Parity Doctrine – SC Judgment – Implications for Buyers and Developers
Judgment dated 24.9.2025 of the Supreme Court of India in Civil Appeal No.3988 of 2023 of Rajnesh Sharma Vs. M/s. Business Park Town Planners Ltd
On 10.3.2006, the appellant booked the plot in the project of the respondent and advance / registration charges were paid on the same day.
As per the agreement dated 11.12.2007, the possession was to be handed in 24 months of sanction of service plans of the entire colony. Clause 12 provided that time is the essence and in case of default by the buyer, the late payment charges at 18% p.a. on due amount.
On 13.4.2011, after more than five years, the respondent informed for allotment of alternative plot due to changes in the layout plan. Additional amount was demanded for new larger plot.
On 13.4.2011, the addendum to the agreement was executed.
On 11.3.2015, the appellant paid Rs.83,377.67 ps out of which Rs.83,300.76 was paid for interest at 18% p.a. for its default in making the payments.
On 27.3.2017, the appellant terminated the agreement for inaction of the respondent in allotting the plot.
On 27.3.2017, the appellant issued legal notice for refund of Rs.43,13,212/- with 24% p.a. interest and Rs.72,30,000/- for loss of appreciation of property.
In the consumer complaint, the NCDRC accepted the offer of the respondent to repay the principal with 9% simple interest, without going into the merits of the case.
In that context, the question was whether the interest in default charged by the builder can never be granted to the buyer.
Respondent – builder had charged interest at 18% p.am. on the buyer for his default, whereas, the builder agreed to refund the principal amount with 9% interest to the buyer. This is in defiance of logic and reason. The builder for its default should been judged by the same standard and made to pay back 18% interest.
