In a significant ruling on buyers’ right to refunds, the Gujarat Real Estate Regulatory Authority (GujRERA) has directed developers of a stalled commercial project in Surat to return invested amounts along with 9% annual interest.The order, issued in April, came after multiple complaints from buyers who had booked shops in the Tulsi Patra Residency project, which was de-registered in 2021 due to financial difficulties, leaving the project incomplete.
The case involved seven buyers, including Vijaykumar Bapodariya and Ramjibhai Bapodariya, who had collectively invested lakhs of rupees, with individual payments ranging from around Rs 22 lakh to over Rs 41 lakh. Despite substantial payments, construction work came to a halt. The developers later sought de-registration of the project, which was approved by GujRERA.
During hearings, the developers argued that GujRERA lacked jurisdiction after de-registration and claimed the funds received were unsecured loans rather than booking amounts, as no formal sale agreements had been executed. They attempted to classify the buyers as unsecured creditors instead of allottees.
Rejecting these arguments, the Authority held that its jurisdiction applies to projects that were required to be registered. It found sufficient evidence — including bank records, allotment letters, and receipts — to establish the buyers’ status as allottees.
Invoking provisions of the RERA Act, GujRERA ruled that the buyers were entitled to refunds as the project could neither be completed nor possession granted.
The Authority ordered the promoters to repay the principal amounts with 9% interest per annum and also initiated action against them for failing to disclose allotment details during the de-registration process.