Will SC order help home buyers?

Naveen Yadav, 32, a salaried professional had booked an apartment in Unitech Ltd’s Vistas project in Gurgaon in June 2010, and was promised delivery in October 2013. But not a single floor of the tower, in which he had booked an apartment, has been constructed till now, he said. He is one of the 39 home buyers in the project who got relief from the Supreme Court in August this year.

In 2015, the National Consumers’ Disputes Redressal Commission had asked the developer to pay a simple interest of 12% to these buyers. The company had then approached the apex court, which had at that time stayed the Commission’s order. “When it came up again for hearing in the Supreme Court in August this year, we told the court that we had lost faith in the developer completely and hence want refund,” Yadav said. The court ordered the company to deposit Rs.15 crore for principal refund and a decision is pending on the interest to be paid. An email seeking an update on its projects from Unitech remained unanswered.

In a similar case in August 2016, the Supreme Court had asked Parsvnath Developers Ltd to refund Rs.22 crore to 70 investors of its Parsvnath Exotica project in Ghaziabad. Questions sent to Parsvnath remained unanswered.

DLF Ltd was also asked by the apex court, in the same month, to handover flats to 50 buyers of a project in Panchkula, near Chandigarh, by November 2016 along with an interest of 9% for the delayed period. The delivery for the flats was scheduled for 2013. DLF did not specifically respond to queries regarding the Panchkula project but it said that most of its residential projects have been handed over and a couple of projects are being handed over.

Arun Saxena, president, International Consumer Rights Protection Council, a consumer rights organisation, said that there more than 80,000 such cases going on at various levels.

However, Getamber Anand, national president, Confederation of Real Estate Developers’ Associations of India (Credai) said, “When such a judgement is passed, cash flows are disturbed and the project cannot be completed. Funds needed to complete the project have to be diverted towards refund.” The court has directed these developers to compensate for the delay and taken performance guarantees to ensure that the under-construction projects are delivered as soon as possible, added Anand.

Saxena said there are ways to drag the matters despite court orders, and added, “The builders negotiate with the consumers and return the amount without interest. Sometimes they pay less than what they received from the buyer.” Anand said that while deliveries are happening, delays have also been there. According to data from a realty research and analysis firm, 4,055 projects across the top 7 markets are delayed by at least one-and-a-half years and are still under-construction.

Yadav said that even if his principal amount is paid back, it is a loss if it is not paid back with interest. “If a home buyer delays his payment, he has to pay a quarterly compounded interest of 18%. But when we talk of the opposite, what home buyers get for the delays is peanuts.” He further said that even if some interest is paid on the principal amount, they will still be losing on it as they will have to pay 30% tax on it.

But if the court grants both principal and interest to the hurt home buyers, this Diwali may be brighter for them. With property prices at a low level, they can get better deals now.

Credits Live Mint

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