Case Note & Summary
The appeal was filed by homebuyers against the final order of the National Consumer Disputes Redressal Commission (NCDRC) dated 23rd January 2023 in Consumer Case No. 612 of 2018. The NCDRC had partly allowed the complaint and directed the developer to issue a fresh statement of account crediting delayed compensation of Rs. 24,33,120/- as on 13th November 2017, and further directed that on the balance amount (except stamp duty and registration charges), the developer would charge interest @9% per annum from 14th November 2017 till the date of payment. The homebuyers were aggrieved by this direction permitting the developer to charge interest. The Supreme Court noted that the homebuyers had paid 90% of the total sale consideration (approximately Rs. 2,21,56,942.42 out of Rs. 2,38,20,932) by 23rd June 2014. The developer failed to hand over possession by the scheduled date of 16th March 2014, leading to the consumer dispute. The Court held that the NCDRC erred in allowing the developer to charge interest on the balance amount, as the delay was solely attributable to the developer. The Court quashed and set aside that part of the order and directed the developer to convey the outstanding amount to the homebuyers within two months, and upon payment, hand over possession within 30 days. The appeal was disposed of accordingly.
Headnote
A) Consumer Law - Homebuyer Dispute - Interest on Balance Amount - Consumer Protection Act, 1986, Section 21 - The issue was whether the developer could charge interest on the balance amount from the homebuyers when the developer had failed to deliver possession by the scheduled date despite receiving 90% of the sale consideration. The Supreme Court held that the Commission erred in permitting the developer to charge interest, as the delay was attributable to the developer. The direction to pay interest was quashed and set aside. (Paras 4-7) B) Consumer Law - Compensation for Delay - Developer's Default - Consumer Protection Act, 1986 - The homebuyers had paid 90% of the total consideration by June 2014, but the developer failed to hand over possession by March 2014. The Court held that the developer cannot benefit from its own default by charging interest on the balance amount. The developer was directed to convey the outstanding amount and hand over possession within stipulated timelines. (Paras 4-7)
Issue of Consideration
Whether the National Consumer Disputes Redressal Commission erred in directing the homebuyers to pay interest @9% per annum on the balance amount to the developer, despite the developer's failure to deliver possession on time.
Final Decision
The Supreme Court quashed and set aside the part of the NCDRC order permitting the developer to charge interest @9% per annum on the balance amount. The Court directed the developer to convey the outstanding amount to the homebuyers within two months, and upon payment, hand over possession within 30 days. The appeal was disposed of.
Law Points
- Consumer Protection Act
- 1986
- Section 21
- Interest on delayed payment
- Developer's obligation to deliver possession
- Homebuyer's right to compensation
