The Supreme Court has dismissed a batch of appeals filed by a developer against National Consumer Disputes Redressal Commission (NCDRC) orders awarding delay compensation to homebuyers of a residential project, in the process clarifying two points that recur constantly in builder-buyer disputes: whether a developer can offer, and effectively compel acceptance of, possession of a flat before a statutory Occupancy Certificate (OC) has been obtained, and whether a consumer forum's power to award compensation for delay can be confined to the rate specified in the builder's own flat buyer agreement.
On the first question, the Court held that an offer of possession without a valid Occupancy Certificate is not a genuine or legally complete offer of possession at all. Occupying a flat without an OC exposes the resident to civil and, in some circumstances, regulatory consequences, including potential action by municipal authorities, and a developer cannot shift that risk onto the buyer by treating a bare handover of keys as satisfying its contractual obligation. An offer made without the OC in hand, the Court held, itself amounts to a deficiency in service under the Consumer Protection Act.
On the second and more broadly significant question, the Court reiterated and applied the principle that the power of a consumer forum to award "just and reasonable" compensation for a deficiency in service is a statutory power conferred directly by the Consumer Protection Act, and that this power cannot be curtailed by a standard-form, one-sided clause in a builder-buyer agreement that caps delay compensation at a token or nominal rate. Where such a clause bears no reasonable relationship to the loss and hardship actually suffered by a homebuyer, a consumer forum is entitled to look past it and award compensation assessed on a fair and reasonable basis. The Court also indicated that this exercise does not require a detailed mathematical reconstruction of loss in every case; a reasoned, proportionate assessment having regard to the delay and the surrounding circumstances suffices.