SC: Homebuyers Can Claim Compensation for Delayed Possession Even After Taking Delivery
New Delhi: In a significant relief for homebuyers, the Supreme Court has ruled that taking possession of a flat does not extinguish a buyer’s right to seek compensation for delayed delivery. The court held that a homebuyer can pursue a claim for compensation even after accepting possession of the property.
A bench comprising Justices Vikram Nath and V. Mohan set aside a 2016 order of the National Consumer Disputes Redressal Commission (NCDRC), which had dismissed a homebuyer’s complaint on the ground that he was no longer a “consumer” after taking possession of the flat without protest.
The case involved a Delhi resident who became a member of a cooperative group housing society in January 2003 and was allotted a flat. He later approached the consumer forum alleging a deficiency in service due to an inordinate delay in handing over possession and sought compensation.
In its June 4 judgment, the apex court observed that the right to claim compensation arises from the period of delay before possession is delivered and is not wiped out merely because the buyer subsequently takes 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 Supreme Court also clarified that the presence of an arbitration clause in the agreement between the parties cannot bar a consumer from approaching consumer forums. Referring to the Consumer Protection Act, 1986, the bench noted that the law is a beneficial legislation intended to provide consumers with a simple, inexpensive and speedy remedy.
The bench found that the NCDRC had failed to address the central issue before it—whether the district consumer forum and the Delhi State Consumer Disputes Redressal Commission were justified in referring the matter to arbitration. Instead, it dismissed the revision petition on an entirely different ground, holding that the complainant had ceased to be a consumer after taking possession. The Supreme Court termed this reasoning unsustainable, noting that the complaint was not merely about obtaining possession but about seeking compensation for the delay in delivery.
The court further observed that key issues—such as whether there was an actual delay, whether the delay was attributable to the housing society, and whether the buyer had accepted possession unconditionally—required adjudication on merits after examining evidence.
Allowing the appeal, the Supreme Court set aside the orders of the NCDRC, the Delhi State Consumer Disputes Redressal Commission and the district forum. It restored the complaint and directed that it be heard afresh by the District Consumer Disputes Redressal Commission, Dwarka.
Considering that the complaint has been pending since 2005, the apex court directed the district commission to make an endeavour to decide the matter, after giving both parties an opportunity to present evidence, preferably within one year from the receipt of the court’s order.
