Key facts
- Homebuyers who booked flats in 2005-2007 are still awaiting possession.
- The Bombay High Court ordered a builder to pay 10.05% annual interest on delayed possession.
- Interest is applicable from February 1, 2014, until possession is delivered.
- The court noted the builder cannot indefinitely retain buyers' money without delivering homes.
- The builder cited forest land issues as a reason for the significant delay.
The Bombay High Court has ruled in favor of homebuyers who booked flats in a Mumbai housing project between 2005 and 2007, and are still awaiting possession nearly two decades later. The court ordered the developer to pay interest at 10.05% per annum from February 1, 2014, until the flats are handed over, noting that a builder cannot indefinitely hold purchasers' money while failing to deliver homes.
Many of these distressed buyers had already paid between 50-60% of the flat cost, with possession originally promised between 2008 and 2010. The High Court dismissed the builder's contention that forest land and other issues caused the delay, emphasizing that under the Real Estate (Regulation and Development) Act (RERA), homebuyers who choose not to withdraw are entitled to interest for every month of delay.
The court highlighted the vulnerable position of homebuyers, who often borrow money to pay for a house and effectively act as financiers for building projects. The High Court upheld a 2018 order from the MahaREAT that had directed the builder to pay the 10.05% annual interest. Additionally, the court imposed costs of Rs 1 lakh each on the developer in two appeals and Rs 10,000 each in eight other appeals, to be paid within four weeks.