Delays in the possession of flats continue to plague the Indian real estate market, causing immense distress to homebuyers. These delays not only disrupt buyers’ lives but also lead to financial strain, as they are forced to pay home loan EMIs while awaiting possession. Buyers often make life-altering decisions based on the expectation that their purchased flats will be available for occupation, and these legitimate expectations are shattered when developers fail to meet deadlines. The impact on flat purchasers is significant, as they suffer both emotional and financial hardship due to the default of developers. The Supreme Court made a strong statement regarding the distress caused by such delays [1]. The Court acknowledged that flat buyers face severe consequences when developers fail to meet possession timelines, emphasizing that delays, sometimes extending from two to four years, result in buyers having to continue paying EMIs while also incurring the additional cost of temporary housing. In such cases, the Court ruled that the buyer's right to compensation for delays could not be limited by one-sided clauses in the Apartment Buyers Agreement (ABA) and should be assessed reasonably.
In line with this, the National Consumer Disputes Redressal Commission (NCDRC) also ruled in favor of flat buyers in several cases, highlighting the need for developers to be held accountable for delays [2]. In the case of a delayed possession and the builder's liability, the complainant had booked a flat in a project but experienced a delay in possession. The Commission ruled that the builder should compensate the complainant at a rate of 6% per annum on the deposited amount for the delay, in addition to litigation costs. However, the Commission clarified that a builder’s liability for compensation ends once a valid offer of possession is made [3]. In this case, the builder claimed that possession was offered on October 25, 2016, based on a completion certificate, and thus the actual date of possession was March 16, 2017. The NCDRC emphasized that the builder’s liability for compensation was limited to the period between the promised possession date (July 2014) and the actual offer of possession (October 25, 2016), after which the liability ceased. The Commission ordered the builder to pay compensation for the period of delay from the promised possession date until the actual offer of possession, with an additional amount for litigation costs. This ruling was in line with the Supreme Court’s earlier decision, where it was established that a builder’s liability for damages ends once a valid offer of possession is made to the buyer [4]. This principle was reflected in the NCDRC’s decision, which held that once the builder offers possession, their liability for further compensation ceases, even if the buyer has not yet taken possession.
In other cases, the courts have consistently sided with buyers, ordering builders to refund amounts with interest and pay compensation for delays [5]. These rulings highlight the judicial commitment to ensuring that developers fulfil their obligations in a timely manner and are held accountable for the suffering they cause buyers through delays.
More recently, the Delhi State Consumer Disputes Redressal Commission found VSR Infrastructure Pvt. Ltd. liable for providing false assurances regarding the possession of flat units. The complainant had booked three units in the project by paying Rs. 2,43,92,121/- and was assured possession within three years. However, even after 11 years, possession was not handed over, leading to a complaint being filed. The Commission held that the complainant is a consumer under the Consumer Protection Act and that the Delhi State Commission has territorial jurisdiction. The developer was found deficient in service for failing to hand over possession and was ordered to refund the entire amount with interest, compensate for mental agony, and cover litigation costs. Despite these rulings, however, the real estate sector continues to witness instances where builders fail to meet timelines, leading to widespread discontent among buyers.
References:
1. Supreme Court, DLF Home Developers Ltd. v. Capital Greens Flat Buyers Association
2. NCDRC, Mohan Khanna v. Jai Prakash Associate Ltd.
3. NCDRC, Mohan Khanna v. Jai Prakash Associate Ltd.
4. Supreme Court, Samruddhi Cooperative Housing Society Ltd. vs. Mumbai Mahalaxmi Construction Pvt. Ltd.
5. Courts, Anuj Biswas v. Kapstone Construction and Sapna Shukla v. Sanket International Limited
Disclaimer:
This post is for informational purposes only and does not constitute legal advice. The contents are based on general legal principles and should not be construed as specific advice for any individual or entity. Readers are advised to seek professional legal counsel tailored to their particular circumstances before taking any action based on the information provided.
The sharing of this post does not create an attorney-client relationship between the authors, the firm, and the readers. While every effort is made to ensure the accuracy of the information at the time of publication, laws and regulations are subject to change, and no liability is accepted for any errors or omissions.
For further assistance or professional advice, please contact Sansa Legal directly.
Комментарии