The Supreme Court, on Monday, granted Parsvnath Developers a final week to comply with orders that favour homebuyers in Gurugram. The developer must deposit the entire amount due, plus 12 percent interest, into the court registry.
Legal experts say the decision strengthens the enforceability of Real Estate Regulatory Authority (RERA) orders. It also reminds builders that they must honour projects or face serious consequences.
The case involves Rita Tikku and Lokaish Tikku, who invested life savings in the Parsvnath Exotica project in Sector 53. They bought flats in 2006 and signed agreements in early 2007. Each apartment cost more than Rs 1 crore, and the developer promised possession within 36 months.
Between August 2006 and February 2014, the couple paid a total of Rs 1.78 crore. Despite full payment, the project remained incomplete and they never received possession.
In 2021, the buyers approached Haryana RERA (HRERA). The regulator ordered the developer to pay interest at 9.3 percent per annum for every month of delay until possession was delivered. The developer did not challenge the order, so it became final and binding.
When the developer failed to comply, the homebuyers filed a petition in the Supreme Court seeking enforcement of the HRERA directions and recovery of their dues.
The bench treated the developer’s repeated non‑compliance as serious misconduct. It froze the personal bank accounts of the company’s directors, issued non‑bailable warrants, and warned that custodial action could follow if the orders were ignored.
Using Article 142 of the Constitution, the Supreme Court exercised its plenary powers to ensure complete justice. Anjali Jhawar, an advocate, explained that Article 142 is used when legislative gaps exist, ensuring that insolvency or other company law proceedings do not impede justice.
The order clarifies that insolvency proceedings cannot shield developers from complying with judicial orders for homebuyers.
Can homebuyers approach NCLT against developers? The Supreme Court’s comments on insolvency were specific to this case and do not close the IBC route for all developers. In a real‑estate company, homebuyers are usually the largest stakeholders. To initiate insolvency, they must gather either 100 homebuyers or 10 percent of the total, whichever is lower. A single financial or operational creditor can also start insolvency proceedings, and the developer company itself can approach the NCLT.
What interest and compensation can homebuyers claim under RERA? Under the Real Estate (Regulation and Development) Act, 2016, buyers have two main remedies if a developer misses the promised possession date:
1. They can withdraw and seek a full refund of the amount paid, plus interest. 2. They can claim compensation for losses caused by the delay, such as rent paid while servicing a home loan. The amount is decided by the RERA authority or the adjudicating officer.
The interest rate is generally the State Bank of India’s highest Marginal Cost of Lending Rate (MCLR) plus 2 percent, but it can vary by state.
Enforcement of RERA orders remains challenging. Once a RERA authority passes an order, it has no independent mechanism to recover money from defaulting developers. The regulator must rely on district administration and revenue authorities, which can take months or years. Developers often challenge RERA orders in appellate tribunals and higher courts, delaying relief.
What does the ruling mean for homebuyers? Legal experts say the Supreme Court’s stance sends a strong message to defaulting developers. Delay is now viewed as fraud rather than a simple contractual default. The Court is willing to target the personal assets of promoters when corporate recovery is blocked.
The ruling is expected to boost confidence among homebuyers seeking to enforce RERA orders, especially when developers repeatedly ignore final orders from the regulator.