Name of the Case:  M/S Laureate Buildwell Pvt. Ltd. Vs Charanjeet Singh

Case Number: Civil Appeal Nos.7042 of 2019

Judges Name: Hon’ble Judges Uday Umesh Lalit J, Hemant Gupta J, Ravindra Bhat J.

Order dated: 22.07.2021

Facts of the case:

• The Appellant filed an appeal challenging an order of the National Consumer Dispute Redressal Commission (“NCDRC”) challenged the order of the NCDRC by the present proceedings. The respondent ( “the purchaser”) complaint against the builder, seeking refund of the consideration amount for sale of a flat along with interest compensation and costs. The Builder contended that since the complainant was not the original allottee but a subsequent purchaser he could not claim any interest. The question before the Apex Court was whether a subsequent purchaser is not entitled to similar treatment as the original allottee, and can be denied relief which otherwise the original allottee would have been entitled to, had she or he continued with the arrangement. 

Supreme Court held:

• The original allottee, enters into an agreement to purchase the flat in an on-going project where delivery is promised. The terms of the agreement as well as the assurance by the builder are that the flat would be made available within a timeframe. Usually Allotees funds from banks or financial institutions, to which they mortgage the property. The mortgage pay-outs start initially after an agreed period, commencing in a span of about 15 to 24 months after the agreement. Allottees start repaying the bank or financial institutions with instalments towards the principal and the interest spread over a period of time, even before the flats are ready. Prolongation of the project by a builder has serious economic repercussions upon original allottees who on the one hand are compelled to pay instalments and, in addition, also pay monthly rents. Such burdens are intolerable. An indefinite wait is impossible and allottees prefer to find purchasers who might step into their shoes. Such purchasers take over the obligations of the original allottee – either to pay the balance instalments or to wait for some time, would not per se exclude them from the description of a consumer. All that then happens is that the consumer forum or commission – or even courts have to examine the relative equities having regard to the time frame in each case. 
• The Hon’ble Supreme Court therefore held that there is no bar per se to grant relief of interest on refund to a subsequent purchaser.