Legal remedies available to a home buyer in case builder delays in delivering the possession

May 30, 2018
By Advocate Chikirsha Mohanty

If your builder has delayed in giving possession of your flat, you can take any of the following remedies as discussed here to claim a refund of money or possession of flat.

1. Approach Consumer Forum- This is the most common forum to bring an action against the builder for deficiency in services under the agreement between the homebuyer and the builder. The homebuyer is covered under the definition of “consumer” as defined in Consumer Protection Act, 1986 only if the house is purchased for his own use and not for any commercial purpose. Deficiency in services includes a delay in possession. This is a cost-effective manner as the court fee charges are very nominal.

There is a three-tier machinery for redressal of consumer grievances under the Act. The District Consumer Forum is the initial forum and has jurisdiction to entertain complaints where the value of the house and the compensation if any, claimed does not exceed Rs. 20,00,000 (Twenty Lakhs). Where the value of the house and the compensation if any claimed exceeds Rs. 20,00,000 but does not exceed Rupees One crore, the complaints will be entertained by State Consumer Commission which is established in each state. If the value of the house and the compensation if any claimed exceeds rupees one crore, the National Commission Disputes Redressal Commission will have the jurisdiction to entertain such complaints.

You can file a consumer complaint either where the registered/ branch office of the builder is located or where the flat you purchased from the builder is situated.

2. File a case before Regulatory Forum- You can also file a complaint with Real Estate Regulatory Authority under section 31 of the Real Estate (Regulation and Development) Act, 2016. This authority is specifically constituted for speedy and effective adjudication of buyer- builder disputes. Under RERA if the builder fails to give possession as per the terms of the agreement for sale, then the buyer if he wishes to withdraw from the project, he can withdraw and is entitled to receive the amount paid so far and along with the interest.

If the homebuyer wishes to continue with the project, he is entitled to receive interest for every month of delay.
3. File a Civil Suit- If the builder fails to deliver the property on the date as stipulated in the agreement then you can file a civil suit as there is a breach of obligations as per the agreement. You can approach a civil court and file a suit for injunction/damages or claim refund of the amount paid to purchase the flat and interest thereof. If you approach the civil court, you can get an immediate order for an injunction under Order 39 Rule 1 and Rule 2 of CPC. However, there is no stringent timeline for adjudication of the suit and hence it may take longer as compared to other alternatives. In case, you are not a consumer, for instance, if you have bought flats for reselling purposes then you are not covered within the ambit of “consumer” and hence you can opt for filing a civil suit.

4. Initiate out of Court settlement- You can also opt for arbitration if there is an “Arbitration clause” in the builder- buyer agreement. Usually, it takes 3-6 months for resolving a matter through arbitration. There is no trial under this alternative and no evidence is considered while passing the award. In a recent judgment, NCDRC has held that even when there is an “arbitration clause” in the builder- buyer agreement. 

5. File a Criminal complaint- If your builder has cheated or defrauded you then you can file a criminal complaint under the provisions of Indian Penal Code for cheating, etc. A bailable warrant can be issued against the builder if you opt to file a criminal complaint.

Note: While claiming the compensation you can claim interest on the payment made till date. If the homebuyer is staying in a rented accommodation, then the money spent on rent till the possession is delayed. Also, he can claim loss of opportunity caused to the purchaser, had he invested his money elsewhere.


Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.

Popular Property Lawyers in India

Advocate Prabhjit Jauhar
Connaught Place, Delhi
22 years Experience
Advocate Harish Malhotra
District Court, Gurgaon
22 years Experience
Advocate Shikhar Khare
Jangpura Extension, Delhi
6 years Experience
Advocate Prashant Mendiratta
Lajpat Nagar 4, Delhi
26 years Experience

These guides are not legal advice, nor a substitute for a lawyer
These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

Legal Services

Document Review - Gift Deed

4.3 | 37 ratings
Review + 30 Min phone call - Gift Deed review by a local experienced advocate
Draft a Gift Deed

4.6 | 182 ratings
30 Min Intro call + Start to finish help - Gift Deed drafted by a local experienced advocate
Document Review - Sale Deed

4.8 | 73 ratings
Review + 30 Min phone call - Sale Deed review by a local experienced advocate
Property Registration

4.7 | 291 ratings
Get your property registered through an experienced local advocate
Title Opinion Report

4.8 | 193 ratings
Get a detailed Title Opinion Report by expert real estate lawyers in your city
Draft an Agreement to Sell

4.9 | 94 ratings
30 Min Intro call + Start to finish help - Agreement to sell drafted by a local experienced advocate
Property Verification / Due Diligence

4.8 | 421 ratings
Property Verification, Title Search and due diligence conducted by a local experienced advocate
Legal Notice for Delay in Construction

4.4 | 24 ratings
30 Min Intro call + Start to finish help
15 Minutes Property Advice Session by Phone

4.8 | 541 ratings
Ask questions and get advice from a local experienced advocate on your Property Matter
Document Review - Agreement to Sell

4.7 | 108 ratings
Review + 30 Min phone call - Agreement to Sell review by a local experienced advocate
Draft a Sale Deed / Property Purchase Agreement

4.6 | 197 ratings
30 Min Intro call + Start to finish help - Sale Deed / Property Purchase Agreement drafted by a local experienced advocate
Legal Heir / Succession Certificate

4.8 | 71 ratings
Apply for a Legal Heir / Succession Certificate through a local experienced advocate
Get free legal advice from top Property lawyers for your specific issue

Property Law Articles

Now file DDA complaints on Facebook and Twitter

How to get your property back?

Steps to get back your property from illegal possession

Homebuyers: Here is how RERA will protect you

Talk to a lawyer for your legal issue