Builder's Liability For Delayed Possession Ends With Valid Possession Offer: NCDRC

Brief Facts of the Case

The complainant booked a flat with Jaiprakash Associates/builder and had alleged a delay in handing over the possession of the flat. The complainant filed for compensation for the delay in the offer of possession and a refund of the amounts charged with interest before the National Commission. The consumer complaint was allowed, and the commission directed compensation of 6% per annum on the deposited amount for the delay in handing over possession and litigation costs of Rs.50,000. The Complainant, however, filed a review application in the National Commission challenging the promised date of possession and the actual offer.

Contentions of the Builder

The builder argued that the date of the offer of possession was 25.10.2016, and based on a completion certificate it received, a sub-lease had been executed between the parties on 16.03.2017. Therefore, the actual date of possession was 16.03.2017.

Observations by the Commission

The commission observed that the key issue was the promised possession date versus the actual offer of possession date. As per the agreement, the possession date was July 2014, while the offer of possession was made on 25.10.2016. Based on this timeline, The complainant's delayed compensation claim until 23.04.2018 needed reconsideration. The Supreme Court in Samruddhi Cooperative Housing Society Ltd. vs. Mumbai Mahalaxmi Construction Pvt. Ltd. ruled that the builder's liability for damages ends once a valid offer of possession is made. The commission highlighted that given the offer of possession on 25.10.2016, based on the completion certificate dated 20.07.2016, and the handover on 16.03.2017, the builder's liability for delayed possession compensation ended on 25.10.2016.

The Commission held that the complainant was entitled to a refund for the delay in handing over the possession of the apartment booked by them. Accordingly, it ordered that compensation from the promised date of handing over the flat, i.e., 19.04.2014, to the actual date of the offer of possession, i.e., 23.04.2018, be provided by the builder to the complainants at the rate of 6% per annum on the deposited amount as on 19.07.2014 and litigation costs of Rs.50,000.

Case Title: Mohan Khanna Vs. Jai Prakash Associate Ltd.

Case Number: M. A. No. 209/2024