Supreme Court orders Parsvnath to refund Rs 22cr to buyers

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'Consumers must not suffer': SC orders Parsvnath to refund Rs 22 crore to 70 home buyers

NEW DELHI: Holding that a consumer must not suffer due to delay on the part of real estate developers to hand over the possession of flats, the Supreme Court on Tuesday directed refund of money to 70 flat buyers+ who had invested in one of Parsvnath's housing project in NCR.

The company had launched Exotica project in 2007+ with a promise of handing over the flats by 2011 but the company failed to fulfil its promise and construction is still going on. Around 800 families had put in their money in the project in Gahaziabad and 70 buyers had sought refund of their money delay to in handing over the possession of flats.

Expressing concern over "common tendency" of real estate companies across the country to harass flat buyers by not completing the construction on time, a bench of Justices Dipak Misra, Amitava Roy and A M Khanwilkar said that companies should not venture into the sector if they were not able to complete the projects on time.

Senior advocate Subramanian Prasad, appearing for the company, assured the court to hand over the flats to the aggrieved buyers as soon as possible and pleaded to the bench that it should not be directed to refund the money. The company told the bench that other buyers would also seek refund and their business would be adversely affected.

The bench, however, was not impressed with his proposal and directed that investors must get their money back. The court directed the company, which had already deposited Rs 12 crore before SC registry, to deposit rest of Rs 10 crore. The amount would be disbursed among the flat buyers by SC registry.

"Money should go back to them(buyers). They must not suffer," the bench said, setting a deadline of December 10 for the company to pay the amount. The bench said that delay of few months in handing over possession was understandable but the buyers should get back money when the project got delayed by years.

"Why did you get into the business of real estate if you cannot complete the project on time? Who advised you to get into this business? You must respect the time frame fixed by you for competing the project," the bench said while posting the case for hearing on December 14 to decide the quantum of interest to be paid to flat buyers for holding their money for years with handing over flats.

The court was hearing an appeal filed by the company for quashing of National Consumer Dispute Redressal Commission(NCDRC) order directing the company to refund the money with interest to 70 flat buyers who had invested Rs 22 crore.

It assured the court to hand over the possession of flats by the end of next year and also told that the it was ready to pay rental amount for delay in completing the project. But the court ordered for refund after advocate M L Lahoty, appearing for aggrieved flat buyers, insisted for the money back.

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