In a strongly worded judgment that will resonate with thousands of aggrieved homebuyers across the country, the Supreme Court has directed BPTP Ltd, a developer to refund the money collected from a buyer with 18% annual interest, after finding that the builder had delayed possession for more than a decade and levied arbitrary charges. The Court held that while tribunals and consumer fora often restrict compensation to 9% interest, such a meagre amount would not meet the ends of justice in this case, where the builder had itself imposed an 18% penal interest rate on the buyer for delays in instalment payments.
In an order, a bench of justice Dipankar Datta and justice Augustine George Masih says, "In view of the conduct of the developer, it cannot be permitted to escape with a nominal liability for its default, while it charged interest at 18%pa (per annum) on default committed by BPTP. Although the rate of interest charged by the builder cannot be granted to the buyer as a rule of thumb, however, in the present case, equity and fairness demand that BPTP be put to the same rigours for charging 18% interest and face consequences similar to those imposed on the appellant for the default committed by him. If we hold otherwise, we will be perpetuating a manifestly wrong bargain. We, therefore, substitute the rate of interest awarded by the NCDRC and increase it from 9% to 18% per annum, while keeping the other terms intact. Respondent shall refund the requisite amount within a period of two months from the date."
The case arose from a plot booked in March 2006 by Rajnesh Sharma in the ‘Park Land’ project of Business Park Town Planners Ltd, now renamed as BPTP, for a total price of Rs36.03 lakh. Mr Sharma made regular payments over several years and by 2015 had paid more than Rs43.13 lakh, which included not only the basic sale consideration but also a range of additional demands raised by the developer.
These included a higher charge for an alternative plot allotted in 2011 on the pretext of changes in the layout plan, enhanced external development costs, unexplained interest debits and other add-ons.
Although the agreement clearly stipulated that possession was to be given within 24 months of approval of service plans, the developer failed to deliver possession within the stipulated period and only offered an alternative plot in May 2018—twelve years after the initial booking—and that too subject to the buyer paying an additional Rs7.6 lakh towards heads like electricity and sewage treatment plant charges, utility connections, GST and stamp duty. Many of these charges were contested by the buyer as illegitimate since GST, for instance, was introduced only in 2017 when all his payments had already been made years earlier.
Having lost patience, Mr Sharma terminated the agreement in March 2017 and sought a refund along with interest and compensation for loss of appreciation in property value. When the builder refused, he issued a legal notice and later filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) in 2018.
The NCDRC, in January 2023, disposed of the complaint by directing the builder to refund the principal sum of Rs43.13 lakh with simple interest at 9% per annum and Rs25,000 towards litigation costs. However, the order was largely based on a concession made by the builder’s counsel during the hearing and did not analyse the merits of the buyer’s grievances. Aggrieved by this, the homebuyer approached the Supreme Court.
Before the apex court, the buyer argued that the NCDRC had erred in forcing upon him a refund with a paltry 9% interest when he had been made to suffer for over a decade despite paying nearly the entire consideration. He also highlighted that the builder had unjustly charged him 18% compound interest for alleged defaults, inflated the cost of the alternative plot allotted in 2011, demanded enhanced development charges not mentioned in the agreement, and even tried to levy GST retrospectively. In contrast, when it came to its own delays, the builder was let off with liability at a much lower rate, which was both unfair and illogical.
The builder, on its part, defended the NCDRC order and argued that compensation under the Consumer Protection Act required proof of actual loss. It claimed that tribunals and courts had generally awarded only 9% interest in such cases, citing previous judgments. The developer also attempted to justify the higher charges by pointing to the location of the alternative plot, electricity and sewage costs, and other contractual clauses.
Rejecting these arguments, the Supreme Court held that the developer’s conduct was ‘full of blemishes’ and that equity demanded parity between the rate charged by the builder and the compensation payable to the buyer. The Court noted that clause 7 of the agreement, which was invoked to allot an alternative plot in 2011, required a change mandated by a statutory authority, but the builder had not shown any evidence that such a requirement existed. Even then, possession of the alternative plot was delayed until 2018. The bench, comprising Justice Dipankar Datta and Justice Augustine George Masih, observed that the builder could not be permitted to escape with nominal liability for its defaults while having imposed steep interest on the buyer.
In its judgment dated 24 September 2025, the Supreme Court substituted the NCDRC’s order and increased the interest rate from 9% to 18% per annum while keeping the other directions intact. The Court directed the developer to refund the entire amount within two months.
This ruling is significant as it underscores that builders cannot exploit one-sided clauses to penalise buyers while evading accountability for their own failures. It also signals that courts are prepared to go beyond the standard 9% compensation when the facts show gross delay, harassment and inequitable treatment of homebuyers.
Last month, directorate of enforcement (ED) carried out searches on several premises, including offices of BPTP Ltd and the residences of the company chairman and managing director (CMD), Kabul Chawla, and whole-time director, Sudhanshu Tripathi in connection with an inquiry initiated under the Foreign Exchange Management Act (FEMA).
According to ED, the developer received foreign direct investment (FDI) from Mauritius-based entities in violation of prevailing FEMA rules and regulations. BPTP received Rs322.5 crore from CPI India Ltd and Rs215 crore from Harbour Victoria Investment Holding Ltd from Mauritius, the agency says.
