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  • Writer's pictureDevesh Saxena

Allahabad High Court Orders Developer to Pay Outstanding Amount to Homebuyer [Read Orders]

Introduction


In a significant order, the Allahabad High Court has ruled in favor of a homebuyer, ordering a real estate developer to pay the outstanding amount as determined by the Uttar Pradesh Real Estate Regulatory Authority (UPRERA). The case highlights the importance of accountability in the real estate sector and provides much-needed relief to the aggrieved homebuyers who have faced delays and unfulfilled promises from developers.


The Case: Background and Petition


The case before the Allahabad High Court revolves around a homebuyer who had invested in a residential flat. Despite making full payment to the developer, the homebuyer was left without possession of the property. Frustrated with the developer's inaction, the homebuyer filed a complaint case before UPRERA, where UPRERA was pleased to grant an order directing the developer to refund the amount deposited by the homebuyer including interest, and later issued a recovery certificate to the District Magistrate of Gautam Buddha Nagar directing him to recover the amount from developer. However, since there was no action taken on the part of the District Magistrate, a writ petition was filed by the homebuyer before the High Court seeking direction to the District Magistrate to complete the recovery process of the outstanding amount due to him in a specific time bound manner.


The High Court's Verdict


In a significant ruling, the Allahabad High Court ordered the real estate developer to pay the entire outstanding amount to the homebuyer including the interest amount. The Court took cognizance of the recovery certificate issued by RERA and directed the developer to issue six post-dated cheques, totaling the entire outstanding amount to the homebuyer.


The Court also directed both parties to approach the Collector to determine the interest outstanding against the developer. The developer has been given a four-week period to make payment of the determined interest amount.


Accountability of Developers


The High Court's verdict sends a strong message to developers that they will be held accountable for their actions. This ruling serves as a warning to unscrupulous developers who fail to deliver on their promises and highlights the need for transparency and adherence to regulations in the real estate industry.


Key Takeaways


- The Allahabad High Court has ordered a real estate developer to pay the entire outstanding amount (including the interest part) to the homebuyer as per the recovery certificate issued by RERA.
- The Court directed the issuance of six post-dated cheques totaling the entire outstanding amount to the homebuyer.
- Both parties will approach the Collector to determine the interest outstanding against the developer.
- The developer has a four-week window to make payment of the interest amount.
- Failure to honor any of the cheques could result in contempt of court, apart from other criminal proceedings provided in the law.

FAQs


Can the homebuyer seek further action if the developer fails to make the payment?


Yes, if the developer fails to honor any of the post-dated cheques within the specified timeframe, the homebuyer can take legal recourse and seek contempt of court action against the developer.


Is the ruling applicable to all developers in Uttar Pradesh?


While this specific case pertains to a developer in Gautam Buddha Nagar, the ruling sets a precedent for other developers in the state. It establishes the principle of accountability and adherence to RERA regulations for all real estate developers.


Can the developer challenge the High Court's order?


The developer has the option to appeal the High Court's order in a higher court. However, during the appeal process, they must still comply with the existing order until a different verdict is given.


How will this ruling benefit other homebuyers?


This ruling will act as a deterrent for developers who may contemplate unfair practices and delays in property delivery. It assures homebuyers that they have legal recourse and that the court will protect their rights.


What steps can homebuyers take to safeguard their interests?


Homebuyers can protect their interests by conducting thorough research about the developer, project, and legal compliance before investing in any property. It is advisable to check the developer's track record and RERA registration to ensure transparency.


How can RERA assist homebuyers?


RERA plays a crucial role in protecting homebuyers' interests by ensuring that developers adhere to project timelines and regulations. If a homebuyer faces any issues, they can approach RERA for timely resolution and compensation.


Conclusion


The Allahabad High Court's ruling in favor of the homebuyer is a significant milestone in the real estate sector, emphasizing the importance of accountability and fair practices. It serves as a beacon of hope for homebuyers who have been wronged by unscrupulous developers and sends a powerful message that the court will uphold their rights. With this verdict, the judiciary has reinforced the need for transparency and adherence to RERA regulations, benefiting homebuyers and enhancing the credibility of the real estate industry.


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(All the petitions on behalf of the Allottees were filed and argued by S&D Legal Associates in association with its Partners and Associates based in Prayagraj)

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Read Orders:

WRIC(A)_22457_2023 (Against Greenbay Infrastructure Pvt. Ltd.)
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WRIC(A)_18157_2023 (Against Green Bay Infrastructure Pvt. Ltd.)
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WRIC(A)_15387_2023 (Against Sikka Infrastructure Pvt. Ltd.)
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Download PDF • 108KB

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