More Stories

Informist, Friday, Jun. 19, 2026

 

NEW DELHI – The Bombay High Court has held that as the Real Estate (Regulation and Development) Act, 2016, is a special enactment, it will prevail over the Indian Contract Act, 1872, a general law, on the issue of compensation payable to allottees for delay in getting possession of their apartments. The high court's observation followed confusion that on the one hand, the real estate Act gives an unqualified absolute statutory right to allottees to claim interest for delayed possession unimpeded by any condition, and on the other, the contract Act lays fetters on that right, making it subject to giving notice of intention to claim compensation. 

 

Section 89 of the Real Estate (Regulation and Development) Act gives it an overriding effect over anything inconsistent with the other laws and the retroactive application of this Act would impose an obligation on the promoter to pay interest for the delayed possession, even without notice from allottees, said the court.

 

The handing over of possession as per terms of agreement or as per the date specified is sacrosanct, remaining unqualified by any contingencies outside the agreement and is not affected by the acceptance of delayed performance, said Justice Sharmila U. Deshmukh. "The allottee would be well within their statutory right to claim interest for every month of delayed possession for the period specified in the flat purchaser's agreement till the date of handing over possession," said Justice Deshmukh. The high court upheld a Maharashtra Real Estate Appellate Tribunal's ruling that asked the promoters of CCI Projects Pvt. Ltd. to pay interest to allottees for delayed possession of an apartment in a building known as Wintergreen in Maharashtra.  

 

The case has its genesis in various allottees booking apartments in Wintergreen in 2011, wherein the possession date was specified as 2015 with grace period of six months. After not receiving possession from the developers, the allottees sought relief for handing over possession of the apartments along with payment of interest at the rate of 10.35% on the amount paid from the agreed date of possession, till the actual date of getting the apartments. The appellate tribunal allowed the allottees' petition and asked the promoters to pay interest at the rate of State Bank of India’s highest marginal cost of lending rate plus 2% to allottees on the amount paid by them for delayed period of possession. 

 

The appellate tribunal held that there was no authentic evidence to show that the allottees had accepted the revised date of possession or acquiesced or waived their right to interest. It held that the allottees stayed with the project despite the promoters failing to give possession as per the agreed date and, therefore, they get the statutory right to claim interest for delayed possession. Challenging the appellate tribunal's order, the promoters moved the high court.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.