M & Z Legal – Advocates & Solicitors

Introduction

RERA is frequently discussed in terms of refund and interest for delayed possession. Yet a homebuyer may prefer to retain the apartment while seeking redress for a promoter’s separate statutory breach. Must the allottee surrender the property to pursue compensation?

Different remedies under Section 18

Section 18(1) distinguishes the allottee who wishes to withdraw from the project from the allottee who does not withdraw and seeks interest for delay until handing over possession. Section 18(2) separately concerns compensation for loss from defective title. Section 18(3) addresses compensation for failure to discharge other obligations under the Act, rules, regulations or agreement for sale, subject to its terms.

Compensation is not always rescission

A claim for defective title or a proven breach of promoter obligations need not necessarily be structured as a demand to cancel the sale and recover the purchase price. Whether retention and compensation can coexist depends on the particular provision, the nature of loss and whether the remedies are inconsistent.

Jurisdictional allocation

The Supreme Court’s decision in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. (2021) is central to the distinction between the Authority’s powers concerning refund and interest and the adjudicating officer’s role in determining compensation. Careful drafting of the prayer is essential.

No double recovery

A purchaser cannot obtain multiple recoveries for the same injury merely by framing parallel claims as interest, damages and compensation. Any prior settlement, award or recovery should be disclosed and accounted for.

Conclusion

Withdrawal is not a universal prerequisite to all compensation under RERA. A retained-property claim should identify an independent statutory breach, actual loss and the correct adjudicatory forum.