In a significant ruling protecting homebuyers’ rights, the National Consumer Disputes Redressal Commission has held that a builder cannot escape liability merely by offering possession of a flat without obtaining a valid Occupancy Certificate (OC) or providing promised amenities.
The consumer forum directed Experion Developers to hand over possession of a flat in its “Experion Capital” project in Lucknow, refund more than ₹21 lakh allegedly collected in excess and pay delay compensation with 6% annual interest on the sale consideration amount.
The ruling came in a dispute between homebuyers Preeti Yadav and Pushpendra Kumar Yadav and the developer regarding cancellation of allotment in the Gomti Nagar housing project.
NCDRC Says Possession Without Occupancy Certificate Is Not Valid
A bench comprising AVM J Rajendra (Retd) and Justice Anoop Kumar Mendiratta observed that merely issuing an offer of possession does not absolve a builder of liability unless the flat is fully complete and supported by all mandatory statutory approvals.
The commission stated:
“A mere issuance of an offer of possession does not absolve the builder unless the unit is complete in all respects and is supported by requisite statutory approvals, including OC.”
The order was passed on May 12 while partly modifying an earlier June 2024 order of the Uttar Pradesh State Consumer Disputes Redressal Commission.
Background of the Case
The complainants booked a flat in the “Experion Capital” project in Gomti Nagar, Lucknow, after being approached by the developer’s marketing officials in December 2017.
Key timeline of the dispute:
• ₹5 lakh initial payment made in December 2017
• Flat allotted in January 2018
• Agreement for sale executed on July 10, 2018
• Possession offer issued on April 5, 2022
• Allotment cancelled by builder on September 16, 2022
The buyers informed the commission that they paid a total amount of ₹1.34 crore, including taxes and additional charges.
However, they alleged:
• The project was incomplete
• Promised amenities were missing
• The builder collected ₹21.29 lakh in excess
• Cancellation of allotment was arbitrary
• Builder wrongly forfeited ₹29.49 lakh
The buyers further claimed company officials later admitted informally that the cancellation was issued by mistake.
UP Consumer Commission Had Earlier Granted Relief
The Uttar Pradesh State Consumer Disputes Redressal Commission had earlier directed the developer to:
• Hand over physical possession
• Provide occupancy and completion certificates
• Refund excess amount with interest
• Pay 10% interest on deposited amount
• Pay ₹10 lakh compensation for mental agony
• Pay ₹50,000 litigation cost
The developer challenged this order before the national commission.
Builder’s Arguments Rejected by NCDRC
The developer argued that:
• Completion certificate was obtained on January 7, 2022
• Possession was offered before the contractual deadline
• Buyers defaulted in payments
• Cancellation was lawful under agreement terms
• Matter should fall under RERA jurisdiction
• Buyers were investors and not consumers
However, the national commission rejected these objections.
Consumer Forum Clarifies RERA and Consumer Court Jurisdiction
The NCDRC clarified that remedies under the Consumer Protection Act are additional to remedies available under RERA.
The commission held that consumer forums continue to have jurisdiction even if a project is registered under RERA.
The bench also rejected the argument that the complainants were investors, observing that the developer failed to provide documentary proof showing commercial or speculative intent behind the purchase.
NCDRC Finds Cancellation and Forfeiture Unjustified
The commission observed that the builder’s conduct after cancellation weakened its own case.
It noted that even after cancelling the allotment in September 2022, the developer continued raising financial demands and engaging with the buyers.
According to the commission, this clearly indicated that the cancellation was not genuine or final.
The forum therefore held the cancellation and forfeiture actions unjustified.
Compensation Modified by National Commission
While upholding the major reliefs granted by the state commission, the NCDRC modified the compensation component.
The national commission observed that granting both interest and separate compensation amounted to “multiple compensations for singular deficiency.”
Relying on the Supreme Court judgment in DLE Homes Panchkula Pvt Ltd v D S Dhanda, the commission set aside the separate ₹10 lakh compensation award.
Final Directions Issued by NCDRC
The National Consumer Disputes Redressal Commission directed Experion Developers to:
• Hand over possession within 30 days
• Provide occupancy and completion certificates
• Pay 6% simple interest on ₹1.13 crore from possession due date till valid possession offer with OC
• Refund ₹21.29 lakh charged in excess
• Pay 9% interest on excess amount from deposit date till refund
• Pay ₹50,000 towards litigation expenses
Important Relief for Homebuyers
Legal experts say the ruling reinforces an important principle under consumer and real estate law — possession without statutory approvals and promised amenities cannot be treated as lawful delivery.
The judgment also strengthens homebuyers’ rights against:
• Arbitrary cancellation of allotments
• Illegal forfeiture of money
• Delay in possession
• Excessive charges by builders
• Incomplete projects lacking approvals
The ruling is expected to have wider implications for disputes involving delayed possession and incomplete real estate projects across India.
