Supreme Court: Builders cannot delay delivery of flats to buyers

The Supreme Court has held that a property developer cannot delay the grant of possession of flats to the buyers beyond the period of contract and if there is a delay, the buyers are entitled for refund of their amount.

A three-judge bench of Justices Dipak Misra, Amitav Roy and A.M. Kanwilkar on Wednesday ordered refund of the principal amount, taking note of the “voice of anguish” of the respondent-allottees that they have lost their entire savings and were waiting for the flats for more than seven years. The bench directed Unitech Residential Resorts Ltd. in the capital to refund the principal amount to the tune of Rs 17 crores to 39 allottees who were denied possession of their flats within the stipulated time.

In its ruling, the bench said, “It needs no special emphasis to state that the property developer has to respect the contractual commitment. It has to live up to the terms of the contract and gain trust so that the people who dream of houses can repose faith in him. Not for nothing, it has been said, ‘the foundation of any economy is faith and if faith is lost, everything is lost’. There is a saying, ‘Rome was not built in a day’, but it is in the realm of a metaphor.”

“The appellant builder by delaying or procrastinating the completion of the flats cannot base its stand on excuses or any subterfuge to advance the stand that the constructions take time. The submission in a way rests upon the metaphor that ‘Rome was not built in a day’, but it serves no purpose. It is ‘flat’ or ‘money’. And nothing else.” The bench pointed out that the 39 respondents collectively make a demand for refund of money because they have fought the litigation with ceaseless vigour and enormous hope.

Rejecting the submission of the Unitech that possession of flats will be granted from April 2017 onwards, the bench pointed out that counsel for the respondents and some of the respondents who are personally present are not in a position to accept the said method of solution.

It said “the voice of anguish is echoed in the court room as they say their dreams have been shattered and they have been constrained to pave the path of impecuniosity. The respondents are not interested in taking the flats. They are fundamentally interested to get their money back with interest and compensation.”

On August 17, the Bench had directed Unitech to deposit Rs. 15 crores in the apex court Registry. Taking this into consideration, the Bench asked Unitech to deposit another Rs. 2 crores and the total amount of Rs. 17 crores will be distributed by the Registry to the 39 respondents. The Bench said the question of award of compensation and interest on the principal amount will be considered by the court at its next hearing on January 11, 2017.