In a recent order 19 October 2016, a three-judge bench of the Supreme Court, comprising of Justices Dipak Misra, Amitava Roy and A.M. Khanwilkar, observed that the property developer has to respect the contractual commitment and 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. These observations came in the case of M/s. Unitech Residential Resorts Ltd. v. Atul Gupta and Anr. [Civil Appeal No(s). 6044/2015, decided on October 19, 2016]. A plea by the builder Unitech to give a part of the money deposited by it in the court so that it could complete the construction of some flats by March, 2017, was rejected by the court since it appeared to the court that the buyers of the flats, who had booked the flats, had lost their faith in the builder.
A total of 39 buyers, submitted before the Supreme Court that their patience was on the burial pyre and they could not wait any longer believing in the concept of optimism and expectation, since the builder M/s. Unitech Residential Resorts Ltd. had not built the flats as assured, and in fact, had compelled them to land up in such a financial crisis that they had never conceived of.
The court observed as under:
“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. The appellant 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. The submission in a way 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 collectively make a demand for refund of money because they have fought the litigation with ceaseless vigour and enormous hope.”
The said builder had deposited a sum of Rs. 15 crores as directed by the court vide order dated 17.8.2016. The court directed that the same be given to the flat buyers on pro rata basis on proper identification. The court also directed Unitech to deposit another amount of Rs. 2 crore for return of the principal and interest to the flat buyers.
Full court order dated 19 October 2016 is given below: