Punjab RERA directs builder to pay Rs 19 lakh interest for delayed flat possession in Florence Park project.

May 12, 2026 : The Punjab Real Estate Regulatory Authority (Punjab RERA) has directed a Chandigarh-based real estate developer to pay more than Rs. 19 lakh in delayed possession interest to homebuyers after finding that the builder failed to hand over a residential apartment within the agreed timeline under the Real Estate (Regulation and Development) Act, 2016. The Authority held that contractual clauses and arbitration provisions cannot override statutory remedies available to allottees under RERA.

The order was passed by Binod Kumar Singh, Member, Punjab RERA, in Complaint No. 0018 of 2024 titled Bhupesh Rana and Ambika Rana vs Ambika Realcon Private Limited. The dispute concerned an apartment in the “Florence Park” project situated at Mullanpur, New Chandigarh, Punjab. The complainants had approached the Authority under Section 31 of the RERA Act seeking possession of the flat along with compensation and interest for the delay in handing over the apartment.

According to the complaint, the buyers booked Apartment No. FP/ASTER/B/502 in Tower Aster B of the project after paying a booking amount of over Rs. 14 lakh. The total sale consideration of the apartment was approximately Rs. 87 lakh, and the agreement for sale dated December 18, 2021 stipulated that possession would be delivered by December 31, 2022. The complainants informed the Authority that they had already paid around Rs. 61.87 lakh, which constituted nearly 65 percent of the sale consideration, but possession was still not handed over despite expiry of the committed deadline.

The homebuyers further alleged that instead of offering lawful possession with the required Occupation Certificate and Completion Certificate, the developer issued a demand letter in December 2023 seeking additional payments before handing over the apartment. The complainants contended that the demand was illegal because the project had not yet received the mandatory statutory approvals required for occupation. They also asserted that they wished to continue with the project and sought delayed possession interest under Section 18 of the RERA Act rather than seeking refund of the deposited amount.

The developer, Ambika Realcon Private Limited, opposed the complaint and argued that the allottees themselves had defaulted in making timely payments under the agreed payment plan. The builder also relied on contractual clauses contained in the apartment buyer agreement and cited arbitration provisions, contending that the dispute should be referred to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. The respondent further attempted to justify the delay by referring to the Covid-19 pandemic and claimed that extensions granted to developers during the pandemic period should be taken into consideration.

Punjab RERA rejected the developer’s objections and held that arbitration clauses cannot extinguish or dilute the statutory rights granted to homebuyers under the RERA framework. The Authority observed that “the arbitration clauses in agreements cannot override statutory remedies available under RERA.” It further noted that the agreement itself had been executed in December 2021, well after the outbreak of Covid-19, and therefore the builder could not use the pandemic as a blanket justification for the delay in handing over possession.

The Authority also referred to judicial precedents, including the Supreme Court ruling in Ireo Grace Realtech Pvt. Ltd. vs Abhishek Khanna, to hold that one-sided clauses in apartment buyer agreements amount to unfair trade practices. Punjab RERA emphasized that the right of an allottee to receive interest for delayed possession under Section 18(1) of the RERA Act is an “indefeasible right” that cannot be defeated by contractual conditions or absence of a specific clause in the agreement.

Explaining the legal position, the Authority quoted Section 18(1) of the Real Estate (Regulation and Development) Act, 2016, which provides that if a promoter fails to complete or hand over possession of an apartment in accordance with the terms of the agreement for sale, the allottee is entitled to receive interest for every month of delay until possession is handed over. The Authority clarified that this statutory protection operates independently of contractual arrangements between the parties.

During the proceedings, the developer informed the Authority that fit-out possession had initially been offered in December 2023 and again in December 2025. It was also submitted that the project subsequently received a Partial Completion Certificate in September 2025 and an Occupation Certificate in October 2025, after which valid possession was finally offered on November 7, 2025. However, Punjab RERA held that the delay from January 1, 2023 till November 7, 2025 stood established on record.

Accordingly, the Authority directed the builder to pay delayed possession interest at the rate of 10.80 percent per annum, calculated in terms of Rule 16 of the Punjab State Real Estate (Regulation and Development) Rules, 2017. The interest was ordered on the amount of Rs. 61,29,293 paid by the complainants from January 1, 2023 until the date of valid offer of possession on November 7, 2025. The total delayed interest liability was calculated at Rs. 19,02,904, which the developer has been directed to pay within 90 days.

Punjab RERA additionally ruled that since the builder failed to provide ready-to-move-in possession within the stipulated period, the allottees would be entitled to stop further payments until construction milestones were appropriately completed. The Authority warned that failure to comply with the order could attract penalties under Section 63 of the RERA Act.

The ruling is significant for homebuyers across India as it reinforces the principle that statutory protections under the RERA Act prevail over one-sided contractual terms imposed by developers. The decision also signals that developers cannot routinely invoke Covid-19 disruptions or arbitration clauses to avoid liability for prolonged possession delays where statutory obligations under RERA remain unfulfilled. The order strengthens the position of allottees seeking compensation for delayed delivery of residential projects and reiterates the consumer-centric framework introduced under the 2016 legislation.

Case Reference: Complaint No. 0018 of 2024, Bhupesh Rana and Ambika Rana vs Ambika Realcon Private Limited; before Punjab RERA Member Binod Kumar Singh. Advocates: Hoshiar Chand for the complainants and Manpreet Singh Longia for the respondent.