SC Orders Parsvnath Developers To Refund Rs 22 Crores To Homebuyers


Nearly 800 families have invested in Parsvnath Exotica which was supposed to have been completed in 2011.
Highlights
  1. SC orders Parsvnath Developers to refund 22 Crores to 70 homebuyers.
  2. Court slams real estate developers who delay projects, says homebuyers should not suffer.
  3. Refund is for the Exotica Project in NCR which has been delayed since 2011.

DELHI: In yet another blow to real-estate developers who delay their projects, the Supreme Court has ordered Parsvnath Developers to refund the money invested by 70 flat buyers in one of its projects.

The 3-member bench of the court was listening to a suit filed on the company’s Exotica project in the National Capital Region (NCR).  Nearly 800 families had invested in the project which was launched in 2007 and was to be completed by 2011. However, it soon ran into delays with the Ghaziabad Development Authority (GDA) rejecting revised building plans for the project. Consequently, around 70 homebuyers filed a suit asking for their money to be refunded.

“In this country, builders have developed an attitude to make commitments to the purchasers and not fulfill them by delaying the projects,” said the court as it slammed real estate developers for delaying projects and ordered the company to refund the money and not let the homebuyers suffer.

In May this year, the National Consumer Disputes and Redressal Commission (NCDRC) had asked Parsvnath Developers to refund the principal amount to the buyers with 12% per annum interest after which the developer had moved Supreme Court seeking relief. The company had argued that it wishes to complete the project and honour the agreement, and wanted more time.

The court rejected arguments by Parsvnath Developers that the ruling would encourage other homebuyers to seek refunds, a situation the company could not bear as they did not have the money. Out of the 22 Crores that need to be refunded, the company has already deposited Rs 12 Crore. The balance will have to be deposited by December 10th. The 70 homebuyers will start getting their refunds on a pro-rata basis in a few days.

Parsvnath Developers also argued that the Landowners/Collaborators in the project be directed to refund to customers as its share as per the Development Agreement. The court has agreed with this and has issued a notice to this effect.

The court has not yet taken a call on the interest component that will be awarded to the home buyers for the delay. The next hearing of the case is slated for December 15.

Edited by – Nikhil Narayan Sivadas

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