GujRERA Directs Refund with Interest to Buyers in Deregistered Project

Surat: In a major ruling reinforcing the rights of homebuyers in stalled real estate projects, the Gujarat Real Estate Regulatory Authority (GujRERA) has directed the promoters of Surat-based Tulsi Patra Residency to refund money collected from commercial shop buyers along with interest.

The order, passed in April, came after several allottees approached GujRERA alleging that the project was discontinued after they had paid substantial amounts towards shop bookings.

The complaints were filed by seven individuals, including Vijaykumar Bapodariya and Ramjibhai Bapodariya, who had invested lakhs of rupees in the project. According to the case records, the agreed prices for the commercial shops ranged between around ₹22.44 lakh and ₹41.79 lakh, with some buyers having already paid up to ₹31 lakh.

However, construction work on the project allegedly came to a halt. In August 2021, Tulsi Patra Developers sought de-registration of the project before GujRERA, citing financial difficulties and inability to continue the development. The authority approved the de-registration in September 2021.

During the hearing, the developers argued that since the project had already been de-registered, GujRERA no longer had jurisdiction to entertain the complaints. They further claimed that the money received from buyers was in the nature of “unsecured loans” and not booking amounts, asserting that no formal allotment letters or registered sale agreements had been executed. On this basis, they sought to classify the complainants as unsecured creditors instead of allottees under the RERA Act.

Rejecting the contention, GujRERA observed that its jurisdiction covers projects that were either registered or required to be registered under the Act. The authority found the developers’ claim regarding unsecured loans to be unsupported, citing documentary evidence such as bank statements, allotment letters and receipts signed by one of the project partners.

Holding that the buyers qualified as allottees under the RERA Act, GujRERA ruled that they were entitled to refunds under Section 18(1), as the project failed to provide possession or execute registered sale deeds.

The authority directed the promoters to refund the principal amount paid by each complainant along with 9 per cent annual interest. GujRERA also ordered suo motu action against the promoters for allegedly failing to disclose details of the allotments while applying for de-registration of the project.