The development comes after Karnataka RERA recently order asked a home buyer to pay interest to the developer for failing to pay EMIs of a delayed project in Bengaluru

In this case, the homebuyer, Gurudarshan Singh, had booked a flat in Faridabad, The Pranayam for Rs 50.9 lakh. While the handover date was December 2011, the apartment was only ready for handover in 2013.

The National Consumer Disputes Redressal Commission (NCDRC) has ruled that a real estate developer cannot charge interest from homebuyers on unpaid dues if a project is delayed beyond the agreed time. Upholding an order passed by the state consumer forum, NCDRC on June 3 observed: “The project was delayed beyond the agreed time of handover. Consequently, the developer cannot demand interest for the delay in payment made by the homebuyers.”

In this case, the homebuyer, Gurudarshan Singh, had booked a flat in Faridabad’s The Pranayam for Rs 50.9 lakh. While the handover date was December 2011, the apartment was only ready for handover in 2013. Legal experts note that despite directions from the Supreme Court of India, several state real estate regulators have passed orders where homebuyers have been asked to pay interest.

Setting aside another NCDRC judgement, where the forum allowed a developer Pioneer Urban and Land Infrastructure Ltd to charge the homebuyer interest in a delayed project, the apex court said on April 10, 2024, “We are of the view that NCDRC is incorrect to order the developer for charging delayed interest from homebuyers.” Thus, the Supreme Court quashed the interest charged by the developer for the homebuyer’s delay in paying monthly instalments.