Homebuyers retain right to claim delay dues after possession: SC

The Supreme Court also ruled that a housing arbitration clause cannot prevent buyers from approaching consumer forums.

The Supreme Court has ruled that buyers who take possession of a flat do not lose their right to later claim compensation for delay in getting that possession, settling a question that has long troubled real estate disputes across the country.

A bench of Justices Vikram Nath and V Mohana passed the order while allowing an appeal by T.K.A. Padmanabhan against Abhiyan Cooperative Group Housing Society Ltd, reviving a consumer complaint that had been stuck in arbitration proceedings for years without a decision on its actual merits.

What the court said

The bench reasoned that a buyer’s grievance about a delayed handover is rooted in the period before the flat was handed over, so simply accepting the keys afterward cannot wipe out an existing claim for the losses caused by that delay. In the court’s view, taking possession and seeking compensation for an earlier delay are two separate matters, and one does not cancel out the other.

The judges also addressed whether an arbitration clause tucked into a housing agreement can block a buyer from going to consumer forums. They ruled it cannot. Once a consumer forum has accepted a complaint, the case has to be heard there, even if the builder points to an arbitration clause buried in the contract.

How the case unfolded

Padmanabhan had moved the District Consumer Forum in Delhi back in 2005, accusing the housing society of failing to hand over his flat on time and seeking damages for the delay. In 2009, the forum sent the dispute to arbitration instead of hearing it directly, a move that was later backed by the Delhi State Consumer Commission and the National Consumer Disputes Redressal Commission (NCDRC), pushing Padmanabhan to take the fight to the Supreme Court.

The NCDRC had gone a step further, ruling that Padmanabhan stopped counting as a “consumer” once he accepted the flat without objection. The Supreme Court rejected that reasoning outright, pointing out that his real complaint was about the delay, not about getting possession itself, and that no forum had actually examined whether the delay happened, who was at fault for it, or how much compensation might be owed.

With that, the apex court scrapped the rulings of all three lower forums and sent the complaint back for a proper hearing on its merits, asking that it be wrapped up within a year given the case has already dragged on for two decades.