In this post we will dicuss about the recent judgment of Supreme court wherein the Honourable court stated that purchasers are entitled to compensation for delayed handing over of their belongings and for the failure of the developer to meet its obligations with regard to amenities.
Flat buyers entitled to compensation for delayed possession: SC
SC: Providing amenities too responsibility of developers. Compensation for Delay in Possesion.
The Supreme Court held on Monday that flat purchasers are entitled to compensation for delayed handing over of their belongings and for the failure of the developer to meet its obligations with regard to amenities.The Supreme Court set aside the decision of the National Consumer Disputes Redressal Commission which, on 2 July 2019, rejected the arguments of 339 flat purchasers by holding that they were not entitled to compensation in excess of what was stipulated in their flat purchase agreements for delayed possession and lack of guaranteed facilities.
Facts of the Case
The purchasers had booked apartments with DLF Southern Homes Co., now known as Begur OMR Homes Co., in a project called Westend Heights in New Town, DLF, BTM Extension in Begu, Bengaluru. The project was built in an area of 27.5 acres and was to consist of 1980 units spread over nineteen buildings, each of which consisted of stilts and eighteen floors. They had moved the NCDRC to seek compensation on account of the delay in handing over possession of the apartments, the reimbursement of taxes and interest charged to the flat buyers under the agreement, the deficiency in the provision of amenities, the levying of electricity charges by the developer and the failure to build a clubhouse.
The NCDRC held that there was a delay in handing over of the apartments to the purchasers, but the agreements offered reimbursement at the rate of Rs 5 per square foot of the Super Region for each month of delay.The NCDRC also held that the flat purchasers who had agreed to this clause in the agreements were not entitled to claim any additional sums. We have come to the conclusion that the dismissal of the case by the NCDRC was incorrect. The flat purchasers are entitled to compensation for the delayed surrender of property and for the failure of the developer to comply with the representations given to the flat purchasers with regard to the provision of amenities.
The NCDRC ‘s reasoning on these aspects suffers from the obvious perversity and patent errors of law which have been noted in the earlier part of this judgment. Allowing the appeals in part, we set aside the challenged judgment and the order of the NCDRC dated 2 July 2019 rejecting the consumer complaint, according to the judgment of Judges DY Chandrachud and K M Joseph in its 53-page judgment. The Bank claimed that the flat owners are entitled to compensation in excess of the amount stipulated in their agreements with the developers.
Save and with the exception of eleven appellants who have entered into particular agreements with the developer and three appellants who have sold their property, title and interest under the ABA (Agreement), the first and second respondents (developers) shall pay to each of the appellants, as a form of reimbursement, an amount measured at a rate of 6% simple interest each year. The amount of the reimbursement shall be based on the cumulative amount of money charged for the purchase of the respective flats with effect from the date of expiry of thirty-six months from the date of execution of the respective flat purchase agreements to the date of the offer of possession upon receipt of the certificate of occupation.
In addition to the money charged or credited by the developer at the rate of Rs 5 per square foot per month at the time of drawing up the final accounts, the amount of the reimbursement shall be reported. The Court of First Instance ordered the developers to pay compensation within one month from the date of this judgment and warned that failure to make payment would result in interest being paid at a rate of 9% per year before payment has been received.
The Supreme Court held on Monday that flat-rate purchasers are entitled to compensation for “delayed handing over of ownership” and for the failure of the developer to fulfill its obligations with regard to amenities. The Supreme Court set aside the decision of the National Consumer Disputes Redressal Commission.
This post was written by Kasha Doshi
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