The Supreme Court has ruled that homebuyers retain the right to seek compensation for delayed possession of a property even after taking possession, observing that accepting a flat does not automatically extinguish claims arising from the delay.
A bench comprising Justice Vikram Nath and Justice V Mohan examined an appeal challenging an order of the National Consumer Disputes Redressal Commission (NCDRC), which had dismissed a revision petition after holding that the complainant ceased to be a consumer once possession of the flat had been handed over.
Also Read: UP Student Becomes ISRO Scientist After Failing To Crack JEE By Two Marks
The dispute stemmed from a complaint filed by an allottee alleging a deficiency in service due to delays in receiving possession of a residential flat. The buyer had sought compensation for the delay. However, the builder invoked the arbitration clause in the agreement and sought referral of the dispute to arbitration under the Arbitration and Conciliation Act, 1996.
While the District Forum initially rejected the plea, the matter was later remanded and eventually referred to arbitration. The State Commission upheld the decision, and the NCDRC dismissed the allottee’s challenge, reasoning that he had already taken possession before filing the complaint and therefore no longer qualified as a consumer.
Setting aside that reasoning, the Supreme Court observed that the complaint was not aimed at securing possession of the property but at obtaining compensation for the period during which possession was allegedly delayed. Such claims, the court said, survive even after possession is received.
Also Read: INS Dunagiri, Sanshodhak, Agray: PM Modi Commissions 3 Indigenously Built Naval Ships In Kolkata
The bench noted that whether there was an actual delay, who was responsible for it, and whether compensation is warranted are issues that require adjudication on the merits.
Reaffirming the scope of the Consumer Protection Act, 1986, the court said remedies available under consumer law are supplementary and do not exclude other legal avenues. It emphasised that the presence of an arbitration clause cannot, by itself, oust the jurisdiction of consumer forums.
Referring to earlier judgments, including Fair Air Engineers Pvt. Ltd. v. N.K. Modi, National Seeds Corporation Ltd. v. M. Madhusudhan Reddy, and Emaar MGF Land Ltd. v. Aftab Singh, the bench reiterated that consumer forums continue to have jurisdiction despite arbitration agreements between parties.
The court further observed that once a complaint has been admitted under the Consumer Protection Act, the statutory mechanism cannot be overridden by a private contract. A contractual arbitration clause, it said, cannot defeat a remedy expressly preserved by Parliament.
Also Read: ‘Unwarranted Statements’: India Rejects Pakistan’s Claim About Threats To Muslim Religious Sites
The judges also found fault with the NCDRC for sidestepping the core issue of whether the District Forum and State Commission were justified in sending the matter to arbitration. Instead, the Commission had focused on the complainant’s status as a consumer after taking possession.
Holding that the dispute had never been examined on the merits, the Supreme Court directed that the issues relating to delayed possession and compensation must be properly adjudicated.
The ruling came in the case of TKA Padmanabhan v. Abhiyan Cooperative Group Housing Society Ltd.
