K-RERA: Higher Compensation When a Buyer Loses Both the Flat and Its Rise in Value
On 7 October 2026, K-RERA ordered Casagrand Lotus to pay Rs 5 lakh plus costs to a buyer whose Casablanca project flat was allotted to a third party after she paid the booking amount and no agreement for sale was signed. The officer said compensation may be higher where only a refund is ordered. What Bengaluru buyers should take from it.
On 30 December 2024, a Bengaluru homebuyer received an allotment letter for a 1,270 sq ft, three-bedroom apartment on the 14th floor of Tower 1 in Casagrand's Casablanca project, priced at about Rs 1.65 crore including GST. She sold another property to fund it and paid the booking amount the next month. No agreement for sale followed. On 30 October 2025, on a visit to the project, she found the flat had been allotted to someone else. On 7 October 2026, the Karnataka Real Estate Regulatory Authority awarded her Rs 5 lakh in compensation and set out a principle every buyer should know.
The order, in Nidhi Agarwal v. Casagrand Lotus Private Limited, Complaint No. 00877/2026, was passed by Adjudicating Officer Maheshwari S. Hiremath and reported by LiveLaw on 27 October 2026. This guide explains what K-RERA decided and how its reasoning on compensation applies to Bengaluru buyers. It is buyer guidance on a reported order, not legal advice for a particular dispute.
The short answer. K-RERA found that the developer accepted more than Rs 15 lakh without executing an agreement for sale and then allotted the flat to a third party. It awarded Rs 5 lakh for mental agony, financial loss and loss of opportunity, plus Rs 7,000 in litigation costs, payable within 60 days, with interest at MCLR plus 2 percent a year if paid late. The officer said compensation may be higher where only a refund is ordered, because the buyer loses both the flat and its rise in value. The trade-off: this route compensates loss, but it does not give the flat back, and the separate refund claim in this case was still pending, so a buyer should pursue both claims and keep proof of every payment.
What did K-RERA decide?
It ordered compensation against a developer that did not appear. According to the report, Casagrand failed to appear despite notice, and the authority proceeded ex parte. It found that the developer had unilaterally cancelled the buyer's allotment and allotted the apartment to a third party despite receiving substantial consideration, and that it had accepted money without executing an agreement for sale, in violation of RERA.
The buyer had sought Rs 15 lakh for mental agony, Rs 25 lakh for financial loss and loss of opportunity, and litigation costs. The authority awarded Rs 5 lakh in total for mental agony, financial loss and loss of opportunity, and Rs 7,000 towards litigation costs. The report says it directed payment within 60 days, with interest at the Marginal Cost of Funds based Lending Rate plus 2 percent a year from the date of the order until realisation if the deadline was missed. It clarified that the buyer's separate complaint for a refund with interest remained pending.
Why can compensation be higher when only a refund is ordered?
Because the buyer loses two things. The officer observed: "Where possession is eventually delivered, compensation may ordinarily be lower since the allottee receives benefit of appreciation. However, where refund alone is directed, compensation may be higher as the allottee is deprived of both, possession and escalation in value."
That reasoning matters in a city where buyers often book early. A buyer who eventually gets a delayed flat still owns an asset whose value may have moved. A buyer whose allotment is cancelled and who gets money back has neither the flat nor any change in its value. The order treats that second situation as one that can justify a larger award. It does not set any fixed figure, and the report says the authority explained that no fixed formula governs compensation for mental agony.
How did K-RERA work out the amount?
By looking at the money, the time and the lost returns. Referring to Section 72 of the RERA Act, the authority held, as reported, that the amount must account for the money paid, the period for which the developer retained it, and the returns the buyer could have earned had the funds remained available. It said: "Loss could be assessed on the basis of quantum of amount which complainant could have earned had the money been at his command."
It also acknowledged the limits of money as a remedy, describing compensation for mental suffering as "akin to applying a cooling balm on the burns", and said the forum should step into the shoes of the aggrieved as far as practicable. The table sets out the key figures from the report.
| Item | Figure in the report | What it was for | What a buyer should note |
|---|---|---|---|
| Apartment price | About Rs 1.65 crore including GST | 1,270 sq ft three-bedroom unit with one parking space | The value at stake when the allotment was lost |
| Money accepted by the developer | More than Rs 15 lakh | Booking stage payment | Paid without an agreement for sale being executed |
| Compensation claimed | Rs 15 lakh plus Rs 25 lakh | Mental agony; financial loss and loss of opportunity | Claims are assessed, not granted as asked |
| Compensation awarded | Rs 5 lakh plus Rs 7,000 costs | Mental agony, financial loss, loss of opportunity; litigation costs | Payable within 60 days |
| Late payment interest | MCLR plus 2 percent a year | From the order date until realisation, if the deadline is missed | Watch the 60 day deadline |
What went wrong before the complaint?
The agreement for sale was never signed. The report sets out the sequence. The allotment letter was issued on 30 December 2024 with a payment plan of 10 percent at booking, 30 percent in 2025 and the balance in instalments linked to construction from 2026. The buyer sold another property through a registered sale deed dated 18 January 2025 and paid the booking amount the next day. Despite repeated requests, the developer did not execute the agreement for sale. On 12 February 2025 it raised a revised demand of Rs 57.74 lakh instead of Rs 35 lakh.
On 28 June 2025, the buyer received an email asking for bank details to process a refund, although she had not asked to cancel. The developer then told her it had not cancelled the allotment. On 30 October 2025, during a project visit, she found the apartment had been allotted to another buyer. Our explainer on the limits on payments before a registered agreement explains why the missing agreement matters.
What does this mean for a Bengaluru buyer at the booking stage?
Push for the agreement early and keep a paper trail. In this case, the buyer had an allotment letter and payment receipts, which is what allowed the authority to find that money had been taken without an agreement for sale. A buyer who has paid a booking amount and is waiting for the agreement should write to the developer asking for it, and keep copies of every reply.
Treat unexpected emails seriously too. A refund email that you did not ask for, as in this case, is a signal to put your position in writing straight away: that you have not requested cancellation and expect the allotment to stand. If you need a different route to recover money after an order, our report on the Karnataka High Court upholding a recovery attachment shows how unpaid K-RERA orders are enforced.
It also helps to understand what the authority did not decide. Because the developer did not appear, the order does not record its side of the story, and the report does not say why the revised demand was raised or why the unit went to another buyer. Those questions may matter in the pending refund complaint. For now, the compensation order stands on the facts the buyer proved.
Does this mean every cancelled booking gets Rs 5 lakh?
No. The amount was set on the facts of this case, decided ex parte, and the report stresses that no fixed formula applies. What the order offers is a way of thinking: compensation can reflect the money paid, how long the developer held it, the returns the buyer lost, and whether the buyer has lost the flat as well as the money. A buyer preparing a claim should be ready to show each of those with documents. For a case where a Bengaluru buyer pursued a refund through appeal, see our report on a K-RERA refund and the Section 43 appeal.
A seven-point checklist if your allotment is at risk
- Keep the allotment letter, payment plan and every receipt in one file.
- Ask the developer in writing for the agreement for sale after you pay the booking amount.
- Reply in writing to any revised demand that differs from the agreed schedule.
- If you receive an unrequested refund email, state in writing that you have not cancelled.
- Visit the project and check the status of your unit if replies stop.
- Record the money paid, the dates, and what that money could have earned elsewhere.
- Take advice on filing both a refund claim and a compensation claim before K-RERA.
Frequently asked questions
What did K-RERA award in the Casagrand Lotus case?
According to LiveLaw, the Adjudicating Officer awarded Rs 5 lakh for mental agony, financial loss and loss of opportunity, plus Rs 7,000 in litigation costs, payable within 60 days, with interest at MCLR plus 2 percent a year from the order date if paid late. A separate refund complaint remained pending.
Why can compensation be higher when only a refund is ordered?
The officer said that where possession is eventually delivered the allottee gets the benefit of appreciation, so compensation may ordinarily be lower. Where refund alone is directed, the allottee loses both possession and the escalation in value, so compensation may be higher.
How did K-RERA calculate the compensation?
Referring to Section 72 of the RERA Act, the authority said the amount must account for the money paid, how long the developer kept it, and the returns the buyer could have earned had the money stayed available. It also said no fixed formula governs compensation for mental agony.
What should a buyer do if the agreement for sale is not signed?
Ask the developer in writing for the agreement after paying the booking amount, keep every receipt, and reply in writing to any revised demand or unrequested refund email. In this case, the missing agreement and the payment records supported the authority's findings against the developer.
Last updated 2026-11-04. PropNewz Team.
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