Builders to Pay Interest if Possession Not Delivered as Per Agreement to Flat Buyers: Supreme Court

New Delhi: A decision of the Supreme Court has tightened the noose on the builders. A bench of Justices Uday Umesh Lalit and Indu Malhotra made it clear in its judgment that the unilateral agreement and arbitrariness of the builder will no longer work because when the home buyer is not able to pay installments or arrears, the builder imposes a fine on him that he is obliged to pay, so why no fine on the builder when he is unable to deliver the possession of house/flat on time? Also Read – Centre Requests Supreme Court to Keep Adultery a Crime in Armed Forces, Bench Agrees to Examine Matter

The Supreme Court in a recent verdict held that the flat buyers are entitled to compensation for “delayed handing over of possession” and for the failure of the developer to fulfil their promises with regard to amenities. The top court set aside the verdict of the National Consumer Disputes Redressal Commission (NCDRC) which, on July 2, 2019, 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. Also Read – SC Suspends Farm Laws, Forms Panel to End Deadlock; Farmers Say Will Not End Protest | Key Points

The bench said the flat owners are entitled to the compensation in excess of the amount stipulated in their agreements with the developers. Also Read – Supreme Court Forms Panel To End Farm Law Protests: All You Need To Know About The Members

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, it said.

The compensation amount shall be in addition to the money which has been paid over or credited by the developer at the rate of Rs 5 per square foot per month at the time of the drawing of final accounts, it said. The top court asked developers to pay the compensation within a period of one month from the date of this judgment and cautioned that failure in making payment, shall carry interest at the rate of nine per cent per annum until payment.

(With inputs from agency)