Sushma Buildtech Refund- HighCourt Execution Update

Builder Offers 50% Refund; High Court Orders Unfreezing of Bank Account

In a significant development in a real estate dispute, the Punjab and Haryana High Court ordered the unfreezing of a bank account belonging to a real estate developer after the builder agreed to partially refund homebuyers.

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Background of the Case

The case involved Sushma Buildtech Limited, which was facing multiple complaints from homebuyers regarding possession delays and refund claims in its Zirakpur housing project.

Earlier, the State Consumer Disputes Redressal Commission, Chandigarh had directed the builder to refund the entire amount paid by the buyers along with interest, compensation, and litigation costs.

Following this, execution proceedings were initiated, and the commission ordered the attachment of the builder’s project and bank account.


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High Court Proceedings

The builder approached the High Court challenging the attachment orders. During the hearing, the builder offered to refund 50% of the principal amount to the homebuyers within a specified timeline.

The Court took note of this undertaking and observed that continued attachment of the bank account would prevent the builder from generating funds to meet its liabilities.


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Court’s Order

The High Court passed a balanced order:

Directed unfreezing of the builder’s bank account

Allowed the builder to operate the account and continue project-related activities

Accepted the builder’s commitment to refund 50% of the principal amount


Payment Timeline:

25% within 2 months

Remaining 25% within 4 months


The Court also warned that failure to comply with this undertaking could lead to contempt proceedings under Article 215 of the Constitution of India.


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Key Observations

The Court noted that:

The earlier attachment orders were passed without proper service of notice and due process

The builder should be given an opportunity to comply with refund obligations

Unfreezing the account would enable the builder to generate revenue and fulfill its commitments



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What Happens Next?

For the remaining amount beyond 50%, the Court directed the parties to appear before the consumer commission on a scheduled date to raise further claims and grievances.


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Significance of the Judgment

This decision reflects a balanced judicial approach, ensuring:

Protection of homebuyers’ interests

Practical relief to the builder to enable repayment

Enforcement of accountability through strict timelines


It also highlights that courts may relax coercive measures like account attachment if the developer shows bona fide intent to repay.


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Conclusion

The Punjab and Haryana High Court’s order demonstrates that while developers must be held accountable, courts can adopt a pragmatic approach to ensure actual recovery for buyers. By allowing partial unfreezing of accounts against a refund commitment, the Court aimed to strike a fair balance between enforcement and feasibility.