Homebuyers Can Seek Compensation For Project Delays Even After Handover, Says Supreme Court

Homebuyers who have taken possession of their flats can still approach consumer forums against real estate developers for deficiency in service, including delay in handing over possession, the Supreme Court has said.

The court said that the right to seek compensation for such delays does not end once the flat is delivered. Homebuyers remain entitled to pursue legal remedies for the period during which the delay occurred.

The court overturned a 2016 order of the National Consumer Disputes Redressal Commission (NCDRC), which had dismissed the complaint on the ground that the appellant was no longer a consumer after taking possession of the flat.

The case involved a member of a Delhi-based cooperative group housing society who was allotted a flat in 2003 and later approached consumer forums alleging delay in handing over possession. The complaint was first filed before the district consumer forum, which in 2009 referred the matter to arbitration. The Delhi State Consumer Commission upheld the decision in 2013. The appellant then approached the NCDRC, which dismissed the revision petition in 2016.

More than two decades later, a Bench of Justices Vikram Nath and V Mohana ruled on the homebuyer’s plea challenging the NCDRC’s order. The court observed that taking possession of a flat does not extinguish a homebuyer’s right to seek compensation for delay in delivery.

The Bench also found that NCDRC had not examined the complaint on its merits. Instead, it dismissed the case solely on the ground that the appellant was no longer a consumer after taking possession of the flat.

In its June 4 order, the Bench observed, “The subsequent receipt of possession cannot, by itself, extinguish the right of the allottee to seek adjudication of a claim for compensation for the alleged delay.”

Referring to the Consumer Protection Act, 1986, the court said consumer remedies are in addition to other legal remedies and the presence of an arbitration clause does not automatically bar the jurisdiction of consumer forums.

The Bench said the consumer complaint should be decided after examining key issues, including whether there was a delay in handing over the flat, whether the housing society was responsible for it, and the manner in which the homebuyer accepted possession.

In its order, the court revived the consumer complaint and directed the District Consumer Disputes Redressal Commission, Dwarka, New Delhi, to decide the matter on its merits. It also asked the commission to dispose of the complaint, pending since 2005, preferably within one year after giving both parties an opportunity to present their evidence.