In a landmark ruling, the Karnataka Real Estate Regulatory Authority (KRERA) has directed Bengaluru-based Ozone Group to repay a homebuyer’s home loan of ₹65 lakh after failing to provide possession of the property. This unprecedented decision marks a significant step in safeguarding homebuyer interests and sets a precedent for future cases.
The dispute: failure to honor buyback scheme
The case began in 2015 when Malarselvan Tamilmani, a homebuyer, entered into a buyback scheme with Ozone Urbana Aqua II under a guarantee of returns within 24 months. The agreement was made under the subvention scheme with Indiabulls Housing Finance and the developer. This scheme was designed to ease the financial burden on buyers, where the developer covers the pre-EMI payments until possession of the property is given.
However, the homebuyer claimed that Ozone Group stopped paying the pre-EMI and instead blamed him for the default, leading to financial complications with Indiabulls Housing Finance. The developer’s failure to honor its obligations led Tamilmani to approach KRERA for resolution, seeking repayment of the entire loan amount along with interest.
KRERA’s landmark ruling
In its ruling, KRERA affirmed that the responsibility for the loan repayment lay solely with the developer. Advocate Akash Bantia, representing the homebuyer, highlighted the significance of the order, saying, “This is a significant order and one of its kind because, as per the tripartite agreement, the liability of the loan repayment is and always was on the builder.” The ruling is seen as a strong move to protect homebuyers, ensuring developers are held accountable for any financial obligations under such schemes.
Developer denies allegations
While Ozone Group has denied all allegations, the facts presented by the homebuyer and backed by the tripartite agreement were clear. The buyer initially paid ₹18.8 lakh, with a guaranteed return, and was assured that the developer would bear the pre-EMI on the ₹65 lakh home loan. However, the developer failed to clear the loan, leading to mounting liabilities for the buyer.
In total, ₹64 lakh of the ₹75 lakh sanctioned loan was disbursed to Ozone Group, but the developer neglected to repay or settle the home loan, creating further complications for the buyer. Despite the developer’s claim that the funds were invested in construction, KRERA held Ozone Group responsible for the financial misconduct.
Court ruling and KRERA’s verdict
KRERA’s ruling aligns with a Karnataka High Court decision from 2023, which instructed Ozone Group to pay the pre-EMI and halted coercive actions by Indiabulls Housing Finance. The authority concluded that Ozone Group is liable to repay ₹64.6 lakh to Indiabulls Housing with interest and additional charges, thereby relieving the buyer of all financial burdens.
Despite multiple inquiries, Ozone Group has yet to respond to KRERA’s order or the media.
