The Karnataka Real Estate Regulatory Authority has reaffirmed, in an order arising from a batch of complaints against developer Anantpura Habitat LLP, that the interest rate prescribed under Rule 18 of the Karnataka RERA Rules, the State Bank of India's highest marginal cost of lending rate plus two percent, applies equally in both directions, and that a builder-buyer agreement clause specifying a lower fixed interest rate payable by the developer for delay in possession, while retaining the full prescribed rate for any default by the buyer in making instalment payments, cannot be given effect to the extent of that asymmetry.
The Authority relied on the definition of 'interest' under Section 2(za) of RERA, which expressly requires that the rates of interest payable by the promoter to the allottee and by the allottee to the promoter be equal, and held that this parity requirement is a mandatory statutory floor that cannot be contracted around by a differently worded agreement clause, regardless of how the clause is framed.
In its order, K-RERA directed the developer to recompute the delay compensation payable to the complainant-allottees using the prescribed parity rate rather than the lower contractual rate, and to pay the resulting differential along with interest on the differential itself from the date each instalment ought to have attracted delay compensation.
The order is a straightforward but frequently overlooked reminder for both sides of the transaction: whatever rate a builder-buyer agreement quotes for delay compensation, the RERA rules' parity mandate operates as a statutory backstop that an allottee can invoke regardless of the agreement's literal wording.