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Sanjay Chaudhary and Anr. vs. Pioneer Urban Land and Infrastructure Ltd. and Anr.

Not available · 2024 INSC 300Decided 10 Apr 2024
Not available
Justice B.R. Gavai · Justice Sandeep Mehta

Background

Homebuyers had paid nearly 90% of the total sale price (about Rs. 2.21 crore out of Rs. 2.38 crore) for a flat, but the developer failed to hand over possession by the scheduled date. The National Consumer Disputes Redressal Commission partly allowed their complaint, directing a corrected account with delayed-possession compensation, but also permitted the developer to charge the homebuyers 9% annual interest on the balance amount from November 2017 until payment.

Decision Breakdown

The Supreme Court held that the Commission erred in allowing the developer, who was itself at fault for the delay, to charge interest on the outstanding balance from the homebuyers. It set aside that portion of the order, directed the developer to convey the outstanding amount within two months, and ordered possession to be handed over within 30 days of the homebuyers' final payment.

Lesson Learnt

A developer who has defaulted on the promised possession date cannot also profit by charging interest to the homebuyers on their pending balance payment; the burden of a builder's own delay should not be shifted onto the buyer.

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

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