Supreme Court Rules on Delayed Construction Project: Landmark Judgment for Homebuyers

Landmark Judgment: Supreme Court on Delayed Construction Project

The Hon’ble Supreme Court of India in a recent judgment has laid down crucial guidelines for cases involving delayed construction projects. The verdict, delivered by a Bench of Justices Rohinton Fali Nariman, B.R Gavai, and Hrishikesh Roy, came as a ray of hope for countless home buyers who have suffered due to stalled construction projects. The apex court ordered strict implementation of its earlier directions on granting of interest, penalty, and compensation to aggrieved home buyers.

In a landmark decision, the Court declared that a home buyer, who has not taken possession of the property due to the builder’s fault, is entitled to full compensation. Further, the Court ordered that delayed construction projects, no matter the shortfall in the amount paid by the home buyer, should be treated as a breach of contract and interest of 9% per annum must be paid by the builder.

Additionally, the Court directed that compensation be awarded to a home buyer even if the apartment is constructed and is ready for possession, but others are unable to take possession. In such cases, the Court held that a lump sum amount of Rs. 25 lakhs per apartment should be paid, irrespective of the cost of the construction.

The Court also ordered that the builder must compensate every home buyer with interest at the rate of 12% per annum from the agreed date of handingover of the apartment, where the construction is delayed. It also laid down that when a construction project is delayed due to reasons beyond the control of the builder, he shall pay interest to the home buyer at the same rate during the period of delay. Additionally, if a home buyer takes a loan to cover the cost of the apartment, the builder will have to pay 18% per annum at penalty for the delayed period.

The Court clarified that these orders would also be applicable in cases where the home buyer has taken a loan with the consent of the builder and he defaults in completing the project. This judgement overruled a 2019 judgement in this regard.

The Court also directed that when there is wilful default on the builder’s end, all complaints related to delayed construction projects must be filed directly to the State Real Estate Regulatory Authority (RERA). The Court also made it clear that all complaints filed should be disposed of within a period of 60 days.

This judgment by the Hon’ble Supreme Court aimed at aiding home buyers affected by delayed construction projects is expected to encourage builders to complete projects on time. It is an important step towards protecting the interests of home buyers, who have been left in a precarious situation due to stalled constructions. With these directions, the Court has reiterated its commitment towards ensuring relief to home buyers and will hopefully bring much-needed relief and justice to those who have suffered.

The Court has rightly interpreted the law and expanded its ambit in order to protect the interest of home buyers. This judgement will become a guideline to other courts to take stringent action against builders who resort to stalling construction projects and hope others will follow suit. Moreover, this will help restore the faith of the home buyer in the judicial system and emphasize the importance of timely completion of projects in the real estate sector, which is prone to litigations of all types.

This judgement is a clear example of how the judiciary is working to provide effective remedies for the protection of home buyers. It is a crucial step towards making the Indian real estate sector more transparent and consumer-friendly. It sets an important precedent and will go a long way in ensuring justice for affected home buyers. Let us hope that this verdict will bring a positive change in the real estate sector in India and encourage home buyers to invest in upcoming projects, without the fear of their investment going down the drain.