Recent legal judgements indicate better days for home buyers

From penalties to refunds, the National Consumer Disputes Redressal Commission has passed several orders against builders for their failure to deliver projects. We examine this trend and its implications for home buyers

Justice may have been delayed but it has not been denied, for many home buyers who have faced protracted delays in getting their dream home, after making full payment to their builders. Several recent judgments/orders by the National Consumer Disputes Redressal Commission (NCDRC), have reignited the hopes of aggrieved home buyers and strengthened their trust in the judicial system


CompanyProject DetailCase detailJudgement/Orders
Parsvnath DevelopersParsvnath Privilege, Greater NoidaFlat booked by buyers in 2007, possession delayedTo repay Rs 47.5 lakhs, along with interest of 18% per annum.
Parsvnath Exotica, GhaziabadDelay in completion of projectRefund of entire amount paid by buyer, with interest of 12% per annum.
Jaypee GroupKalypso Court project, Noida ExpresswayDelay in possessionPenalty of interest at 12% per annum; Directed to hand over possession to buyer by 21st July, 2016, failing which, the builder has to pay a penalty of Rs 5,000 per day, per flat, till the project is completed.
UnitechHabitat Project, Greater NoidaFlat bought by buyers in 2006, possession delayedRefund of Rs 65.36 lakhs with interest of 18% per annum.
UnitechAspen Green project at SAS Nagar, MohaliPossession of plot (booked in December 2011) not given within the committed dateRefund of Rs 3.04 crore, along with 18% interest per annum.
Lodha Group and Shree Sainath EnterprisesLodha Luxuria, Thane; Fairfield buildingApartment not delivered, and sold to third party; Non-execution of agreement to sellRefund of the entire amount with 18% interest thereof and compensation of Rs 1 lakh.
Emaar MGF Land LtdHyderabad-based proposed projectFailure to hand over an apartment booked in 2008, in a proposed projectTo pay Rs 2 crore, along with an interest of 10% per annum from 2010.

Note: Information collected from various media reports


See also: Emaar MGF Land ordered to cough up Rs 2 crores as penalty

Legal and realty experts believe that the courts have finally realised that it is necessary to have a level playing field, between the developers and home buyers. Since there were several lacunae in the laws related to the safety of home buyers, the courts and the consumer tribunals, have adopted an activist approach in dealing with the issues between the builders and buyers.


Setting a strong legal precedent

“Home buyers who face delays in obtaining possession of under-construction properties, have been granted protection by the NCDRC in recent matters, including being granted interest on their deposits with builders,” points out Ameet Hariani, managing partner, Hariani & Co.

The NCDRC has also directed builders, to hand over possession within a fixed period of time, in some cases, he adds. “While the NCDRC’s orders can be challenged in the Supreme Court, they certainly present some relief to home buyers,” Hariani maintains.

“The recent judgments in the NCDRC cases will set an example, wherein, the buyers can no longer be taken for a ride by the builder,” agrees Parth Mehta, managing director, Paradigm Realty.


A win-win situation

The decisions by courts, are not only a victory for the buyers, but will also benefit the entire realty sector, as it could inculcate greater discipline and eliminate the trust deficit, between the buyers and the builders.

“With the Real Estate Regulation Act, 2016, coming into effect, it will re-establish buyers’ faith in the institution of law and help developers to function better in a more organised setup,” Mehta feels.

It is hoped that the Real Estate Act, with its checks and balances, will corporatise the real estate industry, lead to transparent pricing models and encourage genuine users to invest in under-construction projects, with the confidence that the projects will be completed on time and that their deposits will be protected.

“Of course, each matter has to be dealt with, on its own facts and there are certain situations such as force majeure, which, if proven, would allow developers the option to exit the project, merely by refunding the monies together with a certain specified rate of interest to the home buyers. Nevertheless, it is heartening to see that home buyers seem to have developed greater faith in the legal system and seem to be pursuing their cases in courts,” concludes Hariani.


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