In a first, the Karnataka Real Estate Authority (KRERA) has asked the Bengaluru-based Ozone Group to repay a homebuyer’s home loan of Rs 65 lakh after failing to provide possession.
In this case, the homebuyer Malarselvan Tamilmani booked a flat in Ozone Urbana Aqua II under a buyback scheme with guaranteed returns within 24 months in 2015. The homebuyer signed an agreement under the subvention scheme with Indiabulls Housing Finance and the developer in 2015.
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A subvention scheme in real estate is a grant or aid that a developer offers to buyers to help boost sales. In a subvention scheme, the buyer pays a portion of the cost upfront, and the bank pays the rest as a loan. The developer then receives the loan to continue construction.
The developer was to pay pre-EMI for the home loan, taken under the buyer’s name, until possession of the apartment or completion of the buyback period.
However, according to the homebuyer, the developer had stopped paying pre-EMI to the financial institution and had blamed the buyer as the defaulter. Following that, he approached KRERA to refund the entire amount with interest and closure of the home loan.
Ozone denied all allegations
In total, the buyer paid an initial deposit of Rs 18.8 lakh with a guaranteed double return. The developer had paid Rs 47.1 lakh to Indiabulls Housing as an initial deposit but failed to close the home loan with the financial company.
“The buyer had entered into the buyback scheme and according to the triparty agreement signed between the parties, in case of cancellation of the agreement the lending company will obtain the funds received by the developer in the construction of the flat,” the developer told KRERA.
However, the buyer said that out of the total loan sanction of Rs 75 lakh, about Rs 64 lakh has been disbursed to the developer. “The developer was supposed to bear the pre-EMI and also the loan amount, and there was no liability on the buyers,” he told KRERA.
KRERA makes Ozone Group liable for the home loan
The authority noted that a Karnataka High Court case filed by the buyer in 2023, ordered the developer to pay the pre-EMI and also asked IndiaBulls to stop taking coercive action on the buyer.
KRERA noted that while the Ozone Group had promised to return an assured profit to the homebuyer, they failed to close the home loan with Indiabulls Housing.
“Thus the developer is liable to repay the loan amount with interest and other charges levied by the financial institution,” the authority said. Additionally, KRERA pointed out that during the course of the Karnataka High Court hearing, the developer had agreed to close the home loan with interest.
“Thus the developer is liable to pay Rs 64.6 lakh to IndiaBulls Housing with interest and additional charges and clear the buyers of all liabilities,” the order said.
A list of questions sent to the Ozone Group did not get any response.
