Refund of Principal - The Legal Chamber

The Supreme Court held that while there is no absolute rule for parity in interest rates between builders and buyers, the principle of equity and fairness may warrant it in cases of one-sided agreements and egregious conduct. The Court modified the awarded interest from 9% to 18% p.a., aligning the builder's liability for delay with the rate it charged the buyer, to serve the ends of justice. Facts Of The Case: The appellant booked a plot in the respondent's project in 2006, paying a significant advance. A Plot Buyer Agreement was executed in 2007, stipulating possession within 24 months of sanction of service plans and allowing the respondent to charge 18% p.a. interest on delayed payments by the appellant. By 2011, the appellant had paid over ₹28 lakhs. That year, the respondent invoke...

The Supreme Court held that a homebuyer's claim, once verified and admitted by the Resolution Professional and reflected in the list of creditors, must be honoured as per the plan's provisions for verified claims. It cannot be relegated to a residuary clause meant for belated or unverified claims, as this would misapply the approved resolution plan. Facts Of The Case: The appellants, residents of Bengaluru, booked an apartment in 2010 in the 'IREO Rise (Gardenia)' project developed by M/s Puma Realtors Private Limited. They executed an Apartment Buyer’s Agreement in 2011 and paid Rs. 57,56,684 out of the total consideration of Rs. 60,06,368. The Corporate Debtor failed to deliver possession by the agreed date of November 2013. The appellants initially filed a consumer complaint, which wa...

Tag: Refund of Principal

Supreme Court Upholds Buyer’s Right: Builder Must Pay 18% Interest for Delay, Same Rate It Charged