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Builders have developed attitude of not fulfilling promises: Supreme Court

Published Oct 18, 2016, 7:24 pm IST
Updated Oct 18, 2016, 7:25 pm IST
The apex court was also informed that 854 flats were to be constructed in the project and 818 buyers had booked the flats.
 Supreme Court of India. (Photo: PTI)
  Supreme Court of India. (Photo: PTI)

New Delhi: Real-estate firms on October 18 got a rap on their knuckles from the Supreme Court for making tall claims to purchasers which remained unfulfilled due to inordinate delay in completing the housing projects.

"In this country, builders have developed an attitude to make committments to the purchasers and not fulfill them by delaying the projects," a bench headed by Justice Dipak Misra said.


The apex court's observation came after real estate firm Parsvnath Buildwell Pvt Ltd said it will give flats to 70 home buyers, who are before the court, by December 17.

"They (home buyers) do not have patience and trust in you and need refund. Money should go back to them and they should not suffer," the bench also comprising Justices Amitava Roy and A M Khanwilkar said.

The bench, also pulled up the realty firm for seeking time to deposit additional Rs 10 crore, asking "why do you get into all this business when you can't pay back the money You have to give back the money to home buyers."


Senior advocate Subramanian Prasad, appearing for the firm, said that as directed by the court, the company has deposited Rs 12 crore with the Supreme Court registry. The bench asked Supreme Court registry to disburse Rs 12 crore to the 70 home buyers on pro-rata basis after proper identification.

The court also noted the submission of advocate M L Lahoty, appearing for the home buyers, that the principal amount was Rs 22 crore and not Rs 15 crore as the impression was given on the last date of hearing.

Lahoty said the affidavit filed by the firm before apex consumer forum said that the principal amount was Rs 22 crore and with interest, it would be around Rs 36 crore. Prasad said if refund is given to the 70 flat buyers, then over 800 home buyers will come seeking refund from the developers which do not have money.


Lahoty contended that home buyers were interested in refund as over 95 per cent of the money was paid to the developer in 2007 and they had committed to hand over the flats by 2011.

The bench asked the firm to deposit Rs 10 crore by December 10 with Supreme Court registry and posted the matter for further hearing on December 14.  The apex court had on September 15 directed the firm to deposit Rs 12 crore within four weeks as interest bearing short term deposit for delaying giving possession of flats to home buyers in its Ghaziabad project.


It had asked the home buyers whether they would agree to the proposed deadline of December 2017 given by the developer and the quantified monthly rent. The firm had said if the Ghaziabad Development Authority (GDA) re-validated the relevant plan, the building can be completed by the end of December, 2017.

The bench refused to agree with the contention and said the present litigation had nothing to do with the re- validation of the plan submitted by the appellant to the Ghaziabad Development Authority.

On August 26, the developer had told the apex court that they were in "serious financial difficulty" as they had suffered a loss of around Rs 400 crore last year and said they would hand over possession of flats to buyers within a year in its delayed project at Ghaziabad.


The firm was asked by the apex consumer commission in May this year to refund the principal ammount in four weeks with 12 per cent interest, Rs 3 lakh as compensation and Rs 25,000 as litigation cost to 70 buyers who had booked flats in the Parsvnath Exotica project.

The 70 buyers who had approached the NCDRC had said they had booked flats in the project in 2007 which was to be completed by 2011, and the delay was of over five years. They said that in 2015, GDA had cancelled the approval for the project, which was not their fault.

The apex court was also informed that 854 flats were to be constructed in the project and 818 buyers had booked the flats. Parsvnath Developers Ltd had moved the apex court against the apex consumer commission's order asking it to refund the money to 70 buyers along with interest.


Location: India, Delhi, New Delhi