It also said the home buyers cannot be treated as normal investors as they spend their hard-earned money on their homes.
The apex court had earlier directed Jaiprakash Associates Ltd to deposit Rs 4 crore with the bank to be kept as short-term fixed deposit and give possession of flats to the home buyers in its Kalypso Court project on the Noida-Greater Noida Expressway.
The real estate firm has challenged the order of May 2, 2016, National Consumer Disputes Redressal Commission (NCDRC) imposing a penalty of 12 per cent per annum for the delay in giving possession of homes to buyers.
"We are concerned about the tears of the home buyers who cannot be taken for a ride by builders. They cannot be taken as a normal investor ... they spend their hard earnings for the homes," a bench of Chief Justice Dipak Misra said.
The counsel for the flat buyers said they were handed the flats in 2016, though these were to be given in 2011 and said that the interest component needed to adjudicated.
Senior advocate Krishnan Venugopal said the NCDRC order of imposing 12 per cent penalty was unjust and arbitrary.