The Supreme Court on Monday upheld a National Consumer Disputes Redressal Commission (NCDRC) order requiring a developer to refund the entire amount paid by home buyers due to delayed possession of their flats. The bench, consisting of Justices B R Gavai and Sandeep Mehta, increased the interest rate from the 9% awarded by the NCDRC to 12%. The court noted that the home buyers endured significant hardship through no fault of their own, stating, “In our view, the commission should have awarded interest at a rate of 12% per annum, in line with clause 7(b) of the Agreement.”
The bench confirmed the NCDRC’s directive for a full refund but modified the interest rate, specifying it should be 12% per annum from the date of deposit until the refund is made. The unpaid amount must be settled within three months from the date of this judgment. The court found that while the NCDRC’s decision to refund the entire deposit was appropriate, the interest rate of 9% was insufficient given the circumstances. The project was significantly delayed, causing undue suffering for the home buyers who had made full payments but did not receive possession within the promised timeframe.
The home buyers had contested the September 29, 2022 NCDRC order, which partly addressed their complaint by directing Parsvnath Developers Limited to refund the amount with 9% interest per annum. The buyers had booked a 3BHK flat in the “Parsvnath Paramount” project at Subhash Nagar in 2008, initially paying around ₹16 lakh. The agreement stipulated the flat would be completed within 30 months from the start of construction, with an additional six-month grace period. Despite this, the developer failed to deliver the flat on time, and the buyers, having made multiple inquiries without satisfactory updates, approached the NCDRC. They sought a refund based on the current market value, interest at 24% per annum, and compensation for the delays.