The Karnataka High Court has ordered the state government to recover homebuyers' money from the delayed Ozone Urbana project in Bengaluru within four months. This comes after the state government failed to recover the money after the Karnataka Real Estate Regulatory Authority (KRERA) passed the order for recovery from 2022 onwards.
According to the high court order, the homebuyers' grievance is the delayed execution of the Karnataka RERA order to recover the money by the state government. "The order shall be complied with within four months," the high court order uploaded last week said.
The Real Estate (Regulation and Development) Act, 2016, says that if a builder fails to pay compensation or refund money to homebuyers, the regulatory authority can issue a revenue recovery certificate (RRC), directing the state revenue department to initiate a recovery from the builder who has failed to deliver apartments to the buyers.
Legal experts say that once an RRC order has been issued, the deputy commissioner's (DC) office will recover the money from the developer as revenue from land arrears.
However, slow recovery from the state government has left homebuyers in limbo, including some who have invested crores of rupees.
Slow recovery
According to the latest data available, the revenue department has recovered only about Rs 26 crore from builders in the state as compensation or refunds to homebuyers for delayed delivery of apartments. An amount of more than Rs 245 crore remains to be recovered.
For the project Ozone Urbana, 114 orders involving over Rs 50 crore passed by KRERA remain to be recovered by the state government, Moneycontrol confirmed.
"More than about Rs 50 crore remains to be recovered from this project alone. The slow movement of recoveries has led several homebuyers — who have been waiting since 2020 — to approach the high court for relief," Akash Bantia, the advocate for the homebuyers, said.
Need for alternative solutions
Anil Kalagi, founder of the Bangalore City Flat Owners’ Association, who is also working with the DC office on this matter, said, "The major problem, in this case, is that the RRC orders attach the already delayed projects that are put on auction. Most of these projects today are incomplete or have land title issues without clear papers. Currently, the state government is facing a major challenge in auctioning such properties to recover the money."
Experts add that in states like Maharashtra and Uttar Pradesh, the RERA has taken suo moto action in recovery cases several times. However, in Karnataka, no such measures have been implemented since 2016.
"One of the viable solutions to this is that homebuyers should identify the auctionable assets of the developers and submit the list to the tahsildars and DC office for attachment. In this way, the state government will be able to auction such assets and recover the money much faster," Kalgi added.
The lack of a recovery timeline, according to Dhananjaya Padmanabhachar, president of the Karnataka Home Buyers Forum, indicates that the state department is not doing its bit to assist buyers. He said that the state government needs to make this process time-bound for both the revenue department and the RERA.
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