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Informist, Friday, Feb. 20, 2026

 

NEW DELHI – The Supreme Court Friday upheld an order by the National Consumer Disputes Redressal Commission, New Delhi, directing Parsvnath Developers Ltd. to pay compensation by way of 8% simple interest to homebuyers till it actually gives possession of flats at the Parsvnath Exotica project being developed by the company at Sector 53, Gurgaon in Haryana.

 

Parsvnath Developers will also pay rebate, litigation expenses to the homebuyers and bear the additional stamp duty charges on account of the delay in handing over the possession. On Friday, shares of the company ended 7% lower at INR 7.19 on the National Stock Exchange.

 

Parsvnath Developers is directed to obtain the requisite occupancy certificate and hand over possession to the homebuyers within a period of six months, said the top court. Till such time, Parsvnath Developers shall continue to pay compensation as determined by the commission without any default, said the apex court.

 

The statute does not impose any embargo on the grant of higher or reasonable compensation merely because the parties have agreed to a particular clause, especially where such clause is found to be unfair or oppressive, said the top court. While consumer fora must act judicially and not arbitrarily enhance compensation, they are not bound to mechanically enforce a contractual term that results in manifest injustice, said the court. Departure from such a clause, which was justified by the nature and duration of the delay and the hardship caused, lies within the statutory competence of the forum, it added.

 

In the instant case, the delay in completion and handing over of possession is not disputed and such failure constitutes deficiency in service, said the top court. The consumer commission has examined the facts, assessed the extent of delay and its impact on the complainants, and determined compensation in the exercise of its powers conferred under the Consumer Protection Act, 1986, said the court.

 

The top court said that terms of the agreement signed between the company and homebuyers were evidently one-sided and had been drafted unilaterally by the developer. The stipulated compensation was nominal and disproportionate, particularly in cases of prolonged delay causing financial strain and mental hardship to homebuyers, said the court.

 

The apex court said that despite extensions of time given by them to Parsvnath Developers, the latter failed to secure the requisite occupancy certificate from the authorities. The real estate company continued to propose handing over possession on an "as is where is" basis without obtaining statutory approvals, said the court. The possession of a home without an occupancy certificate cannot be forced upon homebuyers and obtaining such a certificate was a statutory pre-condition integral to lawful delivery of possession, said the court.

 

Through a series of orders, the consumer commission directed Parsvnath Developers to complete construction of the flats and hand over possession to the homebuyers after obtaining the requisite occupancy certificate from the competent authorities with 8% simple interest, in addition to giving rebate, litigation costs and bearing extra stamp duty charges. Challenging the orders, the real estate company moved the apex court.

 

The petitioner said that the commission exceeded its jurisdiction by travelling beyond the Consumer Protection Act, while granting the reliefs and failed to give due effect to the contractual terms governing the relationship between the parties. Clause 10(a) of the agreement between the parties provided that no claim for damages or compensation shall lie against the developer for any delay in handing over possession caused due to the reasons mentioned therein, therefore, the homebuyers were not entitled to claim compensation by way of interest over and above what was exactly provided, said the petitioner. Further, direction on liability of company to bear stamp duty, registration charges and pay litigation costs were beyond the agreement between the parties, the petitioner said.  End

 

Reported by Surya Tripathi

Edited by Ashish Shirke

 

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