HOW TO APROACH COMMISION IN CASES OF DELAYED POSSESSION AFTER

THE BUILDER BUYER AGREEMENT?

The failure of the builder/ developer to deliver possession of the flat / plot sold to them and a
complaint filed for the benefit of or on behalf of all such consumers and claiming same relief for
all of them, would be maintainable under Section 12(1)(c) of Consumer Protection Act.1

LANDMARK CASES

S.No CASE FACTS JUDGEMENT

 The Complainants
1. Jitendra Balani v. Unitech had booked Commission found that
residential none of the reasons given
Consumer Case No. 510 of by the Builder for the
apartments with
2015(NCDRC) delay, such as non-
Unitech
(Defendant). availability of
construction material or
 Buyer’s Agreement labour, were tenable. The
dated 16.04.2010 Builder was directed to
was executed deliver possession of the
between them. flats to the Complainants
and pay compensation
at 12% simple
 Builder was interest as compensation
required to deliver from the time the
possession of the possession was due under
flat to the the Buyer’s Agreement
Complainants till the date possession
within 36 was granted. In relation
months from the with the Complainants
date of the Buyer’s who no longer wanted the
Agreement which flats, the Builder was
he failed to do so. directed to refund the
money paid by them and

1
Developers Township Property Owners Welfare Society vs. Jaiprakash Associates Limited (02.05.2016 - NCDRC)
: MANU/CF/0497/2016.
 also pay interest at 18%
from the date of payment.

 An agreement for
2. Puneet Malhotra v. purchase of The Commission held
Parvsnath Developers property dated that compensation
28.12.2007 was mentioned under the
Consumer Complaint No. Agreement shall be
executed
232 OF 2014 (NCDRC) payable only if the
between the
Complainant and possession of the property
Parvsnath was accepted by the
Developer Complainant, despite the
(Defendant) delay. The Builder was
wherein the ordered to refund the
Complainant opted amount deposited by the
for down payment Complainant, along with
plan, whereby only interest @ 18% per
5% of the sale annum from the date the
consideration deposit was made till the
remained to be paid date on which the refund
at the time of offer was made. Since the rate
of possession. of interest granted
included compensation,
 The construction no separate compensation
was to be or litigation costs were
completed by granted.
December 2010,
however the same
was stopped by the
Builder in July
2008 and had not
been completed till
the day of the
decision.
  Complainant
3. Kaushal Rana v. DLF
Commercial Complexes
Consumer Complaint No.
88 of 2012
 The Builder raised
 Complainants
4. Sandeep Lohia and Ors v.
Parsvnath Developers
Complaint Case
No.34/10, Dated
20thDecember 2014
applied for The Commission found
allotment of a that no construction had
commercial office begun and the refund of
money along with interest
to DLF
had been refused by the
Commercial
Complexes Ltd on Builder without any
11.03.2008. reason. The commission
directed the Builder
to refund the entire
demand for various deposited amount with
sums, which were interest @ 18% p.a., from
paid by the 20.02.2008, till
Complainant. realization. It also
However, when imposed costs of Rupees
construction did Two
not begin on the Lakh towards harassment,
proposed site by mental agony and
2009, the litigation charges. This
Complainant was payable within 90
sought a refund of days from the date the
his money, which Order, failing which
though initially interest would be charged
accepted by the on it at 18% p.a., till
Builder was later realization.
rejected and his
allotment was
cancelled.
booked a flat with The Commission held
Parsvanath that the Builder has
Developers clearly committed a
default. It had been more
(Defendants)
than 7 years since Flat
pursuant to which a
Buyer Agreement was
Flat Buyer

 The Complainants
 Complainant and
5. Nidhi Kumar v. Supertech
Limited
Complaint No. 94/09 Dated
17th October, 2014
 In the second half
Agreement was executed and possession
entered into of the Flats had still not
between the parties been handed over to the
on 01.05.2006. Complainants. The
Commission held that the
Builder’s actions
were assured that amounted to “unfair trade
possession of the practices”. The
Flat would be Commission directed the
delivered within a Builder to refund the
period of 36 principal amount with
months under the interest @ 18% per
Flat Buyer annum from the date of
Agreement. its deposit till date of this
However, even Order and to pay
after expiry of 36 compensation of Rs.
months, there had 4,50,000 to each of the
been no progress at Complainants for causing
the site. harassment and mental
agony. The said amounts
were payable within a
period of 30 days from
the date of the Order
failing which the Builder
was liable to pay interest
@ 24% p.a. on the
amounts.
her husband The Commission held
booked a flat in the that the Builder had
project of admitted that the
possession of the flat was
Supertech Limited
to be delivered before
on 27.11.2007 with
the agreement that March 2009.
the construction of However, construction of
the flat would be the project stood left mid-
completed before way when the Complaint
March 2009. was filed and even during
course of trial the Builder
of the year 2008, had not offered to deliver
 the Complainants possession. The failure of
were informed that the Builder to hand over
the date of delivery possession amounted to
of the flat was an ‘unfair trade practice’.
extended to March The Commission directed
31, 2010 and they the Builder to refund of
were only entitled money paid with interest
to compensation @ @18% per annum on the
Rs.5/- per sq. ft. money advanced by the
per month for the Complainants from the
period of delay in date of deposit till the
delivery of date of its realization.
possession.

PIONEER URBAN LAND & INFRASTRUCTURE LTD VS GOVINDAN

RAGHAVAN SC 2019
HELD-
BY NCDRC
The National Commission after considering the facts asked the developer to refund the money
along with interest @10.7% which was greater than the rate of interest prescribed in the agreement
after considering the cost of borrowing of the loan and rate prescribed under the Haryana Real
Estate (Regulation and Development) Rules, 2017. It was also held that although the developer
obtained the Occupancy certificate during the pendency of the complaint before the court, owing
to the delay being more than 2 years and also since the buyer had already bought another flat, the
developer could not thrust upon the buyer the possession of the flat
BY SUPREME COURT
Terms of a contract will not be final and binding if it is shown that the flat purchasers had no option
but to sign on the dotted line, on a contract framed by the builder. It further held that incorporation
of one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the
Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of
selling the flats by the builder.
The Supreme Court analyzed the agreement and compared the options available to the builder and
to the buyer in matter of right of cancellation/ termination, rate of interest and when the amount
should be refunded. The Court noted that there were stark incongruities between the remedies
available to both the parties and it had no hesitation in holding that agreement was one-sided and
the buyer was made to sign on the dotted lines.
Though the agreement was not under the RERA regime, the rate of interest applied is that under
RERA and the rate of interest mentioned in the contractual agreement was ignored.