In a major relief to homebuyers, the Supreme Court, while modifying a previous National Consumer Disputes Redressal Commission (NCDRC) order, has directed Bengaluru-based developer Mantri Castles Pvt Ltd to pay 6 percent interest to customers who have invested in their much-delayed Mantri Serenity project. The interest is to be paid from the date of possession according to the respective agreements (starting from December 2015) till February 19, 2023, the date on which the developer says he has handed over possession.
However, homebuyers claim that the project still lies incomplete without a permanent water or electricity supply. Additionally, while blocks 2,4, and 5 have obtained partial occupancy certificates (OC) blocks 1 and 3 do not have OCs. Last week, Karnataka's Department of Electrical Inspectorate sent a notice to the developer for running lifts without permission in two towers.
"The award of interest at the rate of 6 percent per annum by the NCDRC is subject to the modification that interest shall be payable with effect from the respective dates mentioned in the agreements for the delivery of possession," the order dated July 25, 2023, said.
The court said that over and above the interest, buyers shall also be paid compensation on account of delayed possession at the rate of Rs 3 per square foot per month from the agreed date of possession.
"The amounts which are due and payable shall be paid on or before September 30, 2023," it added.
Delayed for more than five years, Mantri Serenity has a total of 2,150 apartments across blocks 1 to 5.
The project was supposed to be handed over to buyers, per their respective agreements, starting from 2015. The date of possession is different for different agreements.
In 2020, the NCDRC had initially ordered the developer to pay the delayed interest from February 2018 till the final offer of possession for all homebuyers. However, 62 homebuyers filed an appeal in the Supreme Court challenging the initial date for the calculation of the interest.
"This has been questioned by homebuyers on the ground that they are entitled to interest with effect from the respective dates on which the deposit of consideration was made with the developer (i.e., the agreed date of possession)," the Supreme Court order added.
Relief to more than 2,000 homebuyers
Several homebuyers like Vikram SG, who invested about Rs 1 crore for a 3BHK in Block 4, have been waiting for possession of his house since 2017.
This being a class action suit, the Supreme Court order will apply to all homebuyers in the project, giving relief to more than 2,000 buyers, said advocates Moneycontrol spoke to. A class action is a form of litigation whereby one or more plaintiffs file a lawsuit on behalf of a larger group, rather than each person filing her / his own individual suit.
"Other homebuyers who are not a party to the order, but belong to the same project, can file an execution in the Supreme Court or NCDRC," said Chandrachur Bhattacharyya, an advocate.
In 2020, the homebuyers filed a first information report (FIR) at the Subramanyapura police station accusing the developer of fraud and cheating, but the builder obtained a stay on the investigation from Karnataka High Court.
In December 2022, the Karnataka High Court ordered a status quo on apartments of the Mantri Serenity project, which were seized by the Enforcement Directorate (ED) after complaints that the developer had allegedly misappropriated funds.
A list of questions has been sent to the developer and Moneycontrol will update the story after receiving the responses.
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