Inner Urban Infrastructure Private Limited Vs Karnataka Real Estate Regulatory Authority (Karnataka High Court)
Summary: Respondent Nos. 2 and 3-allottees filed a complaint before the Karnataka Real Estate Regulatory Authority claiming interest for the delayed period in respect of Villa No.36 in the “Urban Serenity” project developed by the appellant, M/s. Inner Urban Infrastructure Private Limited. The parties had entered into an agreement for sale dated 23.11.2019 for a total sale consideration of Rs.79,50,000/-. Possession was promised on or before 15.01.2020, with a six-month grace period extending the date to July 2020. The promoter executed the sale deed on 11.03.2020, but possession was stated to have been given on 11.07.2020. The project, however, did not have an occupancy certificate at that stage and was stated to be incomplete, with several amenities pending.
During the pendency of the complaint, the promoter produced an alleged Occupancy Certificate said to have been obtained from the competent authority on 07.07.2021. The allottees nevertheless pursued their complaint. In its statement of objections, the promoter contended that the alleged delay was attributable to the allottees’ failure to adhere to the payment schedules under the agreement for sale. It further contended that delay in obtaining the Occupancy Certificate and other necessary approvals was caused by the inefficiencies of Government bodies and the COVID-19 pandemic, which it characterised as a force majeure event causing labour shortages, supply-chain interruptions and delays in statutory approvals beyond its control.
By order dated 05.06.2023, the Authority dismissed the complaint. The allottees thereafter filed Appeal No.(K-REAT) 103/2023 before the Karnataka Real Estate Appellate Tribunal. The Appellate Tribunal considered the provisions of the Real Estate (Regulation and Development) Act, 2016, including Sections 11 and 19. It held that the promoter was required to obtain the completion certificate/Occupancy Certificate before handing over possession and was not exempted from liability for delay merely because the sale deed had been executed before obtaining the Occupancy Certificate. The Tribunal accordingly held that liability for delay-period interest continued until the Occupancy Certificate was obtained and lawful possession was handed over.
The Appellate Tribunal also noted deficiencies relating to electricity supply and found that the Villa had not been completed in all respects when the sale deed was executed. It further referred to three earlier appeals between the promoter and other allottees in which joint memos had been filed, pursuant to which the promoter had agreed to release amounts deposited with the Appellate Tribunal in compliance with the proviso to Section 43(5) of the RERA Act towards full and final settlement of interest for the delayed period. The Tribunal consequently held the promoter liable to pay delay-period compensation from the date of the sale deed until the date of the Occupancy Certificate on 07.07.2021.
The promoter subsequently filed Review Petition (K-REAT) No.8/2025 before the Appellate Tribunal. For the first time at the review stage, it produced an Occupancy Certificate dated 19.02.2020 purportedly issued by the concerned Grama Panchayat and sought to distinguish the facts of the case on the basis that an Occupancy Certificate had already been obtained before possession was handed over. The Appellate Tribunal compared this new contention with the promoter’s earlier written submissions and noted that the original defence had proceeded on the basis that delay in obtaining the Occupancy Certificate and other approvals was caused by Governmental inefficiencies and the COVID-19 pandemic as a force majeure event.
The Tribunal dismissed the review petition, observing that a review Court does not sit in appeal over its own order and finding no merit in the review. Before the High Court, the promoter’s sole submission was that the sale deed had been executed on 11.03.2020 and possession had been handed over on the same day pursuant to the Occupancy Certificate allegedly issued by the Grama Panchayat on 19.02.2020.
The Karnataka High Court noted that the Grama Panchayat Occupancy Certificate had admittedly been produced for the first time in Review Petition (K-REAT) No.8/2025. The Court examined the promoter’s original defence and found that it had initially attributed the delay in obtaining the Occupancy Certificate and other approvals to Governmental inefficiencies and COVID-19-related force majeure. In the review petition, however, the promoter relied upon the Occupancy Certificate dated 19.02.2020. The Court held that the promoter had clearly done a “volte-face” at the review stage, which justified rejection of the review petition.
The Court further found that only a photocopy of the alleged Occupancy Certificate had been placed before the Appellate Tribunal. No date was mentioned on the photocopy itself; the date 19.02.2020 appeared on top of the photocopy along with a number. The Court held that this did not establish that the Occupancy Certificate had actually been issued on that date. The promoter also did not produce the original Occupancy Certificate in the review proceedings, a fact which was not disputed by its counsel.
In these circumstances, the High Court found no reason to interfere with the Appellate Tribunal’s decision. It held that there was no question of law, much less a substantial question of law, arising in the appeal. The appeal was accordingly dismissed. The decision therefore upheld the dismissal of the promoter’s review petition, with the Court declining to accept the promoter’s changed defence based on the Occupancy Certificate produced for the first time at the review stage. The Court’s conclusion was confined to the material before it, particularly the promoter’s volte-face and the absence of the original Occupancy Certificate.
In the context of the statutory provisions considered in the proceedings, TaxGuru’s material on the RERA Act addresses the promoter’s responsibility to obtain the completion certificate or Occupancy Certificate under Section 11(4)(b). TaxGuru has also published material specifically discussing Occupancy Certificate requirements and the promoter’s obligation under Section 11(4)(b). Further, TaxGuru’s coverage of rights and obligations of allottees under Sections 11 to 19 is relevant to the statutory framework considered by the Appellate Tribunal.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
Though this matter is listed for admission, with the consent of learned Counsel for the parties, the matter is finally heard and taken up for final disposal.
2. Respondent Nos.2 and 3-allottees1 filed a complaint before the Karnataka Real Estate Regulatory Authority2 claiming delay period interest. The case of the allottees was that they entered into an agreement for sale dated 23.11.2019 for purchase of a Villa bearing No.36 in the project known as “Urban Serenity” developed by the appellant-M/s.Inner Urban Infrastructure Private Limited3 for total sale consideration of Rs.79,50,000/-.
3. In terms of the agreement for sale, the allottees were promised possession of the Villa on or before 15.01.2020 with a grace period of six months i.e. by July 2020. However, the promoter got executed the sale deed on 11.03.2020 in favour of the allottees but gave possession of the Villa only on 11.07.2020. However, there being no occupancy certificate, the project was incomplete. During the pendency of the complaint before the Authority, the promoter had produced alleged Occupancy Certificate4 claiming to have been obtained from the Competent Authority on 07.07.2021. Despite obtaining the OC, the project was nowhere near completion as several amenities were pending. Therefore the complaint was filed.
4. In its statement of objections, the promoter stated that the complaint was baseless. The alleged delay in handing over the possession was directly attributable to the allottees’ failure in adhering to the payment schedules as per terms of the agreement for sale. The delay in obtaining OC and other necessary approvals was solely caused by the inefficiencies of the concerned Government bodies due to the force majeure event of COVID-19 pandemic which caused unprecedented disruptions including labour shortages, supply chain interruptions and delays in statutory approvals, were unenforceable and beyond the control of the promoter.
5. By the order dated 05.06.2023 passed by the Authority, the complaint of the allottees came to be dismissed. Thereafter the allottees filed Appeal No.(K-REAT) 103/2023 before the Karnataka Real Estate Appellate Tribunal5 challenging the order of the Authority.
6. The Appellate Tribunal noted that the Authority had held that Real Estate (Regulation and Development) Act, 20166 cannot be applied retrospectively for agreements signed and executed prior to the commencement of the RERA Act. However, the Appellate Tribunal held that the facts of the case were contrary to the observations made by the Authority. The provisions of Sections 19 and 11 of the RERA Act were observed, which mandates the promoter to obtain a completion certificate/OC before handing over possession. It was held by the Appellate Tribunal that the promoter is not exempted from paying delay period interest merely because the sale deed was executed before obtaining the OC. Hence, the liability to pay delay payment interest continues till the date the OC is obtained and lawful possession is handed over. The various deficiencies in the electricity supply were noted by the Appellate Tribunal to observe that when the sale deed was executed in favour of the allottees, the construction of Villa was not completed in all respects. It was noted by the Appellate Tribunal that in three previous appeals between the promoter and other allottees, a joint memo was filed wherein the promoter agreed for releasing the amount from and out of the amount deposited with the Appellate Tribunal in compliance of the proviso to Section 43(5) of the RERA Act in favour of the allottees therein towards full and final settlement of interest for the delayed period. Accordingly, it was held that the promoter is liable to pay delay period compensation from the date of the sale deed till the date of the OC on 07.07.2021.
7. The promoter then filed a review petition bearing Review Petition (K-REAT) No.8/2025 before the Appellate Tribunal. In the review petition, an OC dated 19.02.2020 issued by the concerned Grama Panchayath was produced in respect of the property in dispute by the promoter seeking to distinguish the factual matrix of the instant case from other cases. The Appellate Tribunal noted the contents of the written arguments of the promoter made in the appeal, which reflected and found them to be contrary to the submissions being made in the review petition and dismissed the review petition and held that the review Court does not sit in appeal over its own order and also no merit was found in the review petition.
8. The sole submission advanced by the learned Counsel for the promoter is that the sale deed was executed in favour of the allottees on 11.03.2020 and possession of the Villa was handed over on the same day. It is contended that the OC was issued by the concerned Grama Panchayat on 19.02.2020, pursuant to which, possession was handed over to the allottees.
9. Admittedly, the OC of the Grama Panchayat was produced by the promoter for the first time in the Review Petition (K-REAT) No.8/2025 filed by it before the Appellate Tribunal against the impugned judgment dated 16.09.2025.
10. The Appellate Tribunal observed that given the fact that in the statement of objection filed by the promoter, the first and foremost defence was that the delay in obtaining OC and other necessary approvals was solely caused due to the inefficiencies of the Governmental Bodies and that the COVID-19 pandemic is a force majeure event which caused the delay, have now sought to change their version in the review petition contending that as far as Villa No.36 is concerned, they had procured the OC on 19.02.2020.
11. We have perused the impugned judgment dated 16.09.2025 of the Appellate Tribunal, as well as the order dated 27.11.2025 passed on the review petition filed by the promoter. In our opinion, as is evident from the order of the Appellate Tribunal, which has not been rebutted by the learned Counsel for the promoter, that initially their defence was taken of delay, which was sought to be attributed to various reasons including that of force majeure. However, admittedly in the review petition, the OC dated 19.02.2020 was filed by the promoter. Clearly, the promoter did a volte-face at the stage of review, which led to, justifiably, rejection of the review petition.
12. It is also pertinent to mention here that only a photocopy of the OC was placed before the Appellate Tribunal. There was no date mentioned in that. Only on top of the photocopy of the OC, along with a certain number, the date was shown as 19.02.2020. That would not mean that the OC was issued on that day. The fact that the promoter did not produce the original in the review petition is not disputed by the learned Counsel for the appellant.
13. For the reasons aforesaid, there is no question of law, much less, a substantial question of law arising in the instant appeal which is, therefore, dismissed.
Notes:
1 allottees
2 Authority
3 promoter
4 OC
5 Appellate Tribunal
6 RERA Act
