Property developer must respect contractual commitment: SC

Unitech Resorts Ltd was today directed by the Supreme Court to refund Rs 15 crore to 39 home buyers in its Gurgaon project, saying a property developer must respect the contractual commitment and live up to the terms of the contract.
The apex court while directing Unitech Resorts Ltd to deposit Rs 2 crore in four weeks with Supreme Court registry said the firm by "delaying or procrastinating" the completion of the flats cannot base its stand on "excuses or any subterfuge" to advance the stand that constructions take time.
"It needs no special emphasis to state that the property developer has to respect the contractual commitment. It has to live up to the terms of the contract and gain trust so that the people who dream of houses can repose faith in him. Not for nothing, it has been said, 'the foundation of any economy is faith and if faith is lost, everything is lost'.

"True it is, there is a saying, 'Rome was not built in a day' but it is in the realm of metaphor," a bench of Justices Dipak Misra, Amitava Roy and A M Khanwilkar said.
The bench noted that Rs 16.55 crore was deposited by the 39 home buyers who had booked flats in Unitech Vista project in sector-70, Gurgaon and are before the court.
It also noted that the company has deposited Rs 15 crore with apex court registry in compliance with an earlier order.

"As Rs 15 crore has been invested and some interest has accrued, let the same be given to the respondents (home buyers) on pro rata basis on proper identification by the counsel.

"The appellant company is directed to deposit a further sum of Rs 2 crore within four weeks hence," the bench said and posted the matter for further hearing on January 11, 2017.
The apex court said, "the appellant (Unitech) by delaying or procrastinating the completion of the flats cannot base its stand on excuses or any subterfuge to advance the stand that the constructions take time".
Taking the real estate company to task for saying
construction takes time, the apex court said "the submission ... Rests upon the metaphor that 'Rome was not built in a day' but serves no purpose. It is flat or money. And nothing else."

"The respondents (home buyers) collectively make a demand for refund of money because they have fought the litigation with ceaseless vigour and enormous hope," it said.
The bench, which heard the grievances of some of the home buyers who were present during the hearing, recorded their anguish and said, "the voice of anguish is echoed in the court room as they say their dreams have been shattered and they have been constrained to pave the path of impecuniosity".
The home buyers, through advocate Brajesh Kumar, refused to accept the proposal given by senior advocate Abhishek Manu Singhvi, appearing for Unitech, that three towers will be completed by end of April 2017 and some of them will be given flats along with some amount as directed by the court.

He said that Rs 5 crore deposited by the company with the apex court be distributed among the purchasers towards principal amount and flats be handed over by April 2017.
Singhvi said the remaining Rs 10 crore deposited with the apex court should be given back to the company for facilitating the construction.
The flat-buyers who were present in the court room and through lawyers outrightly rejected the proposal and demanded refund, along with interest and compensation.
The apex court had on August 17, directed the embattled real estate firm to deposit Rs 15 crore principal amount by September-end to pay back investors and home buyers who were not given possession of the flats on time.

Investors have told the court that they had paid money to the firm on time and the company was scheduled to hand over the possession of flats in 2012 but has not done till date.
Over two dozen home buyers of Unitech's housing projects in Noida and Gurgaon had approached the National Consumer Disputes Redressal Commission (NCDRC) after the builder had failed to give them possession of the flats as per schedule.
The consumer forum had asked Unitech to refund the money to the home buyers with interest.
The apex court had earlier asked the company to deposit an interim penalty of Rs 5 crore with the court registry after the firm challenged the order of the consumer forum which had asked the developer to pay Rs 5 crore penalty to three buyers of its Burgundy project.

The court had said the penalty deposited with the court will be awarded to the buyers or returned to Unitech, depending on the outcome of the case.