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Supreme Court rules that flat buyers are entitled to just and reasonable compensation for gross delay by builders in handing over possession.

In an apex court Case titled ‘Wg. Cdr.Arifur Rahman Khan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt Ltd.’ (now known as BEGUR OMR Homes Pvt. Ltd.), the judgment has been ruled in favor of the flat buyers who would be entitled to compensation in case of gross delay in handing over possession by the builders; thereby securing the buyers’ rights. 

By: Anjali Singhvi 

A Supreme Court case involving Counsel of Adv Prashant Bhushan, Sr. Adv Bishwajit Bhattacharya, Sr. Adv R Balasubramanian and Sr.Adv Pinaki Misra has ruled that

the failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency.

The bench comprising of Justices DY Chandrachud and KM Joseph observed that

“in cases where there is a gross delay in the handing over of possession beyond the contractually stipulated period, the jurisdiction of the consumer forum to award just and reasonable compensation is not constrained by the terms of a rate in builders agreement.”

The bench issued the following directives:

  1. Save and except for eleven appellants who entered into specific settlements with the developer and three appellants who have sold their right, title and interest under the ABA, the first and second respondents shall, as a measure of compensation, pay an amount calculated at the rate of 6 percent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate; 
  2. The above amount shall be in addition to the amounts which have been paid over or credited by the developer at the rate of Rs 5 per square foot per month at the time of the drawing of final accounts; and 
  3. The amounts due and payable in terms of directions (i) and (ii) above shall be paid over within one month from the date of this judgment, failing which they shall carry interest at the rate of 9 percent per annum until payment is made.

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