Builders to pay interest if possession to flat buyers not delivered as per agreement: Supreme Court
The Supreme Court of India (SC) recently held that the flat buyers are entitled to compensation for "delayed handing over
Builders to pay interest if possession to flat buyers not delivered as per agreement: Supreme Court The Supreme Court of India (SC) recently held that the flat buyers are entitled to compensation for "delayed handing over of possession" and for the failure of the developer to fulfill their promises concerning amenities The Top Court recently has tightened the noose on the builders. A bench...
Builders to pay interest if possession to flat buyers not delivered as per agreement: Supreme Court
The Supreme Court of India (SC) recently held that the flat buyers are entitled to compensation for "delayed handing over of possession" and for the failure of the developer to fulfill their promises concerning amenities
The Top Court recently has tightened the noose on the builders. A bench of Justice Uday Umesh Lalit and Justice Indu Malhotra clarified that the unilateral agreement and arbitrariness of the builder shall no longer prevail. It stated that if the flat buyer fails to pay installments then the builder imposes a fine on them. The same rule shall apply to the builders if they are unable to deliver the possession of the flat on time
The SC set aside the decision of the National Consumer Disputes Redressal Commission (NCDRC). On 2 July 2019, the NCDRC had dismissed the complaints of 339 flat buyers by holding that they were not entitled to the compensation in excess of what was stipulated in their flat purchase agreements for delayed possession and the lack of assured amenities.
The SC in its recent judgment clearly stated that flat owners are entitled to compensation in excess of the amount stipulated in their agreements with the developers. It stated that the same rule shall apply to builders as it applies to the buyers in case of default.
It further clarified that the compensation amount shall be computed on the total money paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective flat purchase agreements until the date of the offer of possession after the receipt of the occupation certificate.
The compensation amount is to be paid in addition to the money that has been credited by the developer at the rate of Rs. 5 per square foot per month at the time of the drawing of final accounts.
The SC directed the builders to pay the compensation within a period of one month from the date of the judgment. It further directed that the builders should be cautioned that if they fail to make the payment then it shall carry interest at the rate of 9% per annum until paid.