Homebuyer Can Seek Refund If Possession Is Delayed Beyond One Year: Consumer Court
In a judgment that brings relief to millions of home-buyers, a consumer court has ruled that a home buyer is well within his rights to demand refund of the entire amount paid, along with a nominal interest rate, if the flat has not been delivered even after a delay of one year from the promised date.
This is probably the first time that a clear time frame has been set by any judicial or quasi-judicial authority. Millions of home-buyers are often resigned to their fate when developers keep postponing the delivery of homes sometimes by several years. Several cases, especially in the National Capital Region (NCR), have ended with tragic consequences for the home-buyers.
In a landmark order, Prem Narain, presiding member of the National Consumer Disputes Redressal Commission (NCDRC), New Delhi, earlier this month gave relief to Shalabh Nigam against the builder Orris Infrastructure Pvt Ltd.
The said builder was supposed to complete the construction work and hand over the physical possession of the flat that Shalabh Nigam had booked and for which he had nearly paid the entire amount.
As per the agreement, "the complainant was supposed to be handed over the possession within 36 months with a grace period of six months from the date of allotment and the allotment is dated 24 August 2012, according to the NCDRC. Possession was due in February, 2016.
"Clearly the builders have not been able to complete the project in time and deliver the possession of property in question to the complainant in time as per the allotment letter or the apartment buyer agreement,’’ the bench observed. ``It is now clearly established that the allottees have a right to ask for refund if the possession is inordinately delayed and particularly beyond one year."
The builder had promised that possession will soon be handed over and all common amenities of the project along with the facilities will be completed by 2014. The complainant has paid a sum of Rs88.96 lakh and this amount is reflected in the statement of accounts dated 14 May 2016, it said.
The builder extended various reasons for the delay, most of which the bench rejected.
"It was argued that total consideration of the apartment is Rs97.06 lakh and if the allotment is cancelled, and refund is ordered, then Opposite Party (the builder) is entitled to forfeit 10 per cent of this amount as earnest money as per the agreed clause," it said citing a clause in the agreement. The bench rejected this contention too. The buyer had made timely payments on all its earlier instalments.
In its order the bench told the builder to complete the construction work and hand over the physical possession of the flat complete in all respects as per agreement till 30 September 2019 after obtaining the occupancy certificate.
It also directed it to pay interest at a rate of 6% per annum (pa) on the amount deposited by the home-buyer from the due date of possession till the actual date of giving possession.
For the amounts paid after the due date of possession, the interest shall be payable from the date of completion of one year from the date of deposit till the date of physical possession. The receivables of compensation in the form of interest at 6% shall be adjusted at the time of possession before any due amount is taken from the complainant by the builder, it said.
If, however, the builder is unable to deliver the flat by 30 September 2019, the buyer shall be at liberty to take refund of the total deposited amount along with interest at 10% per annum from the date of the respective deposits (from or after 5 September 2012) till actual payment, which the builder will have to pay within six months.
If the homebuyer does not ask for refund, he shall be entitled to get interest at 6%pa as already ordered till possession is given, the bench declared.