Builders can’t deny homebuyers refund for delayed projects citing payment defaults by the consumer, the Supreme Court has ruled. The apex court order comes as a major relief for harrowed homebuyers who often stop payments as their housing projects fails to meet completion deadlines.
Passing its judgment in a case where a buyer has purchased a unit in the Royal Heritage project in Sector-70, Faridabad, the top court directed the builder to refund the amount paid by homebuyers, along with delay compensation at the rate of 8%/annum. The builder has to pay the amount within two months.
“This is on the condition that the amount due as determined shall be paid to the respondents within a period of two months. In case the balance amount is not paid to the respondents within a period of two months from today, it will carry interest at the rate of 12 per cent per annum,” the SC said.
In the present case, the buyers had filed a case in the consumer court and sought a refund of the amount paid to the builder. In its defence, the builder argued that the buyers had defaulted in making payments since 2014 and made no payment since 2016. He was thus in violation of Section 52 of the Indian Contract Act, 1872.
The builder had moved the SC after losing his plea in the National Consumer Disputes Redressal Commission (NCDRC). In its order, the NCDRC had directed the builder to refund the entire amount along with delay compensation at 10% interest per annum.
