Deposit 5 cr as fine for delay in handing over property: SC to Unitech

July 03, 2016

It looks as if the Indian legal juggernaut continues to steamroll the Indian property and real estate giants. The situations seems very bleak for them. The Supreme Court on Friday directed real estate major Unitech Ltd to deposit an amount of Rs 5 crore in its Registry for failing to hand over apartments in Noida area in the national capital region to consumers which was to be given three years ago. A bench comprising Justices Dipak Misra and C Nagappan also warned the developer to deposit the amount by August 12, failing which its directors may be sent to judicial custody. The order came during the hearing of a plea filed by Unitech against National Consumer Disputes Redressal Commission's (NCDRC) October 12, 2015 order which directed the firm to pay compensation and litigation costs for delay in handing over three flats in project Burgandy in Sector 96 of Noida in Uttar Pradesh. The apex consumer commission had also directed Unitech to hand over possession of the flats booked by Diwakar Mishra and others on or before October 31, 2017. The complainants had moved the commission alleging that despite having paid more than 95 per cent of the agreed sale consideration to the real-estate major, the possession of the flats have not been offered to them and the construction was “ still far from complete” . Advocate Ashwarya Sinha, appearing for the consumers, said the builder had failed to hand over the possession of the apartment which was due to be given on April 16, 2013. “ The apartment relates to Sector 96 of NOIDA for which a payment of Rs 3.8 crore per flat for 3 flats was already received by Unitech Ltd,” he said. On May 9, the apex court had directed Unitech to deposit the amount by June 10, 2016 and said “ the amount so deposited shall be kept in a short term fixed deposit in the UCO Bank, Supreme Court Compound, New Delhi so that interest can be accrued on the same” . Later, the firm had moved an application seeking extension of time for depositing the amount.

OUR TAKE

It is high time the real estate builders take notice of such delays and improve their punctuality. It will only harm their own reputation if the real estate sector loses the customer's confidence. This is not the first time that the giants are asked to pay fines and compensations. If they do not learn their lessons, then certainly, it won't be the last either.