Good news for homebuyers! NCDRC asks builders to refund interest equal to home loan rate for delayed projects

The National Consumer Disputes Redressal Commission (NCDRC) in a ruling has said that builders should refund money to home buyers for the delayed projects. NCDRC also ruled that builders of such projects have to pay interest to the homebuyers at the rate at which a nationalised banks gave home loan during the corresponding year.  Not only that, builders also have to pay homebuyers compensation and litigation cost. The Commission said that linking the interest rate with home loan rate is appropriate and logical.

NCDRC has directed the builders who have delayed projects to pay Rs 1 lakh to every homebuyer as compensation and cost of litigation and imposed a fine of Rs 5 lakh on the company for indulging in unfair trade practices. The builders have to deposit the money within a period of four weeks, it directed.

A bench of S M Kantikar and Dinesh Singh said, "The refund in full has necessarily to be made by the builder to the complainant (homebuyers). 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." 

The bench said that the interest rate can't be arbitrary, some reasonable and acceptable rationale has to be evident. This ruling may boost the morale of homebuyers whose money have been stuck for years in some projects where builders are unable to deliver on their promises. There are many projects in the national capital region (NCR) which have failed to fulfill their commitment despite homebuyers paying money. These homebuyers are waiting to get their home or money back. 

Earlier this month, a homebuyer in Jaypee Infratech moved the Supreme Court, and sought that the government does not allow liquidation of the company. The homebuyer, Chitra Sharma, said in a petition that allowing the company to liquidate would be against the interest of homebuyers.