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Kaushik Narsinhbhai Patel vs. M/s. S.J.R. Prime Corporation Private Limited

Not available · 2024 INSC 542Decided 22 Jul 2024
Not available
Justice C.T. Ravikumar · Justice Sanjay Kumar

Background

Forty-six flat buyers had booked apartments in a Bangalore residential project called "Fiesta Homes by SJR Prime." Under their construction agreements, possession was due by March 2014 (with a grace period), but the builder delayed handing over the flats by roughly four years, and the buyers also complained of construction deficiencies. They approached the National Consumer Disputes Redressal Commission (NCDRC) seeking compensation for the delay along with refunds of car-parking fees, legal fees, and other charges.

Decision Breakdown

The Supreme Court modified the NCDRC's compensation formula, holding that the buyers were entitled to interest at 6% per annum on their payments, calculated from the contractually due possession date until the date possession was actually offered, rather than being limited to the lower contractual penalty rate of Rs. 2 per square foot per month, following the approach it had previously adopted in a similar case. However, the Court declined to interfere with the NCDRC's rejection of the buyers' claims for refund of car-parking and legal fees, since those claims were not backed by adequate evidence. The appeal was thus allowed only in part.

Lesson Learnt

When a builder unreasonably delays handing over possession, buyers can secure court-ordered interest-based compensation calculated from the due date rather than being limited to a low penalty rate written into the contract, but any additional refund claims still need to be proven with proper evidence.

Official source (sci.gov.in)View Judgment (PDF)

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