of the RERD Act, 2016 with interest may be recovered as arrears of Land Revenue under Section 40(1) of the Act. In view of this Bench of Authority, the promoter has failed to give possession by the extended date of 05.06.2022, the delay is established, and the complainant is entitled to interest for every month of delay at the rate prescribed by Rule 16 of the Rules,

 RERA Punjab (2026.11.02) in Ms. Richa Verma vs. M/s. Sushma Buildtech Ltd. [GC No. 0451/2024] held that; 

• The  Hon'ble Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of  U.P. (Civil Appeal Nos. 6745-6749 of 2021) has also upheld that amounts payable  under Section 18 of the RERD Act, 2016 with interest may be recovered as arrears of  Land Revenue under Section 40(1) of the Act. In view of this Bench of Authority, the  promoter has failed to give possession by the extended date of 05.06.2022, the delay is  established, and the complainant is entitled to interest for every month of delay at the  rate prescribed by Rule 16 of the Rules, 

Excerpts of the order;

# 1. The present complaint dated 24.12.2024 has been filed by Ms. Richa  Verma (hereinafter referred to as the complainant) under Section 31 of the Real Estate  (Regulation and Development) Act, 2016 (hereinafter referred to as the 'RERD Act,  2016') read with Rule 36 of the Punjab State Real Estate (Regulation and Development)  Rules, 2017 (hereinafter referred to as the Rules) against M/s Sushma Buildtech Ltd.  (respondent no. 1, hereinafter referred to as the promoter) and Kotak Mahindra Bank   Ltd. (respondent no. 2, hereinafter referred to as the bank), in respect of Residential Unit  No. K-804, 3 BHK, Tower K, in the project Sushma Crescent, situated at Kishanpura,  Sub Tehsil Zirakpur, Tehsil Derabassi, District SAS Nagar (Mohali), registered with this  Authority under registration no. PBRERA-SAS79-PR0084. 

 

# 2. The complainant alleges that she applied for the unit on 30.11.2020 and  that an Allotment Letter and a Buyer's Agreement (Agreement for Sale) were executed  on 05.12.2020 under Customer ID No. SC-0894. The carpet area of the unit is stated to  be 979.922 sq. ft. (91.037 sq. mtr.). The total price is stated to be Rs.62,66,274/-, of  which the basic sale price is Rs.55,52,300/-. For ready reference, schedule C of the  agreement for sell is attached as under:- 

2.1 She further alleges that she has paid Rs.52,85,794/- including GST as per  the construction linked plan, and that she availed a home loan of Rs.44,40,000/- from  the bank vide letter dated 22.01.2021, out of which Rs.36,00,000/- was disbursed to the  promoter. It is alleged that, as per Clause 7 of the Agreement for Sale, possession was  to be delivered on 05.12.2021; that possession has not been delivered; that the  Occupancy Certificate/Completion Certificate (OC/CC) has not been obtained; that  neither interest for delay nor compensation has been paid; and that her repeated visits  and e-mails have not yielded any result. The complainant prays that the respondents  be directed to pay interest for delayed possession under Sections 18 and 19 of the Act  as per the Rules on Rs.52,85,794/- till the date of offer of legal possession after obtaining  the OC/CC. 

 

# 3. Respondent no. 1 filed its reply dated 17.06.2025. It objects that the  complaint is liable to be dismissed for want of jurisdiction, without specifying the ground  in detail, and denies the allegations of misrepresentation and fraud. It admits that the  complainant applied on 30.11.2020, that the unit (stated to be on the 8th floor, super  area 1590 sq. ft.) was allotted vide Allotment Letter dated 05.12.2020 (Annexure R-1)  at a basic sale price of Rs.55,52,300/- excluding taxes and other charges, and that an  Agreement for Sale dated 05.12.2020 was executed, as per which possession was to  be delivered on 05.12.2021 subject to delays caused by force majeure conditions. It  contends that the delay was caused by the COVID-19 pandemic, a force majeure event,  and relies upon the advisory of the Ministry of Housing and Urban Affairs dated  13.05.2020, the circular of the Maharashtra Real Estate Regulatory Authority dated  18.05.2020, decisions of the State Consumer Disputes Redressal Commissions  (Ramesh Kumar v. Omaxe and Raman Kumar v. Omaxe), the decision of the NCDRC  in Kishor V. Patil v. Marvel Zeta Developers, and the judgments of the Hon'ble Supreme  Court in Dhanrajmal Govindram v. Shyamji Kalidas (AIR 1961 SC 1285) and Ireo Grace  Realtech Pvt. Ltd. v. Abhishek Khanna ((2021) 3 SCC 241). It further contends that the  Hon'ble Supreme Court, in Fortune Infrastructure v. Trevor D'Lima (Civil Appeal Nos.  3533-3534 of 2017, decided on 12.03.2018), held three years from the date of the  agreement to be a reasonable period, so that, with the force majeure period, the  reasonable timeframe aligns with the period within which possession was offered; that  this Authority has extended the registration of the project (Annexure R-8); and that the  roject is still being developed. 

3.1. Respondent no. 1 further pleads that, on expiry of the possession due  date, the parties executed a Settlement Agreement dated 16.09.2022 whereby the  complainant was adequately compensated for the delay, and that the complainant has  received Rs.6,48,452/- as delay possession compensation by cheques, which were  encashed. A statement of accounts is relied upon. It is contended that the complainant  has not come with clean hands, that she is a defaulter, and that a Termination Letter  dated 04.02.2021 records a default of Rs.5,34,328/- and a Demand Letter dated  10.09.2024 records a continuing default of Rs.3,10,930/-. It also relies upon Maula Bux  v. Union of India ((1969) 2 SCC 554), Kunwar Chiranjit Singh v. Har Swarup (AIR 1926  PC 1) and Godrej Projects Development Ltd. v. Anil Karlekar (decided on 03.02.2025)  for the proposition that earnest money may be forfeited and no interest is payable on  the refundable balance where the buyer defaults. It prays for dismissal of the complaint  with punitive costs. 

# 4. Respondent no. 2 filed its reply (Diary No. 4186 dated 20.06.2025). It  submits that it has been wrongly impleaded, that the dispute is between the complainant  and the promoter, that it sanctioned a home loan of Rs.44,40,000/- vide Sanction Letter  dated 22.01.2021, of which Rs.36,00,000/- was disbursed directly to the promoter on  the instructions of the complainant and on the basis of the promoter's certificates of   construction progress, that it is neither a promoter nor an allottee within the meaning of  Sections 2(zk) and 2(d) of the Act, that it is not a signatory to the Agreement for Sale,  and that no relief is sought against it. It prays that the complaint be rejected qua  respondent no. 2. 

# 5. The complainant filed a rejoinder (served on 23.09.2025). It states that the  complaint is maintainable as the project is situated in Punjab and is registered with this  Authority; that the complainant is an allottee within Section 2(d) of the Act; that the  circular of this Authority dated 28.10.2020 extends force majeure relief to completion  dates and statutory compliances falling between 15.03.2020 and 15.09.2020, whereas  the Agreement for Sale was executed on 05.12.2020, so that the promoter cannot take  the plea of COVID-19; that Clause 9.2 of the model agreement entitles the allottee to  interest at the prescribed rate for every month of delay; that the promoter has not  obtained the OC/CC; that the complainant has paid Rs.52,85,794/-, stated to be  approximately 95% of the total sale price, and the balance is payable at the time of offer  of possession; and that the allegation of default is denied. 

# 6. The violations and contraventions contained in the complaint were given  to the representative of the respondents to which they denied and did not plead guilty  The complaint was proceeded for further inquiry. 

# 7. That representatives for parties addressed arguments on the basis of their  submissions made in their respective pleadings as summarised above. I have duly  considered the documents filed and written & oral submissions of the parties i.e.,  complainant and respondents. 

# 8. It is further pertinent to note that during the pendency of the present  proceedings, the learned counsel appearing on behalf of respondent no. 1 withdrew his power of attorney on 23.06.2026. Thereafter, no one appeared on behalf of respondent  no. 1 before this Bench. However, prior thereto, respondent no. 1 was duly represented  through its learned counsel, Sh. Sanjeev Sharma, and had also filed its reply to the  complaint. It is observed that respondent no. 1 was afforded ample and repeated opportunities to appear, participate in the proceedings and advance submissions in  support of its defence. However, despite the opportunities so afforded, none appeared  on its behalf after withdrawal of the power of attorney. No sufficient cause for its  continued non-appearance was brought to the notice of this Bench of Authority, nor was  any request seeking further opportunity to represent its case received. This Bench of  Authority is, therefore, satisfied that respondent no. 1 has been afforded reasonable and  sufficient opportunities to participate in the proceedings, but it has failed to avail the  same. In these circumstances, no useful purpose would be served by granting further  adjournments. Accordingly, the proceedings are being taken forward in the absence of  respondent no. 1, and the present complaint is being adjudicated on the basis of the  pleadings, replies, documents and other material available on record. It is clarified that  the non-appearance of respondent no. 1 shall not, by itself, be construed as an  admission of the allegations levelled by the complainant, and the matter is being decided  on its own merits and in accordance with law. 

# 9. During the arguments, Sh. Mohd. Sartaj Khan, learned counsel for the  complainant, submitted that the amount of Rs.6,48,452/- received by the complainant  may be deducted out of the interest receivable by her. It was recorded that the OC/CC  has not been obtained by the respondent till date. It was further recorded that six months'  time on account of COVID-19 is to be given, as the due date of possession falls within.  the COVID-19 period extension granted, and that the same was not objected to by the  learned counsel for the complainant. It was stated that the complainant had paid  Rs.52,85,794/- up to 05.12.2021 and that a further amount of Rs.2,91,495/- was paid by  her on 06.09.2023. Ms. Simran Paul, learned counsel for respondent no. 2, submitted  that no payment is receivable from the promoter by the bank, that the loan advanced to  the complainant has been fully received by the bank, that no dues are pending, and that  respondent no. 2 may be dropped from the proceedings. The record placed before this  Bench of Authority does not reflect any oral submission on behalf of respondent no. 1  other than reliance on its reply and Annexures R-1 to R-8. 

# 10. The following facts are admitted or not disputed. The complainant applied  for the unit on 30.11.2020. The Allotment Letter and the Agreement for Sale were  executed on 05.12.2020. The basic sale price is Rs.55,52,300/-. The date of possession  fixed by the Agreement for Sale is 05.12.2021, as pleaded by the complainant an recorded by the promoter in its reply, which adds that it is subject to force majeure. The  project is registered with this Authority and is stated by the promoter to be still under  development. The bank disbursed Rs.36,00,000/- to the promoter. The complainant  received Rs.6,48,452/- from the promoter as delay compensation under the Settlement  Agreement dated 16.09.2022. The OC/CC has not been obtained, as stated at the  hearing, and the promoter has not placed on record any OC/CC or any letter offering  possession. 

# 11. This Bench of Authority finds that the complainant is an allottee within the  meaning of Section 2(d) of the RERD Act, 2016. The Allotment Letter and Agreement  for Sale dated 05.12.2020 were executed between the parties, the promoter admits the  allotment, and it has accepted payments, raised demands and maintains a statement of  account in the name of the complainant. The project is registered with this Authority.  The complainant alleges failure to give possession by the agreed date and failure to  obtain the OC/CC, which are matters relating to Sections 11, 17, 18 and 19 of the RERD Act, 2016. This Authority has jurisdiction to entertain the complaint under Sections 31,  34(f) and 37 of the RERD Act, 2016. The promoter's general objection to maintainability  has not been supported by any particulars, and is rejected. 

# 12. As regards respondent no. 2, no relief is claimed against it in the  complaint, and the statement made on its behalf at the hearing that the loan has been  fully received and that no dues are pending has not been shown to be disputed. In the  view of this Bench of Authority, no cause of action is established against respondent no.  2, and it is liable to be dropped from the array of respondents. This finding does not  adjudicate any right or liability between the complainant and the bank under the loan  documents, which are not before this Bench of Authority for adjudication.  

# 13. The date of possession fixed by the "Agreement for Sale" is 05.12.2021.  The promoter pleads force majeure on account of COVID-19. The record reveals that  the Agreement for Sale was executed on 05.12.2020, whereas the circular of this  Authority dated 28.10.2020 (Annexure C-1) extends the validity of registration, and the  time for statutory compliances, in respect of dates falling on or after 15.03.2020 or  between 15.03.2020 and 15.09.2020. However, it was recorded at the hearing that six  months' time on account of COVID-19 is to be given and that the same is not objected  to by the learned counsel for the complainant. In view of this position, and in the absence  of any objection at the time of arguments, a period of six months on account of COVID- 19 is granted to the respondent, so that the date of possession stands extended to  05.06.2022. 

 

# 14. The promoter also contends, relying on Fortune Infrastructure v. Trevor  D'Lima, that three years from the date of the agreement is a reasonable period, and that  possession was offered within that period. This contention is not accepted. In the  present case the Agreement for Sale itself fixes a specific date of possession, which the  promoter admits in its reply, and the promoter has not shown that the judgment permits  an assumed reasonable period to displace a date agreed in writing. The statement in  paragraph 14 of the reply that possession was offered within the acceptable period is  not supported by any offer letter, none is listed among Annexures R-1 to R-8, and the  same reply states in paragraph 17 that the promoter is still developing the project and  has obtained an extension. The extension of the registration granted by this Authority  (Annexure R-8) operates as between the promoter and the Authority for regulatory  purposes, and it is not shown that it modifies the date of possession agreed with the  allottee. It is therefore established from the material on record that possession was not  offered by 05.06.2022, and has not been offered till date. 

# 15. The promoter alleges default by the complainant and relies on the  Termination Letter dated 04.02.2021 and the Demand Letter dated 10.09.2024. The  complainant denies any default and states that she paid as per the payment schedule  and that the balance is payable at the time of offer of possession. The record placed  before this bench of Authority does not establish that the allotment stands cancelled,  nor does the promoter plead cancellation or claim forfeiture of any amount or seek any  refund. On the contrary, the record reveals that, after the Termination Letter dated  04.02.2021, the promoter itself entered into the Settlement Agreement dated  16.09.2022, paid delay compensation to the complainant, and issued the Demand Letter  dated 10.09.2024, and it has been stated at the hearing that a payment of Rs.2,91,495/-  was made on 06.09.2023. This conduct of the promoter is inconsistent with the case  that the allotment stood terminated. The promoter's own obligation to deliver possession  by the agreed date and to complete the project, is independent of the alleged arrears.  The alleged amounts of default are not established by any reconciled account on the  record. If any payment by the complainant was delayed, the promoter's remedy lies in  interest on the delayed payment under Section 19(7) of the Act read with Rule 16 of the  Rules, which can be claimed only if specific notice of the delay and of the amount of  interest was given to the complainant, and which is left to be adjusted in the manner  directed below. 

 

# 16. The Settlement Agreement dated 16.09.2022 (Annexure R-3) is on record.  The promoter pleads that the complainant was adequately compensated thereby and is  not entitled to any further amount, but the material on record does not establish that the  agreement contains an express waiver by the complainant of her statutory right to  interest under the proviso to Section 18(1) of the RERD Act, 2016. The complainant's  allegation of fraud in respect of that agreement is not supported by particulars or  evidence on the record, and was not pressed at the hearing, where her learned counsel  himself submitted that Rs.6,48,452/- may be deducted from the interest receivable. It is  not disputed that Rs.6,48,452/- was received by the complainant as delay  compensation. It is therefore unnecessary to decide the plea of fraud. The amount of  Rs.6,48,452/- is to be given credit to the promoter by deducting it from the interest  payable, as submitted on behalf of the complainant, and the question whether the  Settlement Agreement bars any further interest is not required to be decided beyond  this adjustment, which the complainant herself accepts. 

# 17. The complainant does not seek to withdraw from the project, and seeks  possession, the OC/CC and interest. Her entitlement is therefore governed by the  proviso to Section 18(1) of the RERD Act, 2016, under which an allottee who does not  intend to withdraw from the project shall be paid by the promoter interest for every month  of delay, till the handing over of the possession, at such rate as may be prescribed. The  Hon'ble Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of  U.P. (Civil Appeal Nos. 6745-6749 of 2021) has also upheld that amounts payable  under Section 18 of the RERD Act, 2016 with interest may be recovered as arrears of  Land Revenue under Section 40(1) of the Act. In view of this Bench of Authority, the  promoter has failed to give possession by the extended date of 05.06.2022, the delay is  established, and the complainant is entitled to interest for every month of delay at the  rate prescribed by Rule 16 of the Rules, namely the State Bank of India's highest  marginal cost of lending rate plus two percent. The State Bank of India's highest  marginal cost of lending rate applicable on 15.10.2026 is taken as 8.95 percent, so that  the rate of interest is 10.95 percent per annum. Interest is to be calculated from the  month following the extended due date, namely 01.07.2022, on the amount of  Rs.52,85,794/-, and from 01.10.2023 on the amount of Rs.2,91,495/- paid on  06.09.2023, in accordance with the practice that interest on an amount runs from the  month following the month in which it was paid or, if later, from the month following the  due date, till the valid offer of possession after obtaining the OC/CC.  

# 18.The interest for the delayed period is accordingly calculated up to  31.10.2026, the period for payment of interest being considered from the month  following the extended due date or the date of payment, as the case may be. Therefore,  the calculation of delayed interest is calculated as follows:- 

• Total interest Rs.26,06,536/- 

• Less: delay compensation already received under Settlement  (-) Rs.6,48,452/- 

• Net interest payable up to 31.10.2026 Rs.19,58,084/- 

 

# 19.  The interest per month at 10.95 percent per annum is Rs.48,233/- on  Rs.52,85,794/- and Rs.2,660/- on Rs.2,91,495/-, which for 52 months from 01.07.2022  and 37 months from 01.10.2023 respectively, up to 31.10.2026, amounts to  Rs.25,08, 116/- and Rs.98,420/-, a total of Rs.26,06,536/-. After deducting Rs.6,48,452/-  already received by the complainant, the net interest payable up to 31.10.2026 is  Rs. 19,58,084/-. From 01.11.2026, interest continues to accrue at Rs.50,893/- per month  (Rs.48,233/- plus Rs.2,660/-) till the date of a valid offer of possession after obtaining  the OC/CC. 

 

# 20. For the reasons recorded above, the complaint is Partly Allowed. The  prayer for interest for delayed possession is allowed to the extent determined above.  The prayer for directions to obtain the OC/CC, offer possession and execute the  conveyance deed is allowed in the terms below. The prayer for litigation costs is  declined. The complaint against respondent no. 2 is not maintainable and is dismissed.  Accordingly, the following directions are issued. 

# 21. Respondent no. 1 shall pay to the complainant interest at the rate of 10.95  percent per annum on Rs.52,85,794/- from 01.07.2022 and on Rs.2,91,495/- from  01.10.2023, till the date of a valid offer of possession after obtaining the OC/CC. The  net amount of interest up to 31.10.2026, after deducting Rs.6,48,452/- already paid, is  Rs.19,58,084/-, which respondent no. 1 shall pay to the complainant within 90 days from  the date of receipt of this order. From 01.11.2026 respondent no. 1 shall further pay  interest at Rs.50,893/- per month till the date of a valid offer of possession after obtaining  the OC/CC on an amount of Rs.55,77,289/-. 

# 22. Respondent no. 1 shall obtain the Occupancy Certificate/Completion  Certificate from the competent authority and, in exercise of the powers under Section  37 of the RERD Act, 2016, shall issue a letter of offer of possession to the complainant  within seven days of receipt of the OC/CC, or simultaneously with the offer to any other  allottee of the project. The complainant shall take possession within the period provided  in Section 19(10) of the RERD Act, 2016 after the valid offer. 

# 23. Any amount payable by the complainant to the promoter under the  Agreement for Sale at the time of offer of possession shall be adjusted against the  amount awarded under this order together with the further monthly interest, and only the  net balance shall be payable by the party concerned. The promoter shall demand its  dues from the complainant only after paying or adjusting the amount determined in this  order. Any claim of the promoter for interest on delayed payments shall be admissible  only if specific notice of the delay and of the amount of interest was given to the  complainant earlier, and shall be calculated in accordance with Section 19(7) of the Act  and Rule 16 of the Rules. Till the entire awarded amount and accrued interest are paid  or adjusted, the complainant shall not be liable to pay maintenance charges to the  promoter, except where maintenance has been handed over to a Resident Welfare  Association or a third-party agency, against which no such adjustment shall be claimed.  In case of non-compliance, the net amount of Rs.19,58,084/- up to  31.10.2026 and the further interest at Rs.50,893/- per month from 01.11.2026 shall be  recoverable as arrears of land revenue under Section 40(1) of the Act read with the  Punjab Land Revenue Act, 1887, and are held to be land revenue for that purpose. The  Secretary of this Authority shall issue a Debt Recovery Certificate after 90 days from the  date of this order for those amounts, and send it to the jurisdictional Deputy  Commissioner, with a copy to both parties by e-mail and speed post. The amount  determined as interest upon the delayed period is held "Land Revenue" under the  provisions of Section 40(1) of the RERD Act, 2016. The said amounts are to be  collected as Land Revenue by the Competent Authorities as provided/authorized  in the Punjab Land Revenue Act, 1887 read with section 40(1) of the Real Estate  (Regulation and Development) Act, 2016. Any payment to any of the complainants  will be considered as payment towards all the complainants and in satisfaction of the  decree amount mentioned in this order. The recovery certificate to be issued should  specifically mention this direction for the Land Revenue Recovery Authorities. It is  directed at the cost of repetition that primarily the promoter i.e. M/s. Sushma  Buildtech Ltd. (Respondent no. 1) is responsible for payment of money  determined in this order. The proceedings u/s. 40(1) of the RERD Act, 2016 for  issue of recovery certificate are additional and a parallel legal remedy to recover  the dues determined under this order to be collected by the prescribed authority  under Punjab Land Revenue Act, 1874.  

# 25. However, at the cost of repetition it is ordered in addition to the discussion  and direction at various places in the order as follows:-  

• i. Respondent no. 1, M/s Sushma Buildtech Ltd., shall pay the  complainant interest at the rate of 10.95% per annum on the amounts  deposited, as determined in this order, till the date of valid offer of  possession after obtaining the OC/CC. 

• ii. The net interest amount of Rs.19,58,084/- calculated up to  31.10.2026, after adjustment of Rs.6,48,452/- already paid as delay  compensation, shall be paid within 90 days from the date of receipt of this order.  

• iii. Further interest of Rs.50,893/- per month shall accrue with effect  from 01.11.2026 till the date of valid offer of possession after obtaining the  OC/CC. 

• iv. Respondent no. 1 shall obtain the requisite Occupancy Certificate/Completion Certificate from the competent authority and issue  an offer of possession to the complainant within seven days thereof or  simultaneously with the offer made to other allottees of the project. 

• V. The complainant shall take possession within the period prescribed  under Section 19(10) of the Act after receipt of a valid offer of possession.  

• vi. Any amount payable by the complainant under the Agreement for  Sale shall be adjusted against the amount awarded under this order, along with accrued interest, and only the net balance, if any, shall be payable by  the concerned party. The promoter shall raise its demand only after  payment or adjustment of the amount awarded.  

• vii. Any claim of the promoter towards interest on delayed payments  shall be considered only upon proof of prior specific notice to the  complainant and shall be calculated in accordance with Section 19(7) of  the Act read with Rule 16 of the Rules. 

• viii. The complainant shall not be liable to pay maintenance charges to the promoter till the awarded amount along with accrued interest is paid or  adjusted, except where maintenance has been handed over to the Resident Welfare Association or a third-party agency. 

• ix. In the event of non-compliance, the amount due under this order,  along with further accrued interest, shall be recoverable as arrears of land revenue under Section 40(1) of the RERD Act, 2016, read with the  applicable provisions of the Punjab Land Revenue Act, 1887. The  Secretary of this Authority shall issue the requisite Debt Recovery Certificate after expiry of 90 days from the date of this order. 

• x. The complaint against respondent no. 2, Kotak Mahindra Bank Ltd.,  stands dismissed, as no cause of action or relief has been established  against it. 

 

# 26. The Secretary of this Authority is hereby directed to issue a "Debt  Recovery Certificate" after 90 days of receipt of this order, for the balance amount  of interest on delayed possession remaining after the adjustment directed above.  He will send the Debt Recovery Certificate to the jurisdictional Deputy  Commissioner of the District being Competent/ jurisdictional Authority as  mentioned in the Punjab Land Revenue Act, 1887 after 90 days of the issuance of  this order to be recovered as arrears of "Land Revenue". The complainant & the  respondent are directed to inform the Secretary of this Authority regarding any payment  received or paid respectively so as to take the same in to account before sending  "Recovery Certificate" to the Competent Authority for recovery. Further, Ms. Richa  Verma is held to be Decree Holder and the Respondent i.e. M/s. Sushma Buildtech  Ltd. as judgment debtor for the purposes of recovery under this order. 

# 27. A copy of this order be supplied to both the parties under Rules and file be  consigned to record room. 

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Granite Gate Properties Pvt. Ltd. vs. New Okhla Industrial Development Authority and Ors. - we are of the opinion that it is only proper that NOIDA waives the penalty charges since it is neither the default of the homebuyers nor the default of the SRA, which led to the delay. The homebuyers and the SRA are sought to be penalised for past sins of the Corporate Debtor, which cannot be allowed, especially in the context of the authority imposing penalty, ie: the local authority being concerned essentially with the development of the area under its control.

  SCI (2026.09.03) in Granite Gate Properties Pvt. Ltd. vs. New Okhla Industrial Development Authority and Ors. [(2026) ibclaw.in 562 SC, Civil Appeal No. 3132 of 2026 with Civil Appeal No. 4207 of 2026] held that; 

• In the peculiar circumstances of this case, we are of the opinion that it is only proper that NOIDA waives the penalty charges since it is neither the default of the homebuyers nor the default of the SRA, which led to the delay. The homebuyers and the SRA are sought to be penalised for past sins of the Corporate Debtor, which cannot be allowed, especially in the context of the authority imposing penalty, ie: the local authority being concerned essentially with the development of the area under its control.

Excerpts of the order;

Yet another case highlighting the plight of home buyers, who invest their hard-earned life savings for a roof over their heads, on promises of living in style and luxury, in grandiose high-rise buildings promised by the developer, with exotic names, end up with the realization that it was all a pipe dream.

# 2. Here, we are faced with a developer who took on perpetual lease, at a high premium, two plots of land to put up highrise buildings; apartment complexes thereon. On lease granted by the New Okhla Industrial Development Authority (NOIDA), two projects were advertised; one in Sector 100 and the other in Sector 110, called project ‘Lotus Boulevard’ and project ‘Lotus Panache’ respectively.

# 3. The developer M/s Granite Gate Properties Private Limited, ran into rough weather and was declared a Corporate Debtor (CD). The Committee of Creditors (CoC) was constituted of the home buyers who formed a Class of Financial Creditors. A Resolution Plan was approved and is to be put in motion through the Successful Resolution Applicant (SRA).

# 4. Numerous IAs were filed before the adjudicating authority, the NCLT, which was disposed of together with an IA filed by the Resolution Professional (RP) to approve the Resolution Plan of M/s SMV Agencies Private Limited, who has now turned the SRA.

# 5. From amongst the various directions passed by NCLT, an appeal was filed by the Authorized Representative for M/s Granite Gate Properties Private Limited, essentially the home buyers (herein after referred to as AR), NOIDA too filed an appeal.

# 6. In the appeal before us, the AR is concerned with the order of the NCLAT which directed the time extension charges with regard to both the lease deeds to be treated as CIRP costs for the maximum period of three years provided in the lease deed, for completion of the project. Insofar as NOIDA is concerned, they assert that the time extension charges are sought, not for three years alone, but for the further period as introduced by office order dated 18.10.2019, which are also to be included as CIRP costs.

# 7. Mr. Dhruv Mehta, learned Senior Counsel appearing for the AR submitted that during the CIRP, the home buyers pooled their own resources as advance payment of the balance sale consideration and carried out the construction as a going concern under the CoC approved ‘Pool and Build’ mechanism. However, NOIDA sealed three towers of the Lotus Panache on 16.10.2024 till a decision is arrived on the time extension charges. As far as time extension charges are concerned it does not come under Section 5(13)(c) of the Regulations since neither is it incurred by the Resolution Professional nor does it concern itself with the continuation of the project.

# 8. The time extension charges were claimed by NOIDA as dues payable by the Corporate Debtor for the first year from December 2016 to December 2017, the second year from December 2017 to December 2018 and in the third year from December 2018 up to the insolvency commencement date on 10.01.2019. If at all, the time extension charges are to be paid as CIRP costs only the remaining period from 10.01.2019 would stand included. The time extension charges in any event are penal in nature and the developer who has caused the default having ended up in a CIRP, the inclusion as CIRP costs would be unjust and misconceived. The default was of the developer and homebuyers cannot be mulcted with that liability.

# 9. Mr. Rachit Mittal, learned counsel appearing for the appellant-NOIDA in Civil Appeal No.4207 of 2026, on the other hand asserted that without payment of the time extension charges, there is no question of the project being continued and hence it has to be included as CIRP costs. It is also pointed out from the lease deed that the lease would be governed by the provisions of the UP Industrial Area Development Act, 1976 as also by the Rules/Regulations made or directions issued under this Act. NOIDA has come out with an office order dated 18.10.2019, as per the prevailing policy which, read with earlier office order dated 18.06.2015 has stipulated time extension, even beyond three years upto the 10th year. As per the new policy 7, 8, 9 and 10 percentage respectively for the first four years and thereafter at 1% of the total premium per year upto the 10th year and cancellation after that, which too has to be included as CIRP costs.

# 10. The SRA appears through Mr. Krishnendu Datta, learned Senior Counsel who adopts the arguments of the AR but points out, without prejudice, that in the resolution plan contingent protection is capped at the overlap period balance alone and the resolution plan itself records that unless specifically adjudicated to form part of CIRP costs by a binding judicial pronouncement any cost above Rs.3 crores estimate shall first be recovered from the allottees of towers 17/18/19 of Lotus Panache as super area charge.

# 11. We are hence concerned with the issue as to whether the time extension charges are to be treated as CIRP costs. We have looked at the lease agreement produced as Annexure A1 in the appeal filed by NOIDA. The lease deed indicates that the plot demised on lease has been acquired under the Land Acquisition Act, 1894 for development by NOIDA for the purpose of setting up an urban and industrial township. Hence, the intention of NOIDA in entering into such lease agreements is for development of urban and industrial township. An overall development of the area under its control to promote industrial and commercial enterprises as also build homesteads in multi-storeyed buildings is the purpose behind the acquisition and lease.

# 12. As the original lease deed existed, the stipulation for time extension charges were at 4%, 5% and 6% in the first, second and the third years of delay, respectively with only a stipulation for cancellation of the lease itself after the three year period is over. It would result in resumption of the properties to the NOIDA. The underlying purpose of the lease itself is to provide adequate infrastructure for the development of industries and commercial establishments as also to provide housing by utilisation of lands, both as a welfare measure and revenue generation to the local authority. When the development fructifies, by virtue of the taxes and duties imposed on the various activities as also housing there is considerable generation of money, which is pumped into development activities again. The authority surely is involved in a commercial venture, but it cannot be divorced from the essential purpose which every local authority pursues and advances, i.e.: welfare measures without a mere profit motive. Development brings within its wake infrastructure challenges and these are to be met from the taxes, cesses and duties levied and collected, necessitating prudent financial and economic measures too.

# 13. In the present case, we see that the project was commenced to provide housing, an essential part of development. Lured by the opportunity, many persons had invested their savings with the intention of obtaining a roof over their heads. The project itself ran into rough weather and at this point, the lessee/developer has been declared as a Corporate Debtor. The homebuyers together have pooled money to carry on the project during the CIRP period and now a SRA has come into the picture. The Resolution Plan of the SRA has been accepted by the CoC consisting of the homebuyers alone. It is to be noted that the project was to be completed in the year 2016, and despite another decade having passed, the homebuyers are still left in the lurch. The essential purpose of development would fail if NOIDA brings in a stipulation of payment of default charges.

# 14. The default charges, as imposed in the lease deed as also now introduced as per the new policy, specifies a percentage of the lease premium to penalise a defaulting developer. The intention is also to motivate completion within time lines and to act as a deterrent to avoid time lags. In the present case, the defaulting developer is out of the picture and the half baked project can be completed only if the Resolution Plan is put into operation and completed.

# 15. In the peculiar circumstances of this case, we are of the opinion that it is only proper that NOIDA waives the penalty charges since it is neither the default of the homebuyers nor the default of the SRA, which led to the delay. The homebuyers and the SRA are sought to be penalised for past sins of the Corporate Debtor, which cannot be allowed, especially in the context of the authority imposing penalty, ie: the local authority being concerned essentially with the development of the area under its control.

# 16. We hence, order that in the peculiar facts and circumstances of the case, the penalty as imposed by the NOIDA on delay, now mulcted on the SRA and the homebuyers, cannot be so validly imposed. We set aside the directions to consider the time extension charges as CIRP costs and modify the impugned order to that extent. NOIDA’s appeal praying for time extension charges even beyond the three years upto the 10th year also stands rejected.

# 17. Civil Appeal No.3132 of 2026 is allowed. Civil Appeal No.4207 of 2026 is dismissed.

# 18. Pending application(s), if any, shall stand disposed of.

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Maruthi Co-operative Housing Society Limited vs. Tridhaatu Maruthi Developers LLP & Anr. - However, none of the provisions of RERA renders the owner of the freehold or leasehold interest in the land, who enters into a development agreement with a developer, liable for discharging the developer's obligations under RERA merely because the developer subsequently enters into agreements for sale with third-party flat purchasers on the basis of such development agreement.

 HC Bombay (2026.10.16) in Maruthi Co-operative Housing Society Limited vs. Tridhaatu Maruthi Developers LLP & Anr.  [2026:BHC-OS:22683, Commercial Arbitration Petition (L) No.26942 Of 2026] held that; 

• However, none of the provisions of RERA renders the owner of the freehold or leasehold interest in the land, who enters into a development  agreement with a developer, liable for discharging the developer's obligations under RERA merely because the developer subsequently enters into agreements for sale with third-party flat purchasers on the basis of such development agreement.

• The Court has further reiterated that, in such circumstances, there is absolutely no privity of contract between the third-party purchasers and the Society or its members. Accordingly, no different view can be taken by any authority, including MahaRERA.

• The developer takes the risk of satisfying those third-party claims simply because those third-party rights are principal-to- principal agreements between the developer and third parties. The developer created them and incurred liabilities to third parties on his own and in pursuit of his gains. But that is only ever legitimate if the developer is not in default of its obligations to the society in the first place.

• No developer can be heard to say it has rights vis-a-vis third parties or free sale areas while yet in default of its obligations to the society. The fulfillment of the obligations to the society by the development is the sine-qua-non that entitles the developer to create third party rights and make profits from the free-sale areas.

• Absent a fulfillment of a foundational obligation to the society, there are no equities or rights that inhere in a developer vis-a-vis others or in respect of any free-sale areas.

• If the Society has found that its redevelopment project has not proceeded in the manner that it intended, then the Society is always within its legal entitlement to undertake the development itself or through any other developer of its choice. To resist this, a developer must able to show unequivocally that it is the society that is in default and it must show this in the clearest and most unambiguous terms, not in some roundabout, inferential or speculative manner.

• The Developer has abandoned the Project, and the Society has terminated the Development Agreement. Consequently, the third-party rights created by the Developer cannot survive the termination of the Development Agreement.

Excerpts of the order;

# 43. Upon considering the material on record, this Court held that there was no privity of contract between the Society and the third-party purchasers claiming through the Developer. The third-party purchasers could not claim specific performance of their respective agreements for sale except through the Developer. They stood or fell with the Developer. Where the Developer's rights were brought to an end by the lawful termination of the Development Agreement by the Society, the third-party purchasers could not assert any    independent claim against the Society or anyone claiming through it.

# 44.The agreements entered into with third-party purchasers were premised upon the existence of a valid, subsisting, and enforceable agreement between the vendors, i.e., the Developer, and the owners, i.e., the Society. If the Developer failed to perform its obligations, the purchasers had to suffer the consequences. The rights of the purchasers were subject to, and could not exceed, the rights of the Developer. Therefore, from a contractual  standpoint, the third-party purchasers had no case against the Society.

# 45 After the enactment of the Real Estate (Regulation and Development) Act, 2016 (RERA), the High Court, relying upon its earlier judgment in Vaidehi Akash (supra), observed in Goregaon Pearl CHSL v. Dr. Seema Mahadev Paryekar & ors. (2019 SCC OnLine Bom 3274) that the enactment of RERA does not make any difference to the legal position.

# 46.RERA was enacted to establish a regulatory authority for the regulation and promotion of the real estate sector, to ensure the sale of real estate projects in an efficient and transparent manner, and to protect the interests of consumers in the sector. The grievances of purchasers under RERA are addressed by the Regulatory Authority established under the Act.

# 47. However, none of the provisions of RERA renders the owner of the freehold or leasehold interest in the land, who enters into a development  agreement with a developer, liable for discharging the developer's obligations under RERA merely because the developer subsequently enters into agreements for sale with third-party flat purchasers on the basis of such development agreement.

# 48 The Division Bench of this Court, in Deepak Prabhakar (supra), while considering the case of third-party purchasers who had entered into agreements with the developer and claimed substantive rights in respect of the Society's property, in the context of the Society's proposal for its own redevelopment, reaffirmed the position of law laid down in Vaidehi Akash (supra) and Goregaon Pearl (supra).

# 49. The Division Bench of this Court, in Kapilkunj CHS (supra), has observed that third-party purchasers have no rights over the assets of the Society. It has further held that, if the Society undertakes redevelopment following the termination of its redevelopment agreement, any additional F.S.I. or buildable area generated thereby would enure to the benefit of the Society. The Court has observed that third-party flat purchasers have no rights, claims, or equities in respect of the assets of the Society. This includes not only the original structure but also the entire redevelopment project, including all additional F.S.I. and free-sale components. The Court has further reiterated that, in such circumstances, there is absolutely no privity of contract between the third-party purchasers and the Society or its members. Accordingly, no different view can be taken by any authority, including MahaRERA.

# 50 A similar view was taken by this Court in Rakhi Kamal (supra). This Court has consistently held that, even in the case of a RERA-registered project, purchasers' rights are confined to the development in which they have an interest. Upon the valid termination of the Development Agreement between the landowner and the developer, the purchasers' rights remain subject to the consequences of such termination, having regard to the fact that the contractual arrangement between the landowner and the developer is on a principal-to-principal basis. This position has been clearly explained in the judgment of Rajawadi (supra), wherein this Court, in paragraphs 49 to 54, has observed as follows:"

• “49. In all this, we should not miss something that seems to me to be cardinal. It is a mistake, in my view, to pillory a developer for being profit-oriented. That is the nature of every developer's business. That is what it does. Pursuing a profit is, as Mr. Shah points out, neither illegal nor criminal. It is perfectly legitimate. The question is not whether the pursuit of a profit is a good or a bad thing. It is a question of fidelity to the contract that permits the pursuit of profit. It is only this aspect of the matter with which we are concerned. In the course of pursuing that profit, the developer will create third party rights. Those cannot, in turn, create equities in favour of the developer against its contractual counterparty, the society. The developer takes the risk of satisfying those third-party claims simply because those third-party rights are principal-to- principal agreements between the developer and third parties.The developer created them and incurred liabilities to third parties on his own and in pursuit of his gains. But that is only ever legitimate if the developer is not in default of its obligations to the society in the first place. No developer can be heard to say it has rights vis-a-vis third parties or free sale areas while yet in default of its obligations to the society. The fulfillment of the obligations to the society by the development is the sine-qua-non that entitles the developer to create third party rights and make profits from the free-sale areas. Absent a fulfillment of a foundational obligation to the society, there are no equities or rights that inhere in a developer vis-a-vis others or in respect of any free-sale areas. 

• 50. The other fundamental factor never to be lost sight of is this: the Society is the belongs to the Society. The Society and the members will decide how and through whom they want to exploit their legal ownership rights over that property. It is not for any other outsider to say in generality that the rights of an owner have been compromised. If the Society has divested itself of ownership rights, there are ways in law of doing this. If the Society has found that its redevelopment project has not proceeded in the manner that it intended, then the Society is always within its legal entitlement to undertake the development itself or through any other developer of its choice. To resist this, a developer must able to show unequivocally that it is the society that is in default and it must show this in the clearest and most unambiguous terms, not in some roundabout, inferential or speculative manner. I imagine Mr. Shah understands this perfectly well. This is indeed the reason he has been at pains to try and make out a case in regard to deficiency of title. But if that case is not a clear and unambiguous breach, i.e. a fundamental breach, then his submissions will not assist his client, the Developer here.

• 51. There is a considerable amount of judicial learning on this branch of the law. I myself have had occasion to deal with such issues in the past, but before I turn to those, I believe this is an opportune matter to set out some broad principles.

• 52. There are, in my experience, and I do not say this with any rigidity, three broad classes of disputes of this kind pertaining to societies and their disputes with developers.

• (a) In Category 1, we find those cases where an agreement is entered into, the society and its members for some reason or the other do not vacate although the developer has everything ready to proceed.

• (b) In Category 2, one that is sadly quite common, we have a situation where the society and their members vacate, the developer takes possession, but then nothing happens for years together; and when the society tries to take charge of its own estate and redevelopment, the developer comes forward and cites the pendency of the agreement. In such cases, the developer is very often in default of huge amounts of financial obligations. There, clearly, there is no equity on the side of the developer. Such developers are often only speculating in land and property prices.

• (c) Category 3 cases, and this is where I believe the present case falls, are those where the society has vacated, the developer has taken possession, has done some amount of work, but then at some point falls behind in payment of financial obligations and completion of development. This is a downward spiral. The developer gets mired more and more in debt. The arrears of transit rent keep mounting with each passing month, and then there is a near financial impossibility. Sometimes, these matters are resolved by negotiations, but it is here that the questions of law and of assessment of contracts really arise.

• (d) Category 4 cases are of the kind where both the society and the developer are on the same page. Most members of the society have vacated. The developer is ready to proceed, but there are one or two dissenting members. This category of cases will fall within the Girish Mulchand Mehta & Ors. v. Mahesh S. Mehta & Ors.2 line of judgments and need not detain us. That is now a separate jurisprudence of its own. 

• 53. Each of one these requires a slightly different approach, but in the Category 3 cases with which we are concerned, I would venture to suggest that, again without attempting to lay down any strait jacket or rigid formula, the following tests are among those to be applied:

• (a) Can it be shown that there is a default on the part of the society in fulfilling its obligations? For instance, has the society failed or refused to vacate? Has it wrongly claimed arrears of transit rent or other dues although these have been paid? Is the society itself merely trying to squeeze more financial gain out of the developer? If so, the society's petition will be dismissed--possibly with costs and even strictures-- and the developer will receive the full weight of protection against unjust or unlawful termination.

• (b) Can the default by the society be said to be a fundamental breach or a breach of a fundamental term such as would excuse the developer from performing one or more of its obligations? For instance, a failure to deliver possession might constitute such a fundamental breach; for, without possession, the developer simply cannot proceed. Unless it has vacant possession, the developer has no obligation to pay transit compensation or, possibly, the other dues.

• (c) Can it be shown that the financial or other obligations of the developer have a one-to-one correspondence with the obligations of the society such that a default by the society would absolve the developer from the performance of his obligations? Again, an example of this might be the society's obligation to deliver vacant possession. It is quite clear from any reading of any of these agreements that a failure to do so will result in the developer being excused from performing almost all his obligations including the financial obligations. But once this has happened--and this is why at the beginning of this judgment I called a trigger event-- then a series of consequences begin to follow. Unless it is demonstrated that the developer's ensuing obligations have a express conditionality attached to them, the developer cannot seek to evade the consequences of a breach of its financial obligations and its obligations to complete the development on time.

• 54. Therefore, a final factor relates to how a Category 3 case developer conducts itself once the society has come to court. There are several distinct elements in play at this time: (i) accumulated arrears of transit rent and other dues; (ii) the obligation to pay ongoing transit rent until possession with an occupation certificate; (iii) payment of statutory and corporation dues, including property tax (including arrears, and irrespective of when these are actually due), for non-payment puts at risk the very property of the society; and (iv) a demonstration of the financial means to bring the project to completion. To stave off a society's petition framed such as the present one is, the respondent-developer must place an acceptable proposal that covers all these. Accumulated arrears can be capitalized and allowed to be paid in reasonable tranches or instalments. But while that is happening, ongoing payment obligations must be met month to month. All statutory dues and property taxes must be cleared. There must be a tenable, viable and cogent statement of availability of financing to complete the project, and this, in turn, requires a fair estimate of the remaining costs of completion, disclosure of the source of funding (not some woolly promise or expectation) and the actual and ready availability of, and access to, that funding. Inevitably, there will also be a default clause in any such re-worked understanding that culminates in Consent Terms or a consent order: if there is a default (of such kind as is agreed before the Court), the developer must accept (a) the termination; (b) ejectment from the site; and (c) its liability to pay all accumulated financial debts until the date of default—all resulting automatically in an enforceable order of the court. Nothing short of this will do.”

# 51. Considering the law laid down by this Court in the aforesaid judgments, this Court finds that there is no impediment to granting relief to the Petitioner under Section 9 of the Arbitration and Conciliation Act, 1996, notwithstanding the fact that the Project is registered under RERA and that third-party rights have been created by the Developer. The Developer has abandoned the Project, and the Society has terminated the Development Agreement. Consequently, the third-party rights created by the Developer cannot survive the termination of the Development Agreement.

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