If a builder charges you 18 percent interest when you pay late, but pays you almost nothing when it delays your flat or plot, the Supreme Court can correct that imbalance. In Rajnesh Sharma v. M/s Business Park Town Planners Ltd (2025 INSC 1149), decided on 24 September 2025, the Court held that the same high interest a builder charges buyers for late payment can be awarded back to the buyer when the builder is the one in default. This is not automatic. It applies where your agreement is one-sided, and the forum decides it is equitable.
Numbers make this clearest, so start here.
Suppose you paid a builder ₹40,00,000 for a flat, with possession promised in 2018. The builder handed over nothing and you sought a refund. Your forum (consumer commission or RERA) orders a refund.
The rate alone moves the award by ₹25,20,000 on these figures. That is why the rate is the whole fight. In the actual case, the buyer had paid about ₹43,00,000 for a plot booked in 2006, and the Supreme Court raised the interest from 9 percent to 18 percent per annum on the refund.
Use The RTI Playbook to keep your payment receipts, demand letters and order copies in one file. Every interest calculation depends on having dated proof of each payment.
The buyer booked a residential plot in 2006 for about ₹36,00,000 and paid roughly ₹43,00,000 over the years. Possession was promised within two years but was not given even by 2018. The National Consumer Disputes Redressal Commission (NCDRC) ordered a refund with 9 percent interest. The buyer appealed to the Supreme Court for a higher rate.
The Court looked at the agreement and found it lopsided. Its own words capture the imbalance:
For a default on the part of the buyer, interest at 18 percent was liable to be charged. However, a default on the part of the developer in handing over possession would make him liable to pay interest only at the savings bank rate.
The Court refused to let that stand. It held:
Equity and fairness demands that the respondent be put to the same rigours for charging 18 percent interest and face consequences similar to those imposed on the appellant.
So the bench of Justices Dipankar Datta and Augustine George Masih enhanced the refund interest from 9 percent to 18 percent per annum simple interest, matching the very rate the builder reserved against the buyer. The Court was clear that there is no principle of law that interest a builder charges on a buyer's default can never be granted to the buyer for the builder's own default.
The core idea is reciprocity. If a contract punishes the weaker party at a steep rate but lets the stronger party walk away cheap, a court can read the same rate against the builder. The high rate is not a reward; it is the contract's own yardstick turned around. This is fact-specific and discretionary. You are not guaranteed 18 percent. You must show your agreement is genuinely one-sided.
You have two main forums. You can usually choose one, and the Supreme Court has confirmed RERA and consumer remedies can both be available.
Forums often award 9 percent to 10 percent as a default rate. The 18 percent outcome flows from a specific one-sided clause and the Court's equity discretion. Plead the clause, plead the imbalance, and ask for parity. Do not assume the higher rate is yours by right.
No. The rate is fact-specific and discretionary. In Rajnesh Sharma v. M/s Business Park Town Planners Ltd (2025 INSC 1149) the Supreme Court applied 18 percent because the agreement charged the buyer 18 percent on default but gave the builder a near-free pass. You must show a similar one-sided clause and ask the forum to apply equity. Many cases still get 9 percent to 10 percent.
In this judgment the Supreme Court awarded 18 percent per annum simple interest on the refund. Simple interest is calculated only on the principal you paid, for the period of delay, not on accumulated interest. Your award letter should state the rate, the start date and whether it is simple or compound.
Both can be open to a homebuyer, and the Supreme Court has allowed buyers to choose. RERA Section 18 is purpose-built for refund with interest on delayed possession. The consumer commission route is what the buyer used in Rajnesh Sharma. Pick one forum, keep your proof tight, and quote the asymmetric clause in your pleadings.
You can move for execution of the order and seek a recovery certificate so the dues, including the enhanced interest, are recovered like a revenue arrear. If the builder is also withholding your conveyance deed or refusing to form the society, escalate those grievances in parallel.
The judgment is a final decision of the Supreme Court of India in an appeal, dated 24 September 2025, reported as 2025 INSC 1149. There is no higher forum, and no stay applies to it. It is binding precedent on the equity principle that a builder's own default-interest rate can be applied against the builder.
Reviewed by Dr. Shrawan Kumar Pathak. This article is general information, not legal advice. Interest rates in delay cases are discretionary and fact-specific.