With sharp words and sharper actions, the Supreme Court is putting its might behind hapless home buyers who have for long suffered at the hands of developers. Over the past two days, the apex court has taken to task two developers and ordered them to refund investors' money at once for failure to deliver projects.
On Wednesday, the SC ordered real estate developer Unitech to pay Rs 2 crore more to complete the refund to 39 flat buyers in one of its Gurgaon housing project. Reprimanding the company, the Supreme Court said: "The builder can't take refuge under the metaphor that Rome was not built in a day." Unitech would have to pay in all Rs 17 crore. The company has already deposited Rs 15 crore with the court's registry following a similar order in August.
According to sources, the amount would cover the buyers for the principal amount they gave Unitech for the flats in its Vistas project in Gurgaon. The flats were supposed to be handed over to buyers in 2012. The quantum of interest Unitech will have to pay buyers would be decided in January next year.
On Tuesday, the Supreme Court had directed a refund of Rs 22 crore to 70 flat buyers who had invested in one of Parsvnath's housing projects. The project was launched in 2007, but the construction of the property was still going on.
The court directed the company, which had already deposited Rs 12 crore in the SC registry, to deposit Rs 10 crore more. The amount would be disbursed among flat buyers by the SC registry. The SC went on to say that companies should not venture into the sector if they were not able to complete the projects on time.
In the past few months, courts have reacted sharply to developers who have not delivered projects on time. According to experts, the SC judgments have already started cleaning up the sector ahead of the Real Estate (Regulation and Development) Act 2016 (RERA).
"These judgments have had a good impact on the sector. For decades, consumers had no support system and all this while, their grievances were either settled or scuttled by developers. The SC judgments are helping in setting up a precedent. RERA, when it comes in, would help in swift settlement of such cases. The SC's cracking the whip now would infuse fear of law among developers," said Gulam Zia, executive director - advisory, retail and hospitality at Knight Frank India.
Fearing more such rulings, developers say it would make things more difficult for them in an already tough market.
"The past few years have been bad for the sector. It is not just us who have been responsible for the delay. If in such tough times we are asked to repay, it would be unviable for us to be in the sector. The court should consider the plight of both parties," said the chairman of a Delhi-based real estate firm.