‘Possession of flat to be handed over to appellants within 30 days’: Top Court quashes direction permitting developer to charge interest from home buyers on balance amount
Justices B. R. Gavai & Sandeep Mehta [10-04-2024]

Read Order: SANJAY CHAUDHARY AND ANR v. PIONEER URBAN LAND & INFRASTRUCTURE LTD. AND ANR [SC- CIVIL APPEAL NO(S). 1454 OF 2023]

Tulip Kanth 

New Delhi, April 13, 2024: The Supreme Court has come to the aid of aggrieved homebuyers by setting aside a direction passed by the National Consumer Disputes Redressal Commission whereby the respondent-developer was permitted to charge interest at the rate of 9% per annum on the balance amount.

The appeal in question was directed against the final order passed by the National Consumer Disputes Redressal Commission (Commission) allowing a consumer case and directing the opposite parties to issue a fresh statement of account, duly crediting delayed compensation of Rs 2433120 within one month of the judgment. On the balance amount (except stamp duty and registration charges), the opposite parties were asked to charge interest @9% per annum, from 14.11.2017 till the date of payment. The complainants were given a months’ time to deposit the amount. On settlement of the account, the opposite parties were to execute conveyance deed in favour of the complainants and handover possession of the unit, complete in all respect to them without any further delay.

The appellants were aggrieved by the direction passed by the Commission giving liberty to the respondent developer to charge interest @9% per annum on the balance amount (except stamp duty and registration charges) from November 14, 2017 till the date of payment from the appellants homebuyers.

The Division Bench comprising Justice B. R. Gavai & Justice Sandeep Mehta noted the admitted fact that that the appellants being the homebuyers, had made payment of 90% of the total sale consideration of the flat in question to the respondent-developer till 23rd June, 2014. The said amount ran to nearly Rs.2,21,56,942.42 (total consideration for 4111 sq. ft super area and amenities being Rs.2,38,20,932/-).

The respondent-developer failed to handover the possession of the flat to the appellants-homebuyers by the scheduled date i.e. March 16, 2014 upon which the consumer dispute came to be registered.

“In this background, we are of the view that the learned Commission erred in directing that the opposite party i.e. respondent-developer shall be entitled to charge interest @9% per annum from the appellants-homebuyers on the balance amount (except stamp duty and registration charges) from 14th November, 2017 till the date of payment. Thus, the said part of the impugned order whereby, the respondent-developer has been permitted to charge interest at the rate of 9% per annum on the balance amount is quashed and set aside”, the Bench held.

The Top Court directed the respondents to convey the outstanding amount to the appellants within a period of two months and upon payment being made, hand over the possession of the flat in question to the appellants forthwith and not later than a period of 30 days from the date of final payment being made.