• Is flat owner liable to pay interest to developer

I have booked flat and sanctioned loan from HDFC Bank. Tri party agreement was signed for the same.
During the period of construction developer raise demand for payment of installment but bank has suspended disbursement under project owing to non compliance of some condition by developer.

Subsequently suspension was lifted and disbursement was made by bank and accordingly deposited with developer.

Now on possession of flat developer has raised demand for interest payment for the installment  which was delayed due to suspension of disbursement by bank.

Can developer claim interest for that period.
Asked 2 years ago in Civil Law from Gurgaon, Haryana
1) developer cannot claim interest for delay in payment of installment

2) delay arose as builder failed to comply with conditions laid down by Bank 

3) you can in reply to builder demand for interest mention that delay arose on account of his failure to comply with conditions of disbursement 

4) if builder insists pay under protest . 

5) take possession of flat and then move consumer forum against builder and seek refund with interest
Ajay Sethi
Advocate, Mumbai
23398 Answers
1230 Consultations
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Ignore the demand of developer and file a case in Consumer Forum for deficiency of service.
Minansu Bhadra
Advocate, Kolkata
266 Answers
23 Consultations
4.8 on 5.0
1. The delay in making payment by the Bank for and on your behalf was due non compliance of certain contitions by the Developer as detected by the lending Bank,

2. Collect all the letters/documents exchanged by and between the Bank and the developer in this regard,

3. These will stand as very good evidence to prove against the Developer that delay in making payment by the Bank was on account of his fault,

4. If the interest is of not substantial amount, it will be prudent on your part to pay the same under protest, take possession of the flat, get the same registered in your name and then file a complaint case before the local District Consumet Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming refund of the said amount paid, intrest, damage and cost.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
234 Consultations
5.0 on 5.0
1. The delay in your case is attributable to the suspension of disbursement by the bank owing to the default in compliance with some condition by the developer. When the fault lies squarely with the developer her cannot hold you liable in any manner.

2. Has the developer issued you a lawyer's notice, or has simply made an oral demand for payment of interest? Do not pay the interest. You have the right to move the consumer forum against the developer for deficiency in service. The court can order him to deliver the possession and also compensate you for the hardship suffered by you.

3. You can also pay under protest and then move the consumer forum against the developer.
Ashish Davessar
Advocate, Jaipur
18266 Answers
450 Consultations
5.0 on 5.0
Its advisable to send a protest note and make the payment to get the procession of the Flat. if you raise dispute with him now he will not deliver the flat and it will result in huge monitory loss to you. 

Once you are in possession of the flat you can approach the Consumer forum for seeking relief.
Sandeep Hegde
Advocate, Bangalore
361 Answers
97 Consultations
4.8 on 5.0
Hi, developer cannot claim interest as the default was not due to your fault and there was condition breach by the developer so you are not liable to pay interest, if they demand for interest you to aaproach consumer court.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
A. Generally, the Developer cannot claim any interest towards the late payments.

B. However, In the presence of the terms and conditions in the agreement in respect of late payment, the developer can claim interest for delay payment because of  the builder has constructed the building step by step with the assistance of the part payment. 

C. But, in the event of any non compliance of the conditions which against the bye laws of a local authority or not followed the approved plan, in these circumstances the builder has violated the rules and regulation, hence the late payment should be allowed without interest.
B.T. Ravi
Advocate, Bangalore
738 Answers
31 Consultations
5.0 on 5.0
1) if builder has delayed in giving possession builder would be liable to pay interest as per clauses contained in agreement 

2) delay in payment of installment was on account of builder failure to comply with conditions for disbursal of loan .

3)if builder has not raised any demand for interest better take possession of flat from builder . 

4) you can subsequently move consumer forum against builder and claim interest for delay in delivery of possession . 

5) builder will contest your claim and raise counter claim for interest for delay in payment of installment
Ajay Sethi
Advocate, Mumbai
23398 Answers
1230 Consultations
5.0 on 5.0
First check the terms and conditions in the agreement in respect of late payment, the developer can claim interest for delay payment because of the builder has constructed the building step by step with the assistance of the part payment. Developer cannot claim interest as the default was not due to your fault and there was condition breach by the developer so you are not liable to pay interest,

if they demand for interest then You can approach appropriate Court for your remedies
Ajay N S
Advocate, Ernakulam
1918 Answers
19 Consultations
5.0 on 5.0
1. As has been advised earlier, take possession of the flat and get the sale deed registered also so that you go out of the clutches of the developer,

2. After getting the title of the flat registered in your name, file a complaint case as suggested in my earlier post.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
234 Consultations
5.0 on 5.0
Dear Querist
the developer may raise the issues regarding the interest if there is any clause in agreement otherwise not.

but you may raise the issue before consumer court after filing the complaint before Consumer Court of jurisdiction and claim compensation due to delay in possession even after taking possession of the flat.

so it will be better to take possession of the flat and after that first of all send a legal demand notice to developer and if the developer is not ready to make the payment within notice period then file civil suit before Civil Court or file a complaint before Consumer court of jurisdiction.

Feel Free to Call
Nadeem Qureshi
Advocate, New Delhi
3539 Answers
131 Consultations
4.9 on 5.0

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