Flat Buyers Are Entitled To Get Compensation For Delay In Giving Possession Of The House: SC

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On Monday, the Supreme Court stated that the flat buyers are entitled to indemnify for the delay in getting right over the house and for the failure of the developer to comply with the representation made to them in connection with the provisions of facilities.

The bench comprising of Justices DY Chandrachud and KM Joseph said that in cases where there is a gross delay in handing over of possession beyond the contractually stipulated period, the jurisdiction of the consumer forum to award just and reasonable compensation is not constrained by the terms of a rate in builder’s agreement.

In the above case, the National Consumer Disputes Redressal Commission, dismissed a consumer complaint filed by the buyers and accepting the defense of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that there was no deficiency of service on their part in complying with their contractual obligations and that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation in excess of what was estimated in the Apartment Buyers Agreement.

It was further observed by the bench that it cannot be oblivious to the one-sided nature of ABAs which are drafted by and to protect the interest of the developer. It was also stated by the judges that the same time was manifestly one-sided that is the rights provided to the developer for a default on the part of the home buyer are not placed on an equal platform with the contractual right provided to the home buyer in the case of a default by the developer.

The court said that the decision in DLF Homes Panchkula Pvt. Ltd. v. DS Dhanda, does not prescribe an absolute embargo on the award of compensation beyond the rate stipulated in the flat buyers. The decision does not lay down that there is an absence of jurisdiction in the adjudicatory for a constituted under the CP Act 1986 to award remedial compensation to a flat buyer for the delay of the developer in handing over the possession of the home to the concerned buyer on the agreed date.

SC directed that we have come to the conclusion that it is insignificant to depart the complaint by the NCDRC. Flat owners are authorized for compensation for delay in giving possession of the house and failure of the builder to fulfill the promise of providing facilities.

Devika Paliwal
I am Devika Paliwal, student of BBA LLB (Hons.) spz. in Banking and Finance at University of Petroleum and energy Studies, Dehradun. I have gained experience by interning at various places such as Law firms, High court, RERA Court, etc. Being a law student my area of interest lies in Banking laws, Criminal laws, Corporate laws. I'm an inquisitive person and always like to brush up my skills by reading more and more. Apart from indulging in academics, I'm really fond of cooking delicacy food.