A comprehensive analysis of the 2025 K-RERA order in Avnish Kumar & Anr. v. Shanders Properties Pvt. Ltd. regarding refund and interest under RERA for delayed possession—essential reading for real estate professionals, buyers, and legal practitioners.

Case Background

The case concerned a dispute between homebuyers Avnish Kumar and Shilpa Giri (Complainants) and the developer Shanders Properties Pvt. Ltd. (Respondent) regarding a residential plot in the project "Shanders Court Yard," Chikkannagamangala Village, Bengaluru. The homebuyers entered into a sale agreement dated 21.05.2024 for a consideration of ₹1,17,99,600 and paid ₹29,49,900. Due to unforeseen family and financial issues, the buyers requested cancellation in July 2024 and repeatedly sought a refund. The developer refunded ₹5,00,000 in January 2025 but refused further payment, instead making deductions and claiming the buyers themselves were at fault. The case proceeded before the Karnataka RERA Authority, ultimately resulting in an order for refund with statutory interest.​

Legal Issues

• Whether the buyers (allottees) were entitled to refund with interest under Section 18 of the RERA Act despite their own request to cancel.

• Applicability of deductions claimed by the builder (brokerage and cancellation charges).

• The RERA Authority’s jurisdiction on refund, compensation, and interest disputes.

• Effect of unilateral deductions and builder's refusal to pay interest.

• Enforcement mechanism under Section 40 RERA (recovery as arrears of land revenue).​

Arguments Builder’s Contentions

• Sale agreement obligations were fulfilled; refund not warranted under Section 18 as there was no delay attributable to developer.

• Buyer’s cancellation was voluntary (personal dispute), so developer not responsible for statutory interest or full refund.

• Only partial refund warranted after deducting ₹3,00,000 for brokerage per agreement, and further amounts for other charges.

• RERA lacks jurisdiction for compensation/interest in such voluntary cancellation cases.

Allottee’s Submissions

• Sought refund under Section 18 due to non-cooperation and delays after payment.

• Argued builder failed to execute Sale Deed or hand over possession within the stipulated time and did not abide by verbal assurance to refund remaining sum with 9% interest.

• Claimed deduction for brokerage was arbitrary, unjustified, and unsupported by documentary evidence.

• Asserted that RERA’s statutory rights override conflicting contractual terms.​

Court’s Findings and Legal Reasoning

Citing sections 18, 31, 43, and relevant Supreme Court precedents, the Authority held:

• Section 18 entitles allottees to full refund with interest if possession is not timely handed over or if buyers withdraw for valid reasons—even if the withdrawal is not directly due to developer delay.

• Builder did not furnish proof of offer of possession, nor justify deductions or failure to pay interest.

• Deduction for brokerage not backed by record; unilateral contract deductions cannot override statutory protection under RERA.

• Authority has clear jurisdiction to entertain refund and compensation claims under the Act.

• Interest on refund to be computed as per SBI MCLR +2%, in line with established RERA refund rules and supporting Supreme Court authority (Imperia Structures Ltd. v. Anil Patil).

• Enforcement mechanism under Section 40 read with Rule 25 of Karnataka Rules, enabling money recovery as arrears of land revenue from the developer.​

Final Judgment

• The respondent developer is directed to refund ₹27,45,121 with interest to the complainants within 60 days of the order, with continuing interest at the prescribed rate until full payment.

• Unjustified deductions were disallowed.

• Failure to comply would render the amount recoverable as arrears of land revenue, with the jurisdictional Deputy Commissioner empowered to execute recovery.

• The complainant is permitted to proceed with statutory recovery in case of default.​

Critical Analysis

This decision highlights K-RERA’s buyer-centric approach, affirming that RERA authorities will strictly enforce statutory refund rights and scrutinize developer deductions. The Authority’s insistence on documentary proof for broker deductions and rejection of vague defenses ensure transparent, accountable builder conduct. The ruling affirms that RERA’s jurisdiction extends even to cases where the buyer initiates withdrawal, provided builder-related issues or failures occur. Also, ordering recovery via land revenue authorities reflects the robust enforceability of RERA awards, reducing the likelihood of developer default and ensuring relief for aggrieved consumers.

Conclusion

The judgment in Avnish Kumar & Anr. v. Shanders Properties Pvt. Ltd. is a landmark for homebuyer rights under RERA, emphasizing that developers cannot unilaterally deduct amounts or evade interest liability under the Act. The outcome strengthens Indian RERA jurisprudence by prioritizing allottee protection, streamlining refunds, and enhancing the effectiveness of enforcement via revenue authorities. This case underscores the complementary nature of RERA, consumer courts, and NCLT, broadening remedy options for homebuyers and reinforcing real estate accountability. It is a vital precedent for future refund and delay possession cases in Indian real estate law.

Summary and Written By : Advocate Rajeev K Jha

Disclaimer: All views are personal and for educational purpose only. 

Source: KRERA Authority

KRERA Order for Refund

KRERA Execution Order

Karnataka Revenue Recovery Order