The Supreme Court of India on Tuesday delivered the final verdict in an 18-year long legal battle, providing major relief to the resident welfare association (RWA) of a Noida-based housing society, Royal Garden. It turned down the plea of the developer’s company that there were limitations barring the association from raising grievances and passed the order by accepting the report of the local commissioner of the National Consumer Disputes Redressal Commission (NCDRC). In fact, this court cited that the complainant “shall be entitled to all told monetary compensation in a sum of Rs 60 lakh, now lying in deposit with the Registry of this court, together with the interest accrued thereon, in lieu of the reliefs sought in prayer of the complaint”.
The case was about the aggrieved residents of the said housing society who approached the NCDRC against its developer for failure to fulfil the promises made in their agreement of sale. The developer’s company thereafter moved the apex court, which had, in an interim order in 2010, stayed the order of the consumer commission but directed the company to deposit Rs 60 lakh in its registry.
The recent ruling of the SC in this case has been applauded by those associated with real estate. They believe this judgment will instil confidence in homebuyers and will also serve as a warning to developers who fail to fulfil the obligations made in the agreement with their homebuyers.
Advocate Tanuj Lodha, Lodha & Lodha Advocates, said this was a rampant issue plaguing the real esate industry, wherein a plethora of promises regarding amenities that were made to the allottees at the time of sale remained unfulfilled. “A long and expensive legal battle has to be undertaken to seek performance of these promises or to seek compensation. The ruling of the Hon'ble Apex Court shall help the allottees and housing societies enforce their right to compensation in courts across India. Besides, the introduction of RERA with specific provisions on this issue is also helping shorten the duration of litigation,” Lodha said.
Tanuj Lodha |
CA Ramesh Prabhu, chairman, MahaSewa (Maharashtra Societies Welfare Association) observed, “the Supreme Court’s judgment has certainly increased the hopes of the flatowners who were waiting years together to get their amenities. At least now, consumers can quote this judgment and get relief in the consumer court petition and RERA complaints. Developers also will be cautious in future before making any commitment. The RWA and societies that had not filed any cases will also be able pursue the pending amenities by approaching the appropriate authorities or pursue the builders to provide the promised amenities.
Dr Niranjan Hiranandani, national vice chairman, NAREDCO & MD, Hiranandani Group, commented, “From an industry perspective, this will be seen as a positive thing, as it will motivate the few developers whose projects have remained incomplete for many years in any respect, especially as regards amenities or facilities, to find ways to sort out the issues.”
Manju Yagnik, vice chairperson, Nahar Group and senior vice president, NAREDCO Maharashtra, has also welcomed the SC ruling. “Such decisions to compensate will act as a deterrent for developers ensuring that they deliver the projects as per the promised deliverables or provide the funding as per prevalent market cost to complete the remaining amenities. The decision will boost the confidence of homebuyers to invest in projects of brand name developers who are committed to deliver finished projects. The state RERA laws also cover these aspects of relating to defaults to promised facilities; however the apex court’s decision to compensate the residents for unfinished projects will resulting in ending many such pending disputes between residents and developers,” she said.
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