Refund payment to home buyers if delay in possession: Supreme Court

The Supreme Court on Monday, 29 July, upheld an order of the National Consumer Disputes Redressal Commission (NCDRC) directing a developer to refund the entire amount paid by the home buyers for delayed possession of their flat.

A bench of justices B.R. Gavai and Sandeep Mehta enhanced the rate of interest from 9 per cent awarded by the NCDRC to 12 per cent, saying the home buyers were made to suffer for long for no fault of theirs.

"In our view, the commission, at least, ought to have awarded interest at the rate of 12 per cent per annum in view of clause 7(b) of the Agreement. In the result, the appeal is partly allowed. The direction made by the commission for refund of the entire amount deposited by the complainants-appellants is upheld," the bench said.

It added, however, the direction with regard to interest is modified to the extent that it shall be paid at the rate of 12 per cent per annum from the date of respective deposit till the date of refund.

The unpaid amount in terms of the aforesaid shall be paid within a period of three months from the date of this judgment, it said.

"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 award of interest at the rate of nine per cent 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 bench said.

It said the facts of the case show that the project was delayed inordinately and the home buyers were made to suffer for long for no fault of theirs.

"In spite of making the entire payment, they were deprived of the possession within the stipulated time," it said.

The home buyers have challenged the 29 September 2022 order of the NCDRC by which it has partly allowed the complaint and directed the respondent, M/s Parsvnath Developers Limited, to refund the amount with interest at the rate of 9 per cent per annum from the date of respective deposit till the date of refund.

According to the complaint, the developer in 2008 launched a group housing project tired 'Parsvnath Paramount' at Subhash Nagar here.

The home buyers booked a 3BHK flat in the project and paid around Rs 16 lakh as initial amount on 15 July 2008 with rest amount as per the payment plan.

According to the flat-buyer agreement, the construction of the flat would have been completed within a period of 30 months of the commencement of construction of the particular tower in which the flat was located, with a further grace period of six months.

However, on the failure of the developer to hand over the possession of the flat within the expected deadline, despite timely payments, the home buyers made several attempts to contact the builder to enquire about the progress of the project, but received no substantial update.

Aggrieved by delayed possession, the home buyers moved the NCDRC, praying for a refund of the entire amount paid by them according to the current market value along with interest at the rate of 24 per cent per annum, thereon, from the date of booking the flat till the date of payment as well as compensation.