Settlement of Disputes in Real Estate Transactions: A Case Analysis of Akshay Gupta & Ors. Vs ICICI & Ors. by the Hon’ble Supreme Court

The Division Bench of Hon’ble Supreme Court of India comprising of Justices Vikram Nath & Sanjay Karol passed a judgment dated March 25,2025 in case of Akshay Gupta &ors. Vs ICICI &Ors. Civil Appeal No. 1708 of 2023 wherein the Supreme Court appreciated the commercial arrangement for amicable settlement of disputes between Borrowers i.e. Flat Owners, Builders and the Bank.

The Present Appeals were preferred against Common Judgment and Order dated 02.01.2023 passed by National Consumer Disputes Redressal Commission. It rejected the consumer complaints of the Appellants or Flat Buyers where they were demanding quashing of Loan Recall Notice issued by the Bank alleging unfair trade practices and violation of Reserve Bank of India guidelines.

Law laid down under Section 23 of Consumer Protection Act, 1986

Section 23 lays down the Provision of Appeal from the Order made by National Commission within 30 days from the date of such Order. Supreme Court may extend this period of 30 days if it is satisfied that there was sufficient cause for not filing it within said period of 30 days.

Facts of the Case:

Under the Agreement made between the three Parties, there were respective obligations on each of the Parties to be fulfilled and there were defaults in each of the Parties to some extent.

Contentions on behalf of the Bank

Bank would completely waive the outstanding charges and will give a discount of 30 % on the pre-EMI provided pre- EMI charges are paid within reasonable time granted by the court and the entire outstanding amount is settled upfront.

Contentions on behalf of the Builder

The Builder upon instructions has agreed to pay 50 % of the Outstanding Pre- EMI. The Counsel may obtain instructions as to whether the Builder would prefer to waive 5 % outstanding sale consideration or get the amount of Pre-EMI paid by the Appellants to the Bank adjusted against the said  5% balance sale consideration.

Contentions on behalf of the Appellants

As the Builder has agreed to pay 50 % of Pre EMI amount either to the Appellants who can then transfer it to Bank or deposit directly to the Bank. The 30% discount extended by the Bank on the pre-EMI amount should be credited to the benefit of the Appellants.

Issues

Then the case was extended for settlement of the two issues-

• Whether the amounts have been duly communicated or not
• Clarification on the issue of 5% additional pre-EMI payment between the Appellants and the Builder and the payment of pre-EMI of the defaulted amount and the outstanding amount.

Then, they fixed the dates for Payments of Outstanding Amounts. The Hon’ble Supreme Court made sure that the Parties have complied with the Terms and Conditions and ensure the timeline is maintained regarding the Payment.

Analysis of Hon’ble Supreme Court Judgment

The Supreme Court made sure that all the Directions regarding the Payment have been complied with. Then the Parties were given two weeks time for submission of Proof of Deposits and No Dues Certificate.

The Hon’ble Supreme court found that the three Parties have satisfactorily complied with the Terms and Conditions. The Bank had extended the discounts, the builder had discharged its obligations of payment of its share of pre-EMI and the borrowers had discharged their obligations by making the deposits with the Bank of the outstanding amount and also paying to the builder the 5% of the sale consideration which was outstanding.

Then the Appellant asked for Clarification on three issues by the Court–

1. The substitution of the word ‘repaid’ by the word ‘settlement’
2. The Builder may complete minor work in remaining apartments and hand over the possession of the flat to the Appellants.
3. Builder has not issued acknowledgement of the Payments made pursuant to last order.

Then the Hon’ble Court concluded the loan amount as repaid or fully paid up.

 

Conclusion

On the above issues, The Court issued the Directions for handing over possession on or before 31.03.2025. The builder is directed to issue acknowledgment in writing to have received the entire due amount. The Banks were directed to withdraw the recovery proceedings before Debt Recovery Tribunal or any other Forum and the Appellants were directed to withdraw proceedings from RERA.

In this case, the Hon’ble Supreme Court of India successfully facilitated a settlement between the three parties: the flat owners (borrowers), the builder, and the bank. The Court ensured that all the directions regarding the payment of outstanding amounts were complied with, including the waiver of charges, the discount on pre-EMI amounts, and the builder’s payment share. The Appellants, builder, and bank met their respective obligations, resulting in a favorable resolution.

The Court issued clear directions for the builder to hand over possession of the flats to the Appellants by March 31, 2025, and to provide an acknowledgment of the payments made. Furthermore, the Court ordered the bank to withdraw recovery proceedings, and the Appellants were directed to withdraw their proceedings from RERA. The case underscores the importance of amicable settlement and the Court’s role in ensuring timely and fair resolution of disputes between parties in a commercial arrangement.

 

TRISHA SAXENA

SENIOR LEGAL ASSOCIATE

THE INDIAN LAWYER AND ALLIED SERVICES

 

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