Supreme Court awards compensation for non-delivery of flatIn a landmark judgment, the Supreme Court awarded a flat buyer Rs 2.27 crore for non-delivery of a flat by the developer. However, it reduced an even higher amount (Rs 3.65 crore) awarded by the National Consumer Disputes Redressal Commission (NDRC), rejecting the argument that the default commenced from the time when the flat purchase contract was beached.

The buyer, Trevor D’Lima, had booked a flat in 2011 in a redevelopment scheme. The builder in question was unable to complete the redevelopment work and transferred the project to a third party. Aggrieved by the developer’s failure to give him possession of the flat in time, the buyer approached the NDRC in 2015 and obtained a judgment in his favour awarding compensation of Rs 2.27 crore in addition to refund of his purchase price of about Rs 1.9 crore.

The developer appealed to the Supreme Court. The Court ruled that the developer’s transfer of the project to a third party did not discharge the developer of his obligations and upheld the compensation due to the flat buyer.

However, the court reduced the amount of compensation, reasoning that it need not be awarded from the date of breach of contract in every case.  The court noted that the developer had made alternative accommodation to the buyer during the litigation process, which the buyer had refused.

The actual date from which compensation will begin to run will depend on the facts and circumstances of the case.

The SC judgement is significant as consumers can approach the court for not delivering projects on time, and the developers are liable to pay compensation.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.