The Real Estate (Regulation And Development) Act, 2016 – Interest Dharma By CS Kiran Sharma


INTRODUCTION:

The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal. The bill was passed by the RajyaSabha on 10 March, 2016 and by the LokSabha on 15 March 2016. The Act came into force on 1 May, 2016 with 59 of 92 sections notified[1]. Remaining provisions came into force on 1 May, 2017. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.[2] Real Estate Regulatory Authority (RERA) Bill was introduced by the UPA 2 government in 2013.
 
The delay in possession of the homes to be provided by the builders has been the biggest concern for the buyers of the real estate properties. For many of the homebuyers, across locations and with almost the builders, the delay has extended to almost six years or more now, with no possession in sight. In the absence of a regulator and with no rules in place, the builder-buyer battle appeared one-sided and RERA has become effective in full force.
 
The Apex Court of India in the recent case of ‘Jaypee Infratech Limited-a company undergoing corporate insolvency resolution process’ had provided much relief to the homebuyers under the purview of the ‘Insolvency and Bankruptcy Code, 2016’ (hereinafter, ‘Code’) by providing them the stature of a ‘financial creditor’ under the provisions of section 5(7) of the Code. As a financial creditor, the homebuyers are entitled to participate in the process and decide the fate of their entitled rights and privileges.
 

NAME OF THE STATE/UNION TERRITORY

PARTICULARS OF THE RULES

CHAPTER/PART

PROVISIONS FOR RATE OF INTEREST

REFERENCES

GUJARAT

COMPARITIVE COMPILATION OF Real Estate (Regulation and Development) Rules, 2017 – STATE WISE

 

Gujarat Real Estate (Regulation and Development) (General) Rules, 2017

CHAPTER IV

 

RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

Rate of interest payable by the promoter and the Allottee:

 

(1) For the purpose of payment of interest under sections 12, 18 and 19 of the Act, the rate of interest shall be the contractual rate of interest as may be mutually agreed to between the promoter and the allottee.

 

Provided that the rate of interest chargeable from the allottee by the promoter, in case of default by the allottee, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default by the promoter.

 

(2) Where no contractual rate of interest is mutually agreed upon between the promoter and the allottee under sub-rule (1), the rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the rate which is prevalent as per existing directives of Reserve Bank of India i.e. Marginal Cost of Lending Rate (MCLR) the State Bank of India Prime Lending Rate plus two percent.

 

(3) For the purpose of sub-rule (1) and sub-rule (2), the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid

 

 

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UTTAR PRADESH

The Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016

CHAPTER V RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

Rate of interest payable by the promoter and the allottee:

 

15) The authority shall maintain a back-up, in digital form, of the contents of its website in terms of this rule, and ensure that such back-up is updated on the last day of each month. Timelines for refund.

 

16) Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, if any, becomes due.

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CHANDIGARH

Chandigarh Real Estate (Regulation and Development) (General) Rules, 2016

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee—

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two per cent.

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

16. Timelines for refund—

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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MAHARASHTRA

Maharashtra

Real Estate (Regulation and Development)(Registration of real estate projects, Registration

of real estate agents, rates of interest and disclosures on website) Rules, 2017

CHAPTER IV

RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND

TIMELINES FOR REFUND

18. Rate of interest payable by the promoter and the allottee-

 

The rate of interest payable by the promoters to the allottees or by the allottees to the promoters, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two percent:

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

19. Timelines for refund –

 

The refund of any amount which is payable by the promoters to allottees along with the applicable interest and compensation, if any, under the Act or the Rules and Regulations, shall be made by the Promoter to the allottee within thirty days from the date on which such refund along with applicable Interest and Compensation, becomes due and payable to the allottee:

 

Provided that, every instance thereof shall be reported by the concerned promoters within thirty days to the Authority.

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Daman and Diu

Daman and Diu Real Estate (Regulation

and Development) (General) Rules, 2016

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee-

 

The rate of interest payable by the promoter to the allottee or by

the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending

Rate plus two per cent:

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by

such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general

public

 

16. Timelines for refund.—

 

 Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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Dadra and Nagar Haveli

Dadra and Nagar Haveli Real Estate (Regulation and Development) (General) Rules, 2016

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee.—

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two per cent.:

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

16. Timelines for refund— Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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Andaman and Nicobar Islands

National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules, 2016

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee.-

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Funds based Lending Rate plus two per cent.:

 

Provided that in case the State Bank of India Marginal Cost of Funds based Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

16. Timelines for refund.-

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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Tamil Nadu

Tamil Nadu Real Estate (Regulation and Development) Rules, 2017

CHAPTER V

 

RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

18. Rate of interest payable by the promoter and the allottee.-

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two per cent:

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

 

19. Timelines for refund.-

 

(1) Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within Ninety days from the date on which such refund along with applicable interest and compensation, if any, becomes due.

 

(2) In case of termination of the agreement as per the terms recorded therein, such refund and/or penalty and/or compensation shall be made by the party-in-breach to the other party simultaneous to the execution of appropriate cancellation agreement and registration, if required. If the defaulting party fails to come forward for execution of registration agreement, the Authority shall have the right to execute such agreement on behalf of the defaulting party. The entitling allottee shall get full refund at any time if the builder has not followed the time schedule. The builder shall not keep 10% of the booked value of the property. If the allottee defaults in making timely payment as per terms of the agreement, the allottee shall not have the right of claiming any interest or compensation from the promoter.

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Madhya Pradesh

Madhya Pradesh Real Estate (Regulation and Development) Rules, 2017

Chapter V:

 

INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

17. Rate of Interest payable by the promoter and the allottee:

 

(1) The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the same.

 

(2) The maximum shall be prescribed by the Authority from time to time and published its website, which shall be determined by it based on the State Bank of India highest Marginal Cost of Lending Rate plus two per cent. The promoter and allottee are free to agree on a lower rate, if it shall be the same for both:

 

Provided that in case the State Bank of Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

(3) The maximum rate applicable shall be that which is prevalent at the time of signing the Agreement between the promoter and allottee, and shall remain the same throughout the validity of the agreement, unless the parties mutually agree to reduce the rate for both or unless directed to do so by the Authority. 

 

18. Timelines for refund.-

 

(1) Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within sixty days from the date on which such refund along with applicable interest and compensation, if any, becomes due.

 

 

 

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Delhi

National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules, 2016

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee.-

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Funds based Lending Rate plus two per cent.:

 

Provided that in case the State Bank of India Marginal Cost of Funds based Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

16. Timelines for refund.-

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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Andhra Pradesh

Andhra Pradesh Real Estate (Regulation and Development) Rules, 2017

CHAPTER-V RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

16. Rate of interest payable by the promoter and the allottee:

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India Prime Lending Rate plus two percent.

 

17. Timelines for refund:

 

 Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within fortyfive days from the date on which such refund along with applicable interest and compensation, if any, becomes due.

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Odisha

Odisha Real Estate (Regulation and Development) Rules, 2017

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

16. Interest payable by promoter and allottee:

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two per cent:

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

17. Timelines for refund-

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made there under, shall be payable by the promoter to the allottee within fortyfive days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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Bihar

 

 

 

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Rajasthan

Real Estate (Regulation and Development)

Act, 2016

CHAPTER - V

Rate of interest payable by Promoter and Allottee and timelines for refund

17. Rate of interest payable by the promoter and the allottee.-

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest marginal cost of lending rate plus two percent:

Provided that in case the State Bank of India marginal cost of funds based lending rates is not in use it would be replaced by such benchmark lending rates which the State Bank of India may

fix, from time to time, for lending to the general public.

 

18. Timelines for refund.-

(1) Any refund along with the applicable interest and compensation, if any, payable by the promoter in terms of the provisions of section 18 of the Act shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with interest and compensation, if any, becomes due.

 

(2) In case the allottee proposes to withdraw from the project without any default of the promoter, before the completion of project, the interest and time period for refund shall be determined as per terms and conditions between the parties in agreement to sale.

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Jharkhand

Jharkhand Real Estate (Regulations and Development) Rules, 2017

CHAPTER - V

Rate of interest payable by Promoter and Allottee and timelines for refund

17. Interest payable by promoter and allottee:

 

The rate of interest payable by the promoter to the allottee to the promoter, as the case may be, shall be the State Bank of India, highest Marginal Cost of Lending Rate plus two percent.

 

18.  Timelines for refund:

 

Any refund of amounts along with the applicable interest and compensation, if any, payable by the promoter in terms of the provisions of the Act or the rules or the regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

 

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Uttarakhand

Uttarakhand Real Estate (Regulation and Development) (General) Rules, 2017

CHAPTER V RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two percent.

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use, it would be replaced by such benchmark lending rate which the State Bank of India may fix from time to time for lending to the general public.

 

16. Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made there under, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, if any, becomes due.

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Karnataka

Karnataka Real Estate (Regulation and Development) Rules, 2017

CHAPTER V RATE OF INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

16. Rate of interest payable by the promoter and the allottee-

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two percent.

 

17. Timelines for refund:

Any refund of money along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made there under, shall be payable by the promoter to the allottee within sixty days from the date on which such refund along with applicable interest and compensation, if any, becomes due

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Punjab

Punjab State Real Estate (Regulation and Development) Rules, 2017

CHAPTER V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

16. Interest payable by the promoter and the allottee-

 

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two percent:

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use, it would replaced by such bench mark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

17. Timelines for refund-

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within ninety days from the date on which such refund along with applicable interest and compensation, if any, becomes due.

 

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Chattisgarh

ChattisgarhState Real Estate (Regulation and Development) Rules, 2017

 

17. Rate of interest rate of interest payable of the promoter and the allottee.-

The rate of interest payable by the promoter to the allottee or bythe allottee to the promoter, as the case may be, shall be theState Bank of India Prime Lending Rate plus two percent.

 

 

 

 

 

 

 

18. Timelines for refund-

 

Any refund of money along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, if any, becomes due

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Haryana

Haryana Real Estate (Regulation and Development) Rules, 2017

PART V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

Interest payable by promoter and Allottee:

15. An allottee shall be compensated by the promoter for loss or damage sustained due to incorrect or false statement in the notice, advertisement, prospectus or brochure in the terms of section 12. In case, allottee wishes to withdraw from the project due to discontinuance of promoter's business as developers on account of suspension or revocation of the registration or any other reason(s) in terms of clause (b) sub-section (I) of Section 18 or the promoter fails to give possession of the apartment/ plot in accordance with terms and conditions of agreement for sale in terms of sub-section (4) of section 19. The promoter shall return the entire amount with interest as wellas the compensation payable. The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest marginal cost of lending rate plus two percent. In case, the allottee fails to pay to the promoter as per agreed terms and conditions, then in such case, the allottee shall also be liable to pay in terms of sub-section (7) of section 19:

 

Provided that in case the State Bank of India marginal cost of lending rate (MCLR) is not in use, it shall be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

Timelines for refund, section 9:

 

Any refund of money alongwith the applicable interest and compensationpayable by the promoter in terms of the Act or the rules and regulationsmade thereunder, shall be payable by the promoter to the allottee within aperiod of ninety days from the date on which such refund alongwithapplicable interest and compensation, as the case may be, becomes due.

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Telangana

Telangana State Real Estate (Regulation and

Development) Rules, 2017

CHAPTER – V INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee.—

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be highest Marginal Cost of Lending Rate of State Bank of India plus two per cent.

 

Provided that in case the Marginal Cost of Lending Rate of State Bank of India is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

16. Timelines for refund.—

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within ninety days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

 

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Himachal Pradesh

Himachal Pradesh Real Estate (Regulation and Development) Rules, 2017

CHAPTER – V

INTEREST PAYABLE BY PROMOTER AND ALLOTTEE AND TIMELINES FOR REFUND

15. Interest payable by promoter and allottee.—

The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two per cent as mentioned under section 12,18 and 19 of the Act.

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

Provided further if the allottee does not intend to withdraw from the project, he shall be paid by the promoter an interest which shall be the State Bank of India highest Marginal Cost of Lending Rate.

 

16. Timelines for refund.—

 

Any refund of monies along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within sixty days from the date on which such refund along with applicable interest and compensation, as the case may be, becomes due.

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Goa

Goa Real Estate (Regulation and Development) (Regulatory Authority Form of Annual Statement of Accounts and Annual Report) Rules, 2017

CHAPTER IV

 

Rate of Interest payable by Promoter and Allottee and Timelines for Refund

18. Rate of interest payable by the promoter and the allottee.—

 

The rate of interest payable by the promoter and the allottee shall be the State Bank of India highest Marginal Cost of Lending Rate plus two percent:

 

Provided that in case the State Bank of India Marginal Cost of Lending Rate is not in use it would be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public.

 

19. Timelines for refund.— The refund of any amount which is payable by the promoter to allottee along with the applicable interest and compensation, if any, under the Act or the Rules and Regulations, shall be made by the Promoter to the allottee within thirty days from the date on which such refund along with applicable interest and compensation, becomes due and payable to the allottee: Provided that, every instance thereof shall be reported by the concerned promoter within thirty days to the Authority.

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