Homebuyers can seek relief for delay after possession: Supreme Court

NEW DELHI: Taking possession of a flat would not bar homebuyers from raising complaints against real estate companies for deficiency in services. Supreme Court has held that homebuyers can approach consumer forums against developers to seek compensation for delayed possession even after taking custody of the flat. The SC set aside an order of National Consumer Disputes Redressal Commission (NCDRC) which had held that ahomebuyer ceases to be a consumer after taking possession of the flat and could not seek compensation for delay. SC also held that the arbitration clause in homebuyer-real estate company agreement would not block the former from approaching the consumer forum to raise grievances. Twenty-two years after a homebuyer got possession of his flat housing project in Dwarka in NCR, a bench of Justices Vikram Nath and V Mohana allowed his plea to seek compensation for delay in handing over the flat. It said the NCDRC’s reasoning “cannot be sustained”.“The appellant’s complaint was not for delivery of possession simpliciter. His grievance was that there had been delay in handing over possession of the flat and that he was entitled to compensation for such delay. A claim for compensation for delayed possession necessarily arises from the period prior to the actual delivery of possession. 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,“ the bench said. The bench revived the 2005 complaint filed by the homebuyer before the district consumer forum and asked it to decide within a year whether there was any delay. It also asked the forum to decide whether such delay was attributable to the respondent, whether the appellant had accepted possession unconditionally, and whether any compensation is payable. “The claim of the appellant for compensation on account of alleged delay in handing over possession has neither been accepted nor rejected after evidence. Equally, the defence of the respondent society has also not been examined on merits. These issues could not have been concluded at the threshold by holding that the appellant ceased to be a consumer merely because possession had been delivered before the complaint was filed. In such circumstances, it would not be appropriate for this court to record any finding on the factual controversy between the parties,” the bench said. Adjudicating on what should be given primacy – arbitration clause in agreement or Consumer Protection Act – the bench said the 1986 Act creates a special and additional remedy for consumers and the jurisdiction so conferred could not be displaced merely by reference to an arbitration agreement between the parties. “Once that mechanism is validly invoked and the complaint is admitted, the consumer cannot be driven out of that forum merely because the agreement between the parties contains an arbitration clause. A private contractual clause cannot be permitted to defeat the continued operation of a statutory remedy which Parliament has expressly made additional to other remedies under Section 3 of the 1986 Act,” it said.Get the latest India news and live updates. Download the TOI App.