SHOULDN’T #HONOURABLE #COURTS DIRECT DEFAULTING #BUILDERS & #DEVELOPERS TO #COMPENSATE AGGRIEVED #HOME-BUYERS AT 24% ANNUAL RATE OF INTEREST?
Developers and Builders often cry foul when #Honourable #Courts tell them to refund amounts, and that too with interest @ 14% per annum for non-delivery of flats to a home-buyer. Refer the TOI column below wherein Supreme Court directs a reputed builder Supertech Ltd for such a refund. But have the builders ever thought of what the poor buyer undergoes having put in his life’s savings, to his misdeeds maybe not in this case, which often include illegal construction, overcharging, not refunding amounts even when mentioned in agreements and making the buyer run from pillar to post; in case the buyer doesn’t toe in line with the developer. And, at times his cronies even display muscle power, especially when you want to meet him or a senior person in his office to plead your case.
SO WHAT CAN BE DONE TO MAKE DEVELOPERS MORE SENSITIVE TOWARDS BUYERS?
But before that let us analyse as to why the developer is so callous towards the buyer when it comes to resolution of disputes? One of the main reasons is because he makes much more than 14% return on the amount he has already received from the buyer.
In fact the honourable Supreme Court will be more accurate if the compensation awarded to the buyer is increased from 14% to 24% especially in cases where the builder needs to refund as per agreement and defaults, as this will instill a lot more seriousness in the developer fearing a business loss if he has to refund @ of 24% penal interest. Often after paying the booking amounts if the home-buyer wants to retract, when he discovers the reputation of the builder is not good or when he pays half the amount and realises the property is not being financed by banks and he cannot get a bank loan to fund, the builder in all humility should refund the amounts as per the agreement but doesn’t, and makes the buyer run from pillar to post and in such cases he rotates the amount at least once or may be 1.5 times a year and makes much more than 14% and that is the prime reason why he is so unfair with the buyers and doesn’t refund the amount forthwith; and so holds the amount by his teeth and doesn’t let it go till directed by the court of law. And for the court of law to direct it may take a couple of years and so each year he makes a profit on the amount. But imagine the same scenario with 24% penal interest where he starts making a loss. He would then willingly return the amount forthwith and thus number of complaints will reduce drastically and even builders will become more responsible both in letter and spirit towards a home-buyer.
Hapless home-buyer has, little or no support, from either the Government or any other agency including #CREDAI which again is a builder’s consortium and seldom helps the home-buyer.
And, therefore one can’t help but feel, media and the judiciary are the two biggest friends of a common man.
Supreme Court tells Supertech to refund flat owners
TNN | Jul 31, 2014, 12.06AM IST
NEW DELHI: The Supreme Court on Wednesday asked Supertech to refund the principal amount along with 14% interest by October 30 to flat owners in the ?Emerald Court’ twin towers in Noida, which was sealed on May 5 when the SC stayed their demolition ordered by the Allahabad high court.
The builder said it would cast a huge liability as the interest on money paid five years ago for booking flats in the twin towers would exceed the principal amount. This means, if a person had booked a flat paying Rs 50 lakh, then he/she would get back nearly Rs 1 crore from the builder.
A bench of Chief Justice R M Lodha and Justices Kurian Joseph and R F Nariman asked Supertech to pay nearly 50 flat owners the principal amount by August 30 and the compound interest accrued at 14% per annum by October 30.