In a major victory for homebuyers, the Supreme Court has ruled that consumer courts can step in to protect buyers from one-sided builder agreements, ensuring fairness under the Consumer Protection Act, 2019.

The case involved a real estate developer and homebuyers who booked an apartment in 2014. The contract stated that if the buyer canceled, 20% of the Basic Sale Price (BSP) would be forfeited. When the buyers canceled and sought a full refund, the National Consumer Disputes Redressal Commission (NCDRC) ruled in their favor, reducing the forfeiture to 10% and ordering a refund with 6% interest per annum.

The developer challenged this decision, arguing that the buyers canceled due to market conditions, not any fault on their part. However, the buyers highlighted the unfairness of the agreement, which imposed steep penalties on them while offering minimal compensation if the developer delayed possession.

The Supreme Court upheld the NCDRC’s decision, stating that:

✅ Forfeiture is capped at 10% of BSP, making it fairer for buyers.
✅ One-sided contracts that burden buyers are unfair trade practices.
✅ Developers must ensure balanced agreements that protect consumer rights.

While the Court removed the 6% interest on the refund (since buyers voluntarily canceled), it reaffirmed that homebuyers should not be penalized by unfair clauses. 

How This Benefits Homebuyers?

🔹 More protection against unfair penalties in builder agreements.
🔹 Consumer courts can now intervene in one-sided contracts.
🔹 Encourages transparency in real estate deals, boosting buyer confidence.

🔗 Read the full article here:
https://www.moneylife.in/article/consumer-fora-can-interfere-with-onesided-agreements-between-builder-and-buyer-supreme-court/76284.html