Moneycontrol PRO
Upcoming Event:Attend Quants League - 5 Days Live Algorithmic Options Trading Virtual Conference @ just Rs. 600/- brought to you by Moneycontrol Pro. Register Now!

Flat delayed by four years, NCDRC tells builder to refund homebuyer Rs 3.4 crore with interest

The consumer court also said the terms of the agreement signed between the two parties were wholly one-sided and unfair to the homebuyer.

The country's top consumer court has directed Gurugram-based Pioneer Urban Land & Infrastructure Ltd to refund the entire principal amount of Rs 3.45 crore with interest and Rs 25,000 as litigation cost to a homebuyer for a four-year delay in handing over of an apartment.

The National Consumer Disputes Redressal Commission (NCDRC) also held as wholly one-sided and unfair the terms of an “apartment buyer’s agreement” signed between the two sides. The court overlooked the developer’s argument that the delay was because of circumstances that were out of its control.

“The interest at 9 percent per annum has been awarded in the light of the observation of the honourable Supreme Court in a catena of judgments awarding interest, keeping in view the current market situation and that the banks have lowered the interest rates,” the order dated July 23 said.

In view of the disruption caused by the coroanvirus outbreak, the court gave the developer three months to comply with the order, failing interest rate will be raised to 12 percent.

The homebuyer alleged “deficiency in service” as the developer didn’t complete the construction or handed over the possession by October 2015 deadline as mentioned in the Apartment Buyer’s Agreement of March 7, 2012  for a unit of super area of approximately 3,498 sq ft.


The homebuyer applied for a house in the Pioneer Group’s housing project Araya in Sector 62 in Haryana’s Gurugram, by paying a booking amount of Rs 30 lakh, the court was told.

The developer was to apply for the occupation certificate of the project within 39 months from the date of the excavation. The developer was also allowed a grace period of 180 days.

The money asked by the developer from the buyer at the time of excavation was paid in June 2012 but on visiting the site, they found no work had started, the buyer said.

The site looked like an abandoned piece of land, with some construction here and there. There was no one to address their queries, the buyer said.

By December 16, 2015, the buyer had paid Rs 3.22 crore, almost 95 percent of the apartment cost.  The apartment was delivered late in 2019.

Even after five years, the developer failed to give possession of the unit. Repeated requests, letters, email, phone calls and even personal visits didn’t help, the court was told.

The homebuyer also alleged that they were forced to sign a one-sided agreement. The builder, as per the agreement, had agreed to pay compensation at the rate of Rs 10 per sq ft per month for the delay.

But, if calculated in terms of financial charges, it comes to approximate at the rate of 1.4 percent p.a. rate of interest and even these charges were to be paid after 39 months which is period for completion of construction, the buyer had said.

The consumer court held that the agreement was unfair to the homebuyer. “The builder could not seek to bind the respondent with such one-sided contractual terms,” the order said.

The builder said that delay was due to the reasons beyond their control.

The builder also said the complainants wanted “to seek more than the contractual benefits from the developer” and were expecting high speculative gains but failed due to a depressed real estate market.

"The continuing support of NCDRC for homebuyers is very encouraging and shows the strict approach of the court. However, it is surprising why RERA has failed to take stringent measures," said advocate Aditya Parolia, who represented homebuyers in the matter. He was referring to the real estate regulatory authority that regulates the sector and is responsible for protecting buyers’ interests.
Vandana Ramnani
first published: Jul 27, 2020 01:53 pm

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark