[Maradu demolitions] Supreme Court denies flat owners claim to any interest on amounts paid by them to builders

The Supreme court on Friday ordered that the flat-owners of the buildings that got demolished for violation of Coastal Regulation Zone (CRZ) norms in Kochi's Maradu are not entitled for any interest on the amounts paid by them to the builders.

A bench of Justices L Nageshwar Rao and BR Gavai passed the said order while taking into account the fact that the flat-owners had the benefit of staying in the flats for a period of 8-9 years on an average.

Court further relied on the fact that the land in question belonged to the flat-owners as joint owners, the market value of which had increased substantially, while the flats that were taken possession of in the years between 2009-2013 would have depreciated in value.

The flat-owners had purchased their apartments by paying instalments somewhere between 2007 to 2013 depending on the construction of the particular building complex.

Possession of the flats was handed over between 2009-2013 and, the flat-owners were in possession of the flats since 2009-2013 till 2019 when they were asked to vacate the flats for the demolition of the buildings.

It was noted by the Court that the amount of Rs.25 lakhs had been paid as interim compensation by the State Government in 2019 itself to all aggrieved flat-owners.

It was also found that except Holy Faith builder, the other builders had also paid the balance amount to which the flat-owners were entitled.

A Committee headed by Justice K. Balakrishnan Nair, Retired Judge of the Kerala High Court which was constituted to look after the payment of the amounts to each flat-owners, submitted before court that the particulars of the payment made in instalments by the flat-owner was not available and, therefore, it is difficult to determine the calculation of interest in respect of at least 1/3rd of the flat-owners.

As far as the remaining flat-owners were concerned, the Committee informed the Court that it was not easy to calculate the interest that has to be paid.

"The committee pointed out the procedural difficulties and also mentioned that if it was to do this exercise, all the cases will have to be re-opened with notices to the Builders and the flat-owners of each flat and the entire exercise would take at least 6 months to materialize, not to mention the further unforeseen complications that might arise due to lack of material data on record...", noted the bench.

Therefore, relying on the said position, Court was of the considered view that the flat-owners were not entitled for any interest on the amounts paid by them to the builders.

Case Title: The Kerala State Coastal Zone Management Authority Member Secretary vs. Maradu Municipality& Ors.