While the developer was ready to refund the initial amount paid by the homebuyer, the authority ordered the developer to sign the sale deed and handover the plot.

The Karnataka Real Estate Authority (KRERA) has ordered a developer to return a plot, already sold to a second buyer, to the initial homebuyer after eight years of delay.

In this case, when the developer failed to sign the sale deed, the homebuyer stopped paying the pending amount. Then the developer decided to cancel the agreement and sell it to another buyer.

However, KRERA ordered the developer to return the plot to the initial homebuyer due to contractual obligations, according to the order passed on April 20.

The project, Bella Palms in Belgaum, is a plotted development and is currently unregistered under KRERA.

The case

The homebuyers Col Sai Krishna and his family, invested Rs 16 lakh in the plot developed by the developer Vega Spaces in 2014. However, till 2017 when he paid about Rs 9 lakh, the developer failed to sign the sale deed despite several reminders.

Krishna filed a complaint at KRERA demanding the sale deed be executed and the plot be handed over to them.

However, the developer contested the case before the authority saying that after acknowledging the first payment, the homebuyer did not come forward to pay the remaining amount.

"Thus after waiting for three years, it held that the allotment was cancelled and the homebuyer is entitled to a refund," Vega Space told KRERA.

In 2020, the local planning authority, Belgaum Urban Development, approved a revised sanction plan for the project and the developer decided to sell all plots to third parties.

"The homebuyer did not come forward with the remaining amount before the formation of the new layout and thus the sale deed cannot be executed. And we are ready to refund the amount paid by him initially," the developer added.

The order

Despite the developer being ready to refund the paid amount, KRERA noted that both the homebuyers and the company entered into an allotment agreement in 2014.

The company had to wait for three years for the homebuyer to come forward to pay the remaining amount and then decided to sell the plots to third parties after the revised project plan was approved, it noted.

However, KRERA said the letter of allotment is a key contractual obligation enforced by the law. "As per the agreement, the developer is supposed to handover said apartment by 2017. But the handover and the signing of the sale deed is still pending," the authority said.

Having accepted a substantial amount from the homebuyer, the developer is liable to execute the sale deed without any hike in the plot prices, KRERA ordered.

"The developer has to register the project under KRERA as an ongoing one and also handover the plot to the homebuyer after signing a sale deed," it added.