In a significant ruling on Monday, the Supreme Court upheld the National Consumer Disputes Redressal Commission’s (NCDRC) decision requiring a developer to refund the entire amount paid by home buyers due to delayed possession of their flat. The apex court also increased the interest rate from 9% to 12% per annum, emphasizing that the buyers had suffered unduly through no fault of their own.
The bench, led by Justices B R Gavai and Sandeep Mehta, responded to an appeal against the NCDRC’s September 2022 verdict involving Parsvnath Developers Limited. The developer had launched the ‘Parsvnath Paramount’ project in Subhash Nagar in 2008, promising a 3BHK flat within a 30-month construction period with an additional six-month grace period. However, the project faced significant delays, leading to the buyers not receiving possession within the expected timeframe despite making full payments.
Justice Gavai noted, “In our view, the commission, at least, ought to have awarded interest at the rate of 12 percent per annum in view of clause 7(b) of the Agreement.” This adjustment reflects the court’s stance that the original 9% interest rate was insufficient given the extent of the delay and the financial and emotional impact on the buyers.
The ruling specified that the adjusted interest rate should apply from the date of each respective deposit until the refund is fully paid, which must occur within three months from the date of the judgment. This decision underscores the court’s commitment to enforcing contractual obligations and protecting consumer rights in real estate transactions.
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The home buyers initially sought a refund of the full amount paid, along with an interest rate of 24% per annum, citing the severe delay and lack of communication from the developer as justification for such compensation. Their plight highlights widespread issues within the real estate industry, where delays in project completions and lack of developer accountability often leave buyers in precarious financial situations.
