In a significant ruling for homebuyers, the Supreme Court of India has upheld compensation awarded to flat purchasers who waited years for possession in a Gurgaon housing project. The Court dismissed appeals filed by Parsvnath Developers Ltd and confirmed that buyers are entitled to 8% annual interest for delayed delivery.
The judgment was delivered on February 20, 2026, by a bench of Justice B.V. Nagarathna and Justice R. Mahadevan.
Read also:- Bombay High Court Allows Single Mother to Change Daughter’s Name, Caste in School Record
Background of the Case
The dispute arose from the residential project “Parsvnath Exotica” in Sector 53, Gurgaon. The buyers had approached the National Consumer Disputes Redressal Commission (NCDRC), complaining that despite paying almost the full sale price, possession was not handed over within the agreed period.
The NCDRC had directed the developer to:
- Complete construction
- Obtain the mandatory Occupancy Certificate
- Hand over possession within a fixed timeline
- Pay compensation at 8% per annum from specified dates until actual delivery
- Bear increased stamp duty caused by the delay
- Pay litigation costs
Aggrieved by these directions, the developer moved the Supreme Court.
Builder’s Arguments in Court
Senior counsel for the developer argued that the NCDRC had gone beyond the terms of the buyer agreement. According to the builder, the agreement limited compensation to ₹10 per sq. ft. per month for delay, and no higher interest could be granted.
Read also:- Rajasthan High Court Refuses Relief to New Nursing Colleges, Says Counselling Cannot Be Reopened
The company also claimed that delays were caused by financial constraints, labour shortages, rising construction costs, and changes in government policies affecting approvals.
It further contended that buyers in some cases had accepted possession or received compensation already.
Homebuyers’ Stand
The buyers countered that they had paid nearly the entire sale consideration years ago. Yet, construction remained incomplete and Occupancy Certificates were not secured.
In one case, possession was offered “as is where is,” without obtaining statutory approvals. The buyers argued that such an offer was legally invalid.
They maintained that the long delay - stretching beyond a decade - caused severe financial hardship and mental distress.
Read also:- Jharkhand HC Seeks Answers on 437 Custodial Deaths, Orders Home Secretary to Clarify Judicial
Court’s Observations
The bench made it clear that consumer forums derive their powers from statute, not merely from contract.
“The power to grant compensation flows from the Consumer Protection Act,” the Court noted, rejecting the argument that contractual clauses could restrict statutory remedies.
Referring to earlier judgments, including Lucknow Development Authority v. M.K. Gupta, the Court reiterated that housing construction is a “service” under consumer law, and delay in handing over possession amounts to deficiency.
The Court also relied on Pioneer Urban Land and Infrastructure Ltd v. Govindan Raghavan to underline that one-sided builder-buyer agreements cannot override consumer rights.
On the issue of offering possession without approvals, the bench cited Samruddhi Cooperative Housing Society Ltd v. Mumbai Mahalaxmi Construction Pvt Ltd, holding that failure to obtain an Occupancy Certificate constitutes deficiency in service.
“Possession without an Occupancy Certificate cannot be forced upon the consumer,” the Court observed.
The judges noted repeated undertakings given by the developer during earlier hearings and recorded persistent non-compliance despite extensions of time.
Read also:- Karnataka High Court Cuts Jail Term in ATM Cloning Case, Enhances Fine to ₹2 Lakh Each
Decision of the Court
After examining the record, the Court concluded that:
- The delay in construction was undisputed.
- The developer failed to obtain mandatory statutory approvals within time.
- Compensation at 8% per annum was fair and reasonable.
The Supreme Court affirmed the NCDRC’s orders and dismissed all appeals.
It directed the developer to obtain the required Occupancy Certificates and hand over possession in two cases within six months. Until then, 8% interest must continue to be paid.
In the third case, where possession had been taken in August 2022, the buyers were held entitled to 8% interest from the agreed date of possession until the actual handover date, after adjusting amounts already paid.
With these directions, the appeals were dismissed. There was no order as to costs.
Case Title: Parsvnath Developers Ltd v. Mohit Khirbat & Ors.
Case No.: Civil Appeal Nos. 5289 of 2022, 5290 of 2022, 11047 of 2025
Decision Date: February 20, 2026
