Supreme Court empowers home buyers to claim refunds

NEW DELHI: The Supreme Court in its recent judgement in Kolkata West International City Pvt Ltd Vs Devasis Rudra has empowered home buyers to claim refunds from builders/promoters cases of unjustifiable delay in handing over the home.

In the instant case, the buyer paid Rs 39,29,280 in the year 2006 to the builder and according to the agreement the builder was required to handover possession in the last month of 2008, with a further extension, at request, of six months ending in June 2009. Despite the same, the buyer was not handed over possession till 2011 and hence a was filed complaint before the West Bengal State Consumer Dispute Redressal Commission. By 2016, the buyer had waited almost seven years for possession. The builder sought the builder-buyer agreement to justify the delay which was rejected in the court.

The Apex Court in this case observed, “It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on March 29, 2016. This was nearly seven years after the extended date for handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified.”

However, it is difficult to execute refund orders in cases where a developer does not have funds to complete the project or refund home buyers. Banks and local authorities seldom do anything to help buyers, who keep paying EMIs and still keep waiting for their homes. All stakeholders including banks, local authorities and RERA need to come forward to resolve cases where buyers are waiting for their homes for years to complete. They should either get their homes or refunds as the Supreme Court decided in Devasis Rudra’s case.



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