NEW DELHI: In order to ensure that homebuyers recover all the money invested by them, including interest paid on home loans, the National Consumer Disputes Redressal Commission (NCDRC) has said builders should refund money for delayed projects with interest at the rate at which a nationalised bank like SBI gave home loan during the corresponding period.
The apex consumer commission has said builders have to pay compensation and litigation cost to homebuyers who seek refund. In the absence of any uniformity in the decisions delivered by various consumer forums on the issue of interest rate, a bench of S M Kantikar and Dinesh Singh has said linking it with rate of interest of home loan was “appropriate and logical”.
The commission passed the order on a plea of 20 homebuyers who had invested around Rs 10 crore in Wave Garden housing project in Mohali in 2012. The builder — Country Colonisers Pvt Ltd — had promised to hand over possession of flats within three years but failed to complete construction in the last seven years.
“In so far as refund of the amount deposited by the complainant with the builder is concerned, there can be no two opinions. The refund in full has necessarily to be made by the builder to the complainant. In respect of the interest on the amount deposited, it is always desirable and preferable, to the extent feasible and appropriate in the facts and specificities of a case, that some objective logical criteria be identified and adopted to determine an apt rate of interest,” the NCDRC said.
“The rate of interest cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimised. In our considered view, bearing in mind that the subject unit in question is a residential dwelling unit, in a residential housing project, the rate of interest for house building loan for the corresponding period in a scheduled nationalised bank (take, State Bank of India) would be appropriate and logical, and, if floating/varying/different rates of interest were/are prescribed, the higher rate of interest should be taken for this instant computation,” it added.
It also directed the builder to pay Rs 1 lakh as compensation and Rs 1 lakh as cost of litigation to each homebuyer. The commission also slapped a fine of Rs 5 lakh on the company for indulging in unfair trade practices and directed it to deposit all the money within four weeks.
The NCDRC said homebuyers were “put to loss and injury, a continuous position of mental agony and physical harassment, hardship and difficulty, uncertainty and helplessness” even after paying substantial amount and the builder has to refund the principal amount deposited by them with equitable interest besides the lumpsum compensation and cost of litigation.