Builder Fined Rs 2.5 Lakh For Dragging Homebuyer Into 13 Years Of Litigation

The Allahabad High Court has imposed a penalty of Rs 2.5 lakh on a builder for putting a homebuyer through multiple rounds of litigation over Tthe course of 13 years after failing to deliver possession of a flat.

Notably the builder has been penalised by the court's 2026 judgment in the case 'M/s Aims Max Gardenia Developers Pvt. Ltd. Through Authorized Signatory vs. Mrs. Pratibha Gupta'.

According to the court's order, the homebuyer had paid Rs 35,90,252 for a flat in the builder’s Golf City project in Sector-75, Noida. Possession was promised by the builder by June 2013 under an agreement executed in April 2011, but was not delivered.

Builder Failed To Comply With RERA Order

The homebuyer approached the Real Estate Regulatory Authority in Gautam Budh Nagar. In July 2018, the authority directed the builder to hand over possession and pay interest at 24 per cent per annum from June 30, 2013.

The builder did not comply. Following execution proceedings, a recovery certificate for Rs 41,21,411.88 was issued in March 2019.

The builder then approached the Uttar Pradesh Real Estate Appellate Tribunal and sought a stay on recovery proceedings before the High Court. The writ petition was dismissed, while a special leave petition against it was later withdrawn.

The Tribunal dismissed the builder’s appeal for want of prosecution. It had already been dismissed twice on the same ground before being restored.

The buyer subsequently approached the High Court to enforce the recovery certificate and initiated contempt proceedings when it remained unenforced. A fresh recovery certificate followed.

After its bank accounts were attached, the builder deposited Rs 67,77,518 in December 2022 and filed the present appeal.

Court Affirms 24 Per Cent Interest

The High Court rejected the builder’s reliance on Covid-19 disruption and found that it had not demonstrated reasonable diligence.

The court upheld the 24 per cent per annum interest awarded to the buyer, holding that delayed-possession interest payable by a builder should match the rate chargeable from an allottee for payment default where the agreement provides for such a rate.

The court also found that possession could not be handed over without an occupancy certificate.

Significance Of The Ruling On Homebuyers

The judgment reinforces that builders cannot use repeated litigation or unexplained delays to avoid RERA obligations.

For homebuyers, the ruling shows that the interest payable by a builder for delayed possession can match the rate applicable to an allottee’s payment default, where the agreement provides for it.

The ruling also makes clear that possession cannot be treated as complete without an occupancy certificate, while repeated litigation that delays relief may invite penalties for builders.