Builder Delaying Possession in Mohali or Zirakpur? Your Rights to a Refund and Interest Under RERA
Published June 2026 · By Vikram Singh & Associates, Advocates
You booked a plot or flat years ago. You paid on time, often through a home loan. The promised handover date came and went — and today there is still no possession, no completion certificate, sometimes not even a finished road or electricity connection. If this is your situation, the law is firmly on your side. Builder delayed possession is one of the most common property disputes in the Mohali, Zirakpur, Kharar and New Chandigarh belt, and RERA gives you clear, enforceable remedies.
This guide explains, from a buyer’s point of view, exactly what you can claim, what you cannot, and how recent rulings — including a 2025 Supreme Court decision arising from this very region — actually play out.
The “18% interest” myth: what you can really recover
Almost every aggrieved buyer walks in asking for 18% interest. It is worth being honest about this up front, because demanding the wrong number weakens your case.
Under the rules of the Real Estate Regulatory Authority, Punjab, interest on delayed possession is the State Bank of India’s highest marginal cost of lending rate (MCLR) plus 2%. In a recent Mohali matter that worked out to about 10.85% per annum — not 18%. Even so, 10.85% on everything you have paid, running for every month of delay, adds up to a serious recovery. Claim the correct rate so the order is clean and enforceable, instead of chasing a figure the Authority will not grant.
Your two core rights under Section 18 of RERA
When a builder fails to hand over possession by the promised date, Section 18 of the RERA Act gives you the choice — not the builder:
When is possession actually “delayed”?
The clock starts on the date promised in your allotment letter or agreement. The frequent excuse — “no date was ever fixed” — does not help the builder. Where the agreement is silent on a date, the Authority and the Supreme Court (in Fortune Infrastructure v. Trevor D’Lima) treat three years as a reasonable period for handover. A short grace allowance was also recognised for the COVID-19 months — a few months, not an open-ended licence to delay for years.
So if your provisional allotment was issued in, say, 2017, the deemed possession date falls around 2020–2021, and interest runs from there until you are actually handed a developed, usable property.
A real Mohali case: what one buyer won — and the trap to avoid
Consider a decided RERA Punjab matter from the Preet City project in Sector 86, Mohali. The buyer had paid Rs. 14,12,500 towards a plot. Over the years the builder unilaterally changed her plot — from a 10-marla plot to an 8-marla plot — and never offered valid possession. The Authority held that the promised possession date had long passed and directed the promoter to pay interest at 10.85% on the entire amount she had paid, running from the deemed possession date until valid possession is offered.
The Authority also found the builder had breached Section 13(1) of RERA by accepting more than 10% of the price without first executing a registered agreement for sale — and rejected the builder’s “we are a no-profit-no-loss society” defence, since it was in fact a private limited company.
In that same case the buyer had stopped paying her balance — so the Authority held both sides in default. The lesson: do not unilaterally stop your instalments and assume the delay cancels your obligation. Keep your own account clean, pay under protest if needed, and let the order net off the interest the builder owes you against any balance you owe. A buyer with clean hands gets the strongest order.
What the Supreme Court’s 2025 GMADA ruling means for you
In June 2025 the Supreme Court decided Greater Mohali Area Development Authority (GMADA) v. Anupam Garg (2025 INSC 808) — a case from GMADA’s “Purab Premium Apartments” scheme in Sector 88, Mohali. Essential reading for any GMADA-region buyer, and it cuts both ways.
Good for buyers: when an authority or builder fails to deliver on time, you can withdraw and recover your full deposit with interest as agreed. Public development authorities get no special concession over private promoters.
The realistic limits: where your agreement or letter of intent already fixes a delay rate, that agreed rate generally governs, and a forum can exceed it only for exceptional reasons. And the builder is not obliged to separately reimburse the interest you paid to your own bank on your home loan — the interest on your refund is treated as covering the delay.
Practical takeaway: read your allotment letter closely, claim the correct contractual or statutory rate, and do not assume your bank EMI interest is a separate recoverable head.
“Possession” has to be real — not a bare plot
Builders here often try to stop the interest clock by sending a paper “offer of possession” while the site is still undeveloped. Courts in Punjab have repeatedly held that handing over a plot or flat without basic amenities — electricity, roads, water, development — is not a valid offer of possession. Mere physical handover of an incomplete property does not count, and your delay interest keeps running until the property is genuinely usable. A clause saying you must take the unit “as is where is” does not defeat your right to delay interest.
How to file a RERA complaint in Mohali, Punjab
If you are stuck with a stalled project, a RERA complaint in Mohali is filed before the Real Estate Regulatory Authority, Punjab. The broad path:
- Gather your documents — allotment letter, all payment receipts and bank statements, the agreement (if any), the letter of intent, and every reminder or notice you sent.
- File the complaint under Section 31 of the RERA Act read with the Punjab Rules, setting out the promised possession date, the delay, and the relief you want (refund with interest, or possession with delay interest).
- Claim interest at the prescribed SBI MCLR + 2% rate, and flag any Section 13(1) breach if the builder took more than 10% without a registered agreement.
- Appear before the Authority — personally or through a property dispute advocate in Chandigarh — for arguments.
Common mistakes buyers make
From experience with these matters, the avoidable errors are almost always the same: stopping all payments without a clear legal footing; accepting a paper “possession” of an undeveloped plot; signing fresh documents that quietly change plot size or terms; demanding an unrealistic 18% and getting nothing in writing; and waiting years before taking formal steps while interest and limitation quietly work against you.
Frequently asked questions
Can I really get 18% interest?
Usually not. RERA Punjab awards SBI MCLR + 2% (around 10.85% recently). Where your agreement fixes a rate, that rate generally applies.
The builder never gave a possession date — am I helpless?
No. Three years from allotment is treated as a reasonable period, after which delay interest runs.
The builder offered me the plot but there is no electricity or road. Is that possession?
No. That is not valid possession, and your delay interest continues.
Should I keep paying my instalments?
Generally yes — keep your side clean, pay under protest if necessary, and let the final order adjust what each side owes.
Disclaimer: This article is for general information only and is not legal advice or solicitation of any kind. It does not create an advocate-client relationship. Outcomes depend on the specific facts of each case. Readers should consult a qualified advocate before acting on any information here.
