Today, On 29th July, The Supreme Court upheld the decision requiring a builder to refund home buyers due to delays in the possession of their flats. The court emphasized the importance of timely delivery and held the builder accountable for the inconvenience caused to the buyers.
New Delhi: The Supreme Court, On Monday, upheld an order from the National Consumer Disputes Redressal Commission (NCDRC) requiring a developer to refund the full amount paid by home buyers for delayed possession of their flat.
A bench comprising Justices B R Gavai and Sandeep Mehta increased the interest rate from the NCDRC‘s 9 percent to 12 percent, emphasizing that the home buyers endured prolonged suffering through no fault of their own.
The bench stated,
“In our view, the commission should have awarded interest at the rate of 12 percent per annum, in accordance with clause 7(b) of the Agreement.”
The Supreme Court partially allowed the appeal, affirming the National Consumer Disputes Redressal Commission’s (NCDRC) directive for the developer to refund the entire amount deposited by the complainants-appellants. The bench, however, modified the interest rate, stipulating it should be 12 percent per annum from the date of each deposit until the refund is made.
Frustrated by the delay, the home buyers approached the NCDRC, seeking a refund of the entire amount paid at the current market value, with 24 percent annual interest from the booking date until payment, along with compensation.
The unpaid amount, as per this order, must be paid within three months from the date of the judgment.
The bench stated,
“We find that the learned Commission has rightly directed the respondent-Developer to refund the entire amount deposited by the complainants-appellants. However, we find that, insofar as the award of interest at the rate of nine percent per annum is concerned, the Commission was not justified in the facts of the case to award a lesser interest than even the one agreed upon in the agreement.”
The case facts revealed significant project delays, causing undue hardship to the home buyers through no fault of their own.
The bench noted,
“Despite making the entire payment, they were deprived of possession within the stipulated time,”
The home buyers had contested the NCDRC‘s September 29, 2022, order, which partially allowed their complaint and directed Parsvnath Developers Limited to refund the amount with 9 percent annual interest from the deposit date until the refund date.
In 2008, the developer launched the group housing project ‘Parsvnath Paramount’ at Subhash Nagar. The home buyers booked a 3BHK flat, paying around Rs 16 lakh on July 15, 2008, as the initial amount, with the rest following the payment plan. The flat-buyer agreement stipulated that the construction of the flat would be completed within 30 months from the commencement of construction of the specific tower, with an additional six-month grace period.
However, the developer failed to deliver the flat within the agreed timeframe despite timely payments. The home buyers made numerous attempts to contact the builder for updates but received no significant information.