In a major setback to big builders, the Supreme Court on Monday directed Delhi-based Unitech to pay its 39 flat buyers a penalty equivalent to 14 per cent of the principal deposited since 2010, in addition to returning the principal amount.
The apex court has ordered Unitech to pay out 14 per cent a year for every year from 2010, on the principal amount of Rs.16.55 crore deposited by 39 flat buyers, along with Rs.16.55 crore.
The apex court has directed that Unitech pay at least 90 per cent of the total amount to these buyers within eight weeks.
Earlier, the apex court had asked the realty firm to return Rs.16.55 crore to the 39 flat buyers in its Vista project. But it was told that construction was underway on the 39 buyers' flats and that they would be handed over to them in April this year. The counsel for the firm pleaded for six months to complete the project.
"The company by delaying or procrastinating the completion of the flats cannot base its stand on excuses or any subterfuge to advance the stand that constructions take time…The submission in a way rests upon the metaphor that `Rome was not built in a day' but serves no purpose. It is `flat' or `money'. And nothing else. They collectively make a demand for refund of money because they have fought the litigation with ceaseless vigour and enormous hope," the bench said.
The apex court warned real estate companies not to play with people's dreams of owning a house by reneging on their promise of delivering flats in time and instead making them run from pillar to post to get back their hard-earned money.
"It needs no special emphasis to state that the property developer has to respect the contractual commitment. It has to live up to the terms of the contract and gain trust so that the people who dream of houses can repose faith in him. Not for nothing, it has been said, the foundation of any economy is faith and if faith is lost, everything is lost," the bench added.