The Supreme Court ruled on November 9, 2022, to overturn the order of the National Consumer Disputes Redressal Commission (NCDRC). The order also mandated that the developer repay the Rs 2.25 crore deposit within a year and pay simple interest at 12% annually.
The Supreme Court has ordered Lodha Crown Buildmart, a division of the publicity, traded real estate company Macrotech Developers (Lodha), to reimburse a homebuyer for Rs 2.25 crore within a year and to add a 12 percent annual simple interest rate. The reimbursement relates to the purported hold-up in getting a 1,966-square-foot apartment bought in November 2013.
Venkataraman Krishnamurthy paid Rs 7.55 crore for the 4-BHK apartment in the Lodha Evoq development in Wadala, Mumbai’s New Cuffe Parade. A homebuyer has paid Rs 2.25 crore per the payment schedule, with the remaining Rs 5.83 crore to arrive upon the start of fit-outs.
The flat would be delivered to the buyer for fit-outs by June 30, 2016, or, with a grace period, by June 30, 2017, according to the agreement signed between the buyer and the developer. The buyer accused the developer of breaking the contract when they did not deliver the apartment by the deadline for fit-outs.
The homebuyer approached the National Consumer Disputes Redressal Commission (NCDRC) and prayed for a refund of the amount paid with compound interest thereon at 18 percent per year, along with compensation for the harassment, mental agony, and torture suffered by them, apart from litigation costs.
On November 9, 2022, the NCDRC resolved the consumer complaint from the homebuyers and directed the developer to give the unit its actual physical possession within three months.
The NCDRC mandated the developer provide delay compensation in the form of simple interest at a rate of six percent annually on the total amount paid between June 30, 2016, the date of the commitment to take possession, and November 29, 2017, the date of the offer to take possession.
The NCDRC denied the buyer’s request for a refund, finding that the delay was not “unreasonable” and the buyer could still terminate the contract and seek a refund despite acknowledging that there was “some delay” in the developer giving the buyer possession of the apartment.
Following that, the homeowner appealed the NCDRC order to the Supreme Court.
According to a ruling by the Supreme Court on February 22, Clause 11.3 of the agreement stipulates that if the developer fails to deliver the apartment for fit-outs on time, they must notify the buyer within 30 days of the grace period ending. This notice must specify the updated date when the unit should be ready for possession and, if the buyer agrees, the contract extension.
In its decision against the NCDRC, the Supreme Court stated, “It was not for the NCDRC to rewrite the terms and conditions of the contract between the parties and apply it subjective criteria to determine the course of action to be adopted by either of them.”
Without reservation, the Supreme Court that the NCDRC had overreached its jurisdiction and authority when it ignored the legally binding covenants in the agreement and used its logic and reasoning to decide what would be best for the parties and the homebuyers moving forward.
The SC allowed the complaint, setting aside the NCDRC order dated November 9, 2022, and ordering the developer to reimburse the deposited amount of Rs 2.25 crore within a year, plus simple interest at 12 percent annually. This type of installment has a first installment due on April 5, 2024, and subsequent installments are due on the fifth of each calendar month until they are paid in full.