Supreme Court Orders Lodha to Refund Homebuyer with Interest for Delivery Delay

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    The Supreme Court overturned a decision by the National Consumer Disputes Redressal Commission (NCDRC), directing Lodha Crown Buildmart to refund Rs 2.25 crore to a homebuyer with a 12% annual interest rate over a delayed possession of an apartment.

    In a significant ruling, the Supreme Court has ordered Lodha Crown Buildmart, a part of Macrotech Developers (Lodha), to refund Rs 2.25 crore to a homebuyer within 12 months, along with a simple interest rate of 12% per annum. This decision comes as a result of a delayed possession of a 4-BHK apartment purchased by Venkataraman Krishnamurthy in the Lodha Evoq project located in New Cuffe Parade at Wadala, Mumbai.

    The dispute arose when Krishnamurthy, after paying Rs 2.25 crore as per the payment schedule, did not receive possession of the apartment for fit-outs within the stipulated time frame mentioned in the agreement. Despite the commitment for possession by June 2016 or with a grace period till June 2017, the developer failed to meet the deadline, leading Krishnamurthy to terminate the agreement.

    Krishnamurthy then approached the National Consumer Disputes Redressal Commission (NCDRC), seeking a refund of the amount paid along with a compound interest rate of 18% per year, along with compensation for the mental anguish and harassment suffered. However, the NCDRC, while acknowledging a delay in possession, deemed it as not unreasonable and ordered possession within three months. Additionally, it granted a 6% per annum interest on the amount paid till November 2017 but rejected the refund claim.

    Discontented with the decision, Krishnamurthy appealed to the Supreme Court, challenging the NCDRC’s order. The apex court scrutinized the terms of the agreement and criticized the NCDRC’s intervention, stating that it had overstepped its jurisdiction by disregarding the binding clauses of the contract.

    The Supreme Court’s verdict directed Lodha to refund the deposited amount of Rs 2.25 crore within 12 months, along with a simple interest rate of 12% per annum. The first installment is due on April 5, 2024, with subsequent payments on the 5th of each following month until the full amount is reimbursed.

    This ruling marks a significant development in consumer rights protection and sets a precedent for addressing grievances arising from delayed possession in the real estate sector.

    Also read: Adani Realty’s Acquisition: Potential Impact on Mumbai’s Luxury Real Estate Market

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