In a major victory for flat buyers, the Supreme Court has ordered refunds, pre-EMI waivers, and timely possession of homes in a delayed Mumbai project. The ruling protects credit scores and sets a strong precedent against builder defaults.
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NEW DELHI: In a very important decision that can help many homebuyers across India, the Supreme Court has given a strong judgment in favour of flat buyers who were stuck in financial trouble because the builder did not follow the promises made in their agreement.
The case, Akshay Gupta & Ors. vs. ICICI Bank Ltd. & Ors. (Civil Appeal No. 1708 of 2023), was about a housing project in Mumbai. In this case, buyers were left helpless when the builder stopped paying the pre-EMI (pre-equated monthly instalment) on their behalf. Due to this, the bank started taking strict steps to recover money from the buyers, even though it was not their fault.
The bench, led by Justice Vikram Nath, made it clear that homebuyers should not suffer because of the builder’s mistake. The court gave many directions to protect the rights and financial situation of the buyers and gave a clear warning to builders who do not complete their promises.
The Supreme Court ordered the builder to repay all the pending dues to the bank, return the PEMI (pre-EMI) money paid by the buyers, and also give possession of the flats to the buyers. It also told the bank to update the buyers’ loan accounts, so their record shows “full repayment” and not “settlement.” This step helps protect their credit score and financial image.
This case started when buyers took big home loans from ICICI Bank to buy flats in a project by Rajsanket Realty Ltd. The builder had agreed to pay pre-EMIs until the flats were handed over. But after getting the loan money, the builder stopped paying the pre-EMIs and also did not give possession of the flats.
When this happened, ICICI Bank started legal recovery against the buyers in the Debt Recovery Tribunal (DRT), treating them like defaulters even though the buyers themselves had not missed any payments. The buyers were financially stressed and first went to the National Consumer Disputes Redressal Commission (NCDRC), but their complaint was dismissed. After that, they went to the Supreme Court.
The Supreme Court took the matter very seriously and even issued a bailable warrant against the builder. This strong step forced the builder to come forward and take part in settlement talks.
After many discussions, the court helped the three parties—the buyers, the builder, and the bank—reach a final settlement. The court made sure that the buyers should not carry the burden of the pre-EMIs which the builder had promised to pay. Since the builder failed to do that, the court ordered the builder to pay back the buyers for all pre-EMI amounts they had paid themselves after the builder defaulted. The builder also had to pay the pending pre-EMI directly to the bank so that the buyers’ loan accounts could be marked as fully paid.
The Supreme Court also made ICICI Bank a part of the settlement to reduce pressure on the buyers. The court directed the bank to waive all extra charges and give a 30% discount on the total pre-EMI amount, as long as the buyers immediately paid the remaining loan principal. This helped protect the buyers from paying unnecessary extra interest, which was not their fault.
Another big win for the buyers was the protection of their credit record. Since the bank had earlier started legal steps against them, their credit score could have gone down, making it difficult to get future loans. To stop this, the court asked the bank to change the loan status from “settled” to “repaid.” This is very important because a “settled” loan can badly affect a person’s credit score, but a “repaid” loan shows that the person paid everything properly.
The court also made sure that the buyers would finally get their flats. It gave a final date and ordered the builder to complete any remaining work and give possession of the flats by 31st March 2025. This was important because some other buyers in the same project had already got their flats, so the delay was unfair. The builder was also told to give proper receipts for all payments made by buyers, so there is no confusion in the future.
This Supreme Court judgment will now become a strong example for other cases where homebuyers suffer because of builders who don’t do what they promise. With thousands of such buyers all over India, this decision shows the Supreme Court’s clear stand on protecting consumer rights in real estate.
Advocate Alakh Alok Srivastava, who fought the case for the homebuyers, shared his thoughts on social media platform X and said,
“Such orders restore the common citizen’s faith in SC…There are many more buyers suffering similar ordeal in India. I hope the govt brings tough laws to tackle builders’ misdemeanour!”
This decision not only gave justice to the buyers but also gave a strong warning to builders and banks. It shows that the court will not allow common people to be exploited and will ensure fairness, accountability, and justice in India’s housing sector.
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