Builder will have to pay 6% interest per annum to buyers in case of delay in possession of flats: SC

New Delhi, 25 August 2020 Tuesday

Supreme Court Judge Justice D.Y. Chandrachud and K.M. A bench of Joseph has asked DLF Southern Homes Pvt Ltd and Annabel Builders & Developers Pvt Ltd to pay 6 per cent interest on the price of the flat to the flat buyer every year.

Both these builders are building flats in Bengaluru. The bench said builders would pay interest to buyers whose flats have been delayed for two to four years. Southern Homes Pvt Ltd is now known as BEGUR OMR Homes Pvt Ltd.

The apex court also quashed the July 2, 2019 order of the NCDRC dismissing the complaint of 339 flat buyers stating that they were not entitled to compensation in excess of the amount stipulated in the flat purchase agreement in case of delay or non-availability of futures facilities.

A bench of the apex court said that the builder would pay a penalty of Rs 5 per square foot for delay in delivery of the flat. At the same time, builders will now have to pay 6 per cent interest per annum to the flat buyer on the price of the flat.

Initially, builders will have to pay 6 per cent interest annually, the bench said. But if there is a delay of more than 36 months in flat possession, penalty will have to be paid on compound interest till possession.