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In a landmark ruling, the National Consumer Disputes Redressal Commission (NCDRC) has asserted that real estate developers cannot charge interest on unpaid dues from homebuyers if the project is delayed beyond the agreed timeframe. This decision upholds the rights of homebuyers and sets a precedent for future cases involving delayed real estate projects.

NCDRC’s Ruling on Delayed Projects

On June 3, the NCDRC confirmed an order passed by a state consumer forum, emphasizing that developers cannot demand interest for delayed payments when the project itself is delayed. The case in question involved homebuyer Gurudarshan Singh, who booked a flat in Faridabad’s The Pranayam for Rs 50.9 lakh. Although the handover date was set for December 2011, the apartment was only ready in 2013. The NCDRC highlighted that the delay in the project’s completion negated the developer’s right to charge interest on late payments made by Singh.

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Supreme Court’s Stand on Interest Charges

The Supreme Court of India has also weighed in on this issue. On April 10, 2024, the apex court set aside an NCDRC judgment that allowed Pioneer Urban and Land Infrastructure Ltd to charge interest on delayed payments from homebuyers. The Supreme Court ruled that the NCDRC was incorrect in permitting the developer to charge interest for delays in monthly installments, thereby quashing the developer’s demand for additional charges.

State Regulators and Conflicting Orders

Despite clear directions from the Supreme Court, several state real estate regulators continue to issue orders that contradict this stance. For instance, Karnataka RERA recently directed a homebuyer to pay interest for failing to meet EMI payments on a delayed Prestige Group project in Bengaluru. This highlights an ongoing issue where state regulators’ decisions are not aligned with the Supreme Court’s directives, leading to confusion and financial strain on homebuyers.

Consumer Forum’s Protective Measures

Contrastingly, the Karnataka state consumer forum ordered a developer to refund the amount paid by a homebuyer, along with 12 percent interest, for delaying the project. The developer appealed this decision to the NCDRC, arguing that the homebuyer should be penalized for not paying timely installments. The state commission noted the significant losses faced by homebuyers due to delays, including the need to pay rent and the escalating prices of properties in Delhi and NCR.

Implications for Homebuyers and Developers

The NCDRC ruling and the Supreme Court’s stance on interest charges for delayed projects provide significant protection for homebuyers. These decisions reinforce that developers cannot unfairly penalize buyers for payment delays when the project itself is behind schedule. Homebuyers are encouraged to stay informed about their rights and seek legal recourse if faced with unjust demands from developers.


The recent rulings by the NCDRC and the Supreme Court mark a crucial step in protecting homebuyers’ interests in the real estate sector. As these decisions gain traction, it is hoped that state regulators will align their orders accordingly, ensuring a fair and just treatment of homebuyers in delayed project scenarios.

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