26 March 2025 Civil Appeals >> Civil & Consumer Law   |   Property Law >> Personal Law  

The Supreme Court in The Chief Officer, Nagpur Housing And Area Development Board (A Mhada Unit) & Others v/s Manohar Burde., partly allowed an appeal challenging a Bombay High Court order that had enhanced the interest rate awarded to a flat buyer for delayed possession. The respondent-petitioner had booked a 3 BHK flat in 2009, paid instalments, but faced significant delays in possession and demands for additional amounts.

The petitioner initially approached the State Consumer Disputes Redressal Commission (SCDRC), which ruled in his favor, directing possession and 15% p.a. interest for the delay. On remand, the SCDRC reiterated the 15% interest and added a Rs. 10,00,000 compensation if construction wasn't completed, along with other costs.

The National Consumer Disputes Redressal Commission (NCDRC) partly allowed the developer's appeal, reducing the interest rate to 9% p.a. and the consolidated costs to Rs. 50,000. The petitioner's subsequent review petition and the developer's Special Leave Petition against the NCDRC order were dismissed.

However, the Bombay High Court allowed the petitioner's writ petition, setting aside the NCDRC order and restoring the 15% interest rate. The High Court found the NCDRC's reduction in interest unjustified.

The Supreme Court, after hearing both parties, modified the High Court's order. While acknowledging the delay, the Court found the 9% interest rate awarded by the NCDRC to be fair and reasonable, especially since the petitioner opted for a refund. The Court distinguished the case from precedents involving office premises or specific balancing of equities. Consequently, the Supreme Court restored the 9% interest rate ordered by the NCDRC.

Furthermore, considering that the appellant was a state instrumentality and the delay wasn't due to personal animosity, the Supreme Court reduced the compensation amount from ?10,00,000 to ?7,50,000 to meet the ends of justice. The appeal was partly allowed with no order as to costs.