Home Buyers Can Demand Interest On Refund Even After Accepting Refund Without Protest: NCDRC [Read Order]

Home Buyers Can Demand Interest On Refund Even After Accepting Refund Without Protest: NCDRC [Read Order]

The National Consumer Disputes Redressal Commission (NCDRC) recently allowed a disgruntled home-buyer to claim interest on the refund amount received by him post the builder’s inability to deliver possession of the booked flat, despite the fact that he had earlier accepted the refund amount without any protest on the lack of interest.

The NCDRC was hearing an appeal filed by a couple—Vivek Kishorchandra Mehta and Komal Vivek Mehta, challenging an order passed in January last year by the State Consumer Disputes Redressal Commission, Maharashtra, dismissing their complaint.

They had essentially demanded interest on the refund that they had received due to non-construction of the flat that they had booked. The State Commission had opined that the relationship of the complainants with the builder as consumer and service provider ended when the paid amount was refunded. It had further emphasised on the fact that the amount of refund was accepted by the complainants without any protest.

The NCDRC, however, rejected both the assertions. It ruled that even after the agreement is cancelled, if one party is aggrieved by non-implication of that agreement/understanding, Consumer Protection Act, 1986 allows the consumer to file a complaint.

As regards the question of protest by the complainants, it asserted, “…any protest on their part would have denied them the benefit of receiving the amount of refund and the prudence at that time demanded that they should first accept the refund and later claim for interest.”

The Commission then accepted the contention that since the amount remained with the builders for about one year, they are liable to pay interest on the amount, and ordered, “From the above judgment, it is clear that if money has remained for some time with the opposite parties, they are liable to pay some interest on that amount. As there was no agreement in terms of payment of interest or on the rate of interest and the complainant himself has cancelled the contract and demanded the refund of the amount paid, I deem it appropriate to allow a lump sum compensation equivalent to interest @6% p.a. on the amount refunded of Rs.40,00,000/- for one year. Thus, opposite parties have to pay Rs.2,40,000/- (rupees two lakhs forty thousand only) as interest on the refunded amount to the complainants.”

The appeal was, therefore, allowed and the builder was directed to pay Rs. 2,40,000 to the couple, within 45 days.

Read the Order here