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Section 12: The RERA 2016

By: Shivendra Pratap Singh
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Section 12: Obligations of promoter regarding veracity of the advertisement or prospectus

Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:

Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.

Scope of section 12

Section 12 provides a remedy to the buyer if he has been deceived by the builder. If the builder made a false promise, prepared frivolous prospectus or advertisement about his apartment, building or plots then he shall return entire investment of the buyer along with interest. 

Deception from the builder or promoter

Deception is the ground for invoking section 12 of the RERA. The promoter may deceive the buyer in any of these ways:

  1. Giving incorrect information towards the real estate project,
  2. Making false statement
  3. Exhibiting a false model apartment or flat

Section 19 of RERA gives some rights to the buyer. The buyer has the right to get true information about the sanctioned plan, approval, layout etc. If promoter gives false information about the project the buyer can claim refund of money. The buyer can claim refund under section 12 & 18 of RERA. Both sections are giving same right but grounds for claiming refund are different.

Section 12 gives right to claim on the ground of deception where Section 18 gives the same right on the basis of delay in giving possession. When element of deception, fraud, false information, inducement by making false promise exist the buyer can claim under section 12 to refund the advance or booking amount.

Return of entire investment along with the interest

The buyer has a right to claim the whole investment along with the interest at such rate as prescribed under the RERA. Buyer sustains loss or damages if the builder gives false statement or incorrect information regarding the building or apartment. It is in the interest of buyer to give him an option to withdraw from such project and get entire investment along with interest. Consequently, section 12 of the RERA Act effectively protects the interest of buyer. 

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