3 cases pending in Supreme Court that will reshape the Real Estate in India

There is widespread trust-deficit among homebuyers and developers in India. 70% of the projects launched in last one decade have witnessed delays running into years. Unlike the past, homebuyers have taken it upon them to teach a lesson to the notorious builder lobby.

Homebuyers activism is at the peak and social media has played a significant role in bringing them together. Money is not a problem anymore and they are ready to take on the battery of lawyers that developers had so far used as a tool to get away. Individuals and Groups of homebuyers have taken it upon themselves to bring some of the developers to justice and we are witnessing unprecedented numbers of cases that have reached the highest court of the country, the Supreme Court of India.

Here are 3 of the most significant cases that are sub juice in the SC and will reshape the Real Estate in India:

1. Unitech Residential Resorts (Unitech Vistas) Ltd vs Atul Gupta – CA 6044/2015 in SC

Issues Pending: Delay penalty at 12% / Refund at 14%+

Case history

This was the first judgment by NCDRC which had the buyers jumping with the joy. NCDRC had ordered payment of delay penalty at 12% to Unitech Vista homebuyers. The case was argued by P. Chidambaram and Abhishek Manu Singhvi in the Supreme Court.

Frustrated by the delays, the buyers asked for the refund of money instead of the delay penalty in SC.

Current Status

SC accepted the request for refund and Principal Amount is already refunded to 37 buyers of the project. In Feb 2017, the SC had asked Unitech to deposit the interest at 14% with the court and same is likely to be refunded to the buyers.

Impact

As it appears, the case is going in the favor of homebuyers. Even if the money is refunded with 14% interest, this would send shivers down the spine of errant developers. It is important to note that Unitech had tried it’s best to tangle the case in legal loopholes and had fielded the likes of Mr. P. Chidembaram and Mr. A Manu Singhvi. There have been other cases in past where SC had ordered the refund of money at 18% but this is by far the largest refund, i.e approx 40 Cr.

2. Jaypee Developers (Kalypso Court) vs Developers Township Property Owners Welfare Society

Issues Pending: Super Area increase, Car Parking, Delay penalty at 12%

Case history

While rest of the order is like many orders of NCDRC where delay penalty has been fixed at 12%, the NCDRC also declared the arbitrary increase in Super Area as illegal. The Court also ruled that developer can’t sell Car Parking and the money charged for the same should be refunded.

Current Status

Jaypee chooses to appeal in SC and got stay on the payment of interest amount. SC directed JP to deposit 4 Cr with the court and refused to stay Car Parking charges refund and order against illegal Super Area increase charges.

Impact

If the buyers have their way, this case will put an end to the practice of Super Area increase and car parking charges.

3. Supertech Ltd vs Emerald Court Owner-Resident Welfare Association

Issues Pending: Demolition of construction raised against illegal layout plan changes

Case history

The Supertech developer, in its project Emerald Court, chose to raised construction of the two towers—Apex and Ceyane. These changes in original layout plans are in violation of U.P Apartment Act and National Building Code. The Allahabad HC had ordered demolition of the towers and the money of investors be refunded with 14% interest. The court was of the opinion that towers are too close to each other and are unsafe.

Current Status

The case is sub-judice in SC and the money is being refunded to the allottees who bought apartments in these towers. The NBCC is assigned to check the safety aspect and final verdict will be on the basis of the findings of the committee which has already been submitted to court.

Impact

Arbitrary layout plan changes are very rampant in real estate projects. Towers and floors are added without looking at the safety aspect and original allottees are mostly left with bad taste. If the SC decides against the developer, this case will be a stern warning to the developers who indulge in such practices.

Conclusion

While there may be other cases pending in SC, the above-mentioned cases shall settle some of the long pending issues related to homebuyers. These judgments will surely send a stern warning to the developer who thinks they are above the law and can escape with it with the use of money and power.

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