CONSUMER COURT ORDERS BUILDER TO PAY SAME INTEREST AS BUYER FOR DELAY

Recently the National Consumer Court ( NCDRC ) has been imposing fines and passing severe orders against the builders who have been indulging into unfair trade practices. One of those unfair practices include charging interest from the homebuyers at very high rate say around 18% p.a. or even more for delay in payment of installment, whereas, the builders themselves pay interest at a very negligible rate mostly at Rs 5 per sq. ft which comes to around 1.5-2% p.a. for delay in project .

A bench of National Consumer Disputes Redressal Commission (NCDRC) president Justice R K Agrawal and member M Shreesha in a case against UMANG REALTECH PVT LTD., while addressing the issue of rate of interest, observed that such provisions in a builder-buyer agreement are unfair and unreasonable and a builder/ developer cannot be allowed to force such one-sided/ unilateral terms upon the buyers which protect only the interests of the builder alone.

The said order was passed on the plea of a homebuyer who had booked a flat in 2012 in "Winter Hills 77" project in Gurgaon being developed by the builder. The possession was to be given in December 2015 and the homebuyer had already paid around Rs 83 lakhs towards the installment of the flat but, the possession was still awaited. As the consequence of the delay the buyer sought refund of the money alongwith interest @18% per annum, the rate at which he had paid penalty to the builder for delay in payment of instalment.

The apex consumer court further observed that there should be parity in the rate of interest to be paid by builders and homebuyers for non-compliance of the terms of agreement and suggested that builders should pay the same rate of interest for delay in project that they demand from buyers in case of delay in payment.

The company, however, said it was liable to pay compensation at the rate of Rs 5 per square feet for delay as per the agreement. To which the NCDRC said-

"It is also an admitted fact that the opposite party (the Builder Company) charged interest at the rate of 18% p.a. for any delayed payments made by the purchasers and there is no justification in offering a meager Rs 5 per sq ft, which comes to approximately 1.4% pa which is only a paltry percentage of what it was charging for any delayed payments."

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