SC: Homebuyer seeking refund can't ask builder to reimburse loan interest
NEW DELHI: Supreme Court has held that a homebuyer, who seeks refund due to delay in completion of a project, cannot claim that a developer also reimburse the amount paid as interest on home loan.
The buyer is only entitled to the principal amount paid to a company and a 'compensation' in terms of the interest on the said amount as per the agreement, it said.
It set aside a consumer court order directing the Greater Mohali Area Development Authority to reimburse the interest paid by a homebuyer to a bank on home loan in addition to refunding the principal amount with 8% interest.
SC: How buyer funds flat buy not developer's consideration
A bench of Justices Sanjay Karol and Prasanna B Varale said there cannot be multiple heads to grant damages and interest over and above what is agreed upon between the homebuyer and the builder.
Referring to various SC verdicts, the bench said there were no exceptional or strong reasons for directing GMADA to pay the interest on the loan taken by the homebuyer.
The bench said, "Whether buyers of the flat do so by utilising their savings, taking a loan for such purpose or securing the required finances by any other permissible means, is not a consideration that the developer of the project is required to keep in mind.
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"For, so far as they are concerned, such a consideration is irrelevant. The one who is buying a flat is a consumer, and the one who is building it is a service provider. That is the only relationship between the parties.
"If there is a deficiency or delay in service, the consumer is entitled to be compensated for the same. Repayment of the entire principal amount along with 8% interest thereon, as stipulated in the contract, alongside the clarification that there shall be no other liability on the authority, sufficiently meets this requirement."
In this case, the Punjab State Consumer Disputes Redressal Commission had directed GMADA to refund the entire amount of Rs 41 lakh along with interest at the rate of 8%, apart from compensation of Rs 60,000 to the buyer for the mental tension and harassment suffered by him, in addition to reimbursing the interest paid by the buyer to banks on home loan.
The court said once the parties had agreed for a particular consequence of delay in handing over of possession, then there had to be exceptional and strong reasons to award compensation at more than the agreed rate.
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