Property Law · RERA
Filing a RERA Complaint for Delayed Possession: Refund or Interest
When a promoter misses the possession date, the buyer has a statutory remedy and a choice to make. The choice between a refund and monthly interest is the most important decision in the complaint, and it is made before anything is filed. This note sets out how the process works and where buyers go wrong.
The Choice
Refund or interest under Section 18(1)
Section 18(1) applies where a promoter fails to complete the project or give possession in accordance with the agreement for sale, or by the date stated in it. The allottee then has two options.
The first is to withdraw from the project. The promoter must return the amount received, with interest at the rate prescribed in the state rules, and compensation as provided in the Act. The second is to stay in the project. The promoter must then pay interest for every month of delay until possession is handed over.
The decision should rest on facts, not anger. Look at the construction on site, not the promoter's brochure. Look at how much of the price has been paid, whether the project is registered, and whether you still want the flat at today's prices. A buyer who chooses a refund in a project that is nearly complete may regret it. A buyer who chooses interest in a project that has stalled may wait years for possession that does not come.
The Forum
Which authority, and is the project registered
RERA operates state by state. The complaint goes to the authority of the state or Union Territory where the project stands. Under Section 31, any aggrieved person may complain to the authority or the adjudicating officer about a violation of the Act, the rules or the regulations.
Start with the project's registration page on that authority's website. It shows the promoter, the declared completion date and any extension granted. That record is often the first document we examine. If a project that should have been registered under Section 3 is not registered, that is a separate violation and can be raised in the same complaint.
Our page on the RERA route in Delhi NCR covers the registration exceptions and the position for projects in Noida and Gurugram.
Before Filing
The documents that decide the complaint
A RERA complaint is won or lost on paper. Gather these before drafting anything:
- The builder-buyer agreement or agreement for sale, and the original allotment letter, with every annexure.
- Every payment receipt, bank statement entry and demand letter, so the amount and the date of each payment can be shown.
- The brochure, advertisements and any representations about the completion date.
- All correspondence with the promoter, including emails, messages and any letter extending the date.
- Any offer of possession and the occupancy or completion certificate, if one has been issued.
- The project's registration details from the authority's website.
Interest is worked out from the dates on which each payment was made, so an incomplete payment record reduces the claim. A legal notice to the promoter before filing is not a statutory requirement, but it fixes your position and records the promoter's answer.
The Filing
What the complaint says, and how it proceeds
The complaint is filed in the form and with the fee prescribed by the state rules, usually supported by an affidavit and the documents above. It names the project and the promoter, states the agreed date for possession, sets out the delay, and asks for the specific relief under Section 18. Where compensation is claimed, that part is directed to the adjudicating officer under Section 71.
The promoter is served and files a reply. The authority hears both sides and decides on the documents and arguments. The Act is meant to give a faster remedy than a civil suit, but timelines vary between authorities and between matters, and we do not forecast one.
The interest rate is fixed by the state rules and applies in both directions. An allottee who pays late owes interest to the promoter at the same rate, which is why a clean payment record matters.
The Defence
What promoters argue, and how it fares
The usual defence is that the delay was beyond the promoter's control: approvals, labour shortages, court orders, the pandemic. In Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh (2021), the Supreme Court held that the right to a refund under Sections 18(1) and 19(4) is unconditional where possession is not given by the agreed date, and that the promoter's excuses do not defeat it. The same decision confirmed that the authority decides refund and interest, while the adjudicating officer decides compensation.
Promoters also argue that the agreement fixes a long grace period, that the buyer accepted possession or extensions, or that the project is exempt. Each argument turns on the wording of the agreement and the project's record. The Act also recognises force majeure in defined circumstances in relation to registration, so the promoter's history of extensions needs to be read, not assumed.
After the Order
Appeal, pre-deposit and enforcement
An order of the authority can be appealed to the Appellate Tribunal under Section 44, ordinarily within sixty days. A promoter who appeals an order requiring payment to an allottee must first deposit at least thirty per cent of the penalty, or the total sum payable to the allottee including interest and compensation, under the proviso to Section 43(5). The Supreme Court upheld that condition in Newtech. A further appeal on a question of law lies to the High Court under Section 58.
Section 40 allows the amount to be recovered as arrears of land revenue, and the authority can impose a penalty for non-compliance. An order is only the first stage. Whether it is paid depends on the promoter's assets and on other creditors, so we look at that early.
Other routes exist. A buyer may go to the consumer commission, as the Supreme Court held in Imperia Structures Ltd. v. Anil Patni (2020), but not for the same relief in both places. Section 79 bars a civil court from entertaining a suit on a matter the authority is empowered to decide. Where the builder is insolvent, the buyer is a financial creditor under the Insolvency and Bankruptcy Code, 2016, which is a collective route. For disputes that are broader than delay, see our builder dispute page.
Questions
Frequently asked
- Section 18(1) of the Real Estate (Regulation and Development) Act, 2016 gives the allottee the choice. A refund with interest ends the relationship with the promoter. Interest for every month of delay keeps the allotment alive until possession is handed over. The right choice depends on how far the project has actually progressed, how much you have paid, and whether you still want that flat.
- With the Real Estate Regulatory Authority of the state or Union Territory where the project is situated, not where you live or where the builder has its office. A project in Noida goes to the Uttar Pradesh authority and one in Gurugram to the Haryana authority. Check the project's registration page first, because it shows the promoter, the declared completion date and any extension.
- No. In Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh (2021), the Supreme Court held that the allottee's right to a refund under Sections 18(1) and 19(4) is unconditional where the promoter fails to give possession by the agreed date. The promoter's explanations may still bear on other questions, such as compensation, so they are answered on the record.
- The Act does not prescribe one for a complaint to the authority. That is not a reason to wait. Delay can count against a buyer when the authority weighs the facts, and the deadline to appeal an order is short, so acting soon after the promoter misses the agreed date is the safer course.
- Not as a matter of law. An allottee can appear in person before the authority. A lawyer is useful where the claim is large, the agreement is one-sided, the promoter contests the complaint, or the choice between RERA, the consumer commission and other routes is not obvious. We give a view on that after reading the agreement and the payment record.
- The authority decides refund and interest. Compensation for the heads covered by Sections 12, 14, 18 and 19 is decided by the adjudicating officer under Section 71. A complaint may therefore be heard in two parts, and the relief should be pleaded with that in mind.
- The amount can be recovered under Section 40 as arrears of land revenue, and the authority can impose a penalty for non-compliance. How much is actually recovered depends on what the promoter owns and who else is owed money, so enforcement is planned before the order is passed, not after.
- Often, yes. In Imperia Structures Ltd. v. Anil Patni (2020), the Supreme Court held that the Act does not bar a homebuyer from approaching the consumer commission. The same relief should not be pursued in both places. Our page on the RERA route sets out how the forums compare.