M/s Suneja Towers Private Limited & Anr Vs Anita Merchant(Supreme Court)
Date-18th April, 2023
Sub-Whether payment made to builder for purchase of flats which is arbitrarily cancelled can lead to refund with compound interest?

The Supreme Court in this case was dealing a situation where the Respondent had booked 3 flats in the year 1989 when she was NRI and had paid 60% of the amount, though defaulted on further payment when called for. However, the builder also did not complete the construction as per the schedule and offered to refund Rs 10.68 lacs in the year 2005 which was refused to be accepted and Consumer forum was approached claiming refund of money and compensation on account of various factors including loss of rent, harassment, mental agony etc. The State commission relying on the decision of the Supreme Court in the case of Manjeet Kumar Monga’s case allowed compensation with compound interest of 14% which meant an amount of around Rs 7.50 crores to be paid by builder. The Supreme Court looked into various aspects in this case, including the ratio of Monga’s case, the principles governing compound interest and after noting several landmark decisions in similar cases where the apex court had awarded simple interest ranging from 6% to 9%, observing this case to be a peculiar case and in respect of the same builder and same property as in Monga’s case allowed the Respondent to keep Rs 2.48 crore which was deposited by the developer in terms of earlier directions of the Court itself. The court was perhaps guided by the fact that the lady was 39 years when she booked the flat and now she was 73 years old when the case settled.

This judgement will come as a relief to the builders/developers, though will be an eye opener to the flat buyers to claim proper relief in proper forum like Competition Tribunal , Consumer forum or District court.

Ramesh Patodia
19-04-2023