NCDRC ORDERS REFUND TO HOMEBUYER FOR DELAY OF 1 YEAR

Recently in the case of Shalabh Nigam vs Orris Infrastructure Pvt. Ltd. & Ors., the Apex Consumer Commission (NCDRC) , giving hope to lakhs of aggrieved homebuyers, has quantified a time period of one year for delayed projects beyond which homebuyers/investors can claim refund from builders.

The Hon’ble Supreme Court and Consumer Courts have repeatedly held that homebuyers cannot be made to wait indefinitely, but the issue relating to when refund can be claimed in case of delay was not clarified. The plea was preferred by a Delhi resident Shalabh Nigam, who booked a flat in 2012 in the luxury housing project, Greenopolis, in Gurgaon being developed by Orris Infrastructure and 3C Company.

The Buyer had made a payment of around Rs 90 lakh against the total cost of around Rs 1 crore. As per the Builder-Buyer Agreement, the flat was to be handed over within 36 months, with a grace period of six months, from the date of allotment. The Buyer approached NCDRC seeking its direction for either refund or time-bound possession of the flat when the builder failed to complete the project within the specified time.

The commission directed the builder to complete the construction and hand over the flat, complete in all respects as per the agreement, by end of September 2019 after obtaining occupancy certificate and to pay compensation at the rate of 6% per year on the total deposit for the delayed period even after handing over Possession. It further directed the builder that in case of non-delivery of flat within the deadline prescribed by commission, NCDRC, the builder will have to refund the entire amount with 10% interest.

The Court further observed -

“It is now established that allottees have the right to ask for refund if possession is inordinately delayed, particularly beyond one year,”

On the contention of the builder that the buyer had discontinued paying installments and if refund is ordered, then there will be a forfeit of 10% of the amount as earnest money, as per the agreed clause, the commission rejected the same stating that the installments were paid up to the 7^th stage and the payment was stopped later as there was no progress in the construction.

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