Supreme Court empowers home buyers

Supreme Court empowers home buyers
15/04/2019 , by , in News/Views

The Supreme Court recently paved the way for home buyers to claim refunds from builders in the case of unreasonable delay in handing over their homes – Kolkata West International City Pvt Ltd VsDevasisRudra.

In this case, the buyer paid Rs 39,29,280 in 2006 to the builder and as per the agreement the builder had to handover the flat in the last month of 2008, with a grace period of six months ending in June 2009. Despite the agreement, the buyer had to wait till 2011 when he decided to file a complaint before the West Bengal State Consumer Dispute Redressal Commission. By 2016, the buyer had waited almost seven years for possession. The builder sought the builder-buyer agreement to justify the delay which was rejected in the court.

The Apex Court in this case said, “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on March 29, 2016. This was nearly seven years after the extended date for handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified.”

However, it is still not easy for home buyers to claim refunds in case the project gets delayed for a period longer than reasonably expected. What can buyers do in cases where builders have no money to refund? In such cases, RERA can mediate and help buyers to either get their homes or refunds to avoid their loans being declared non-performing assets (NPAs) in the bank.

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