builder needs to refund money

Refund of Money Paid to Builders: Buyer’s Right

On 25th November’ 2014, we had drawn attention of Homebuyers towards a Decision/Order of Hon’ble National Consumer Disputes Redressal Commission, New Delhi – the Apex Consumer Court under the blog titled “Builders to compensate financially for delay in property handover.”

All Judicial Consumer Disputes Redressal Forums, as well Hon’ble Supreme Court of India, in past have repeatedly held through their several decisions that “Homebuyers can’t be made to wait indefinitely for their sweet home, despite having paid its cost to the Builders in terms of scheduled mode of Payment.”

It’s has now become the usual practice of Builders that on account of having prescribed provision of a specific term in their Agreement, a compensation would be payable by them for any period of delay @Rs.5/- per sq. ft per month. This translates to Rs.10,000/- per month (Rs.1.2 lakh a year) for a 2000 sq. ft house costing to the tune of Rs.1 crore – an interest @1.2% per annum maximum. It has also been observed that lots of builders derail even the act of settling their own agreed compensation by creating unethical dues upon buyers & thus seeking by adjustment of payable compensation amount.

In our progressing Country for the welfare of lakhs of victimized home buyers due to inordinate and painful delay in getting possession of their home, the Apex Consumer Fora – the Hon’ble National Consumer Disputes Redressal Commission (NCDRC) has passed its landmark decision on 6th May’2019 in a Consumer Case vide its no. 1702 of 2016 of quantifying a time period of one year for delayed projects, beyond which the rightful home owners can claim their rightful ‘refund from builders’.

By pronouncement of said Judgment, NCDRC has established that “allottees (homebuyers) have the right to ask refund if possession is inordinately delayed particularly beyond one year”.

To read fully the case detail & referred Judgment please click here.

Beside quantified period for one year for delayed period, by said Order the Hon’ble Commission has further directed the erring Builders to pay compensation @6% per year on the total deposit for the entire delayed period even after handing over possession of the house. Further in case of non-delivery of flat within the deadline the builders will be liable to refund the entire amount with a 10% interest penalty.

At Power to Consumer, we feel it is a great relief for consumers-homebuyers who are being made to bear excruciating delay in getting possession. And are fetching unnecessary expenses through house rents for their current home, paying accrued interests on bank mortgages for no mistake of theirs. This is a great step towards consumer empowerment and we whole heartedly support. For more details, please reach out to our Legal Adviser at