If you are stuck in such a situation, here is what to do.

Mr. Alok Verma invested in an under-construction apartment in a large-scale project by “Apex Developers” in the city of Vidhanpur. According to the Builder-Buyer Agreement (BBA) he signed, the possession date for his flat was set for June 30, 2023. The agreement also included a standard 12-month grace period, which contractually obligated the builder to hand over the property by June 30, 2024, at the latest.

Despite this deadline passing, Mr. Verma has not received possession of his new home. When he pursued the matter, the builder defended the delay by referencing a COVID-19 related extension granted by the state’s Real Estate Regulatory Authority (RERA). This general order, issued during the pandemic, treated the lockdown period as a “Force Majeure” event and granted a blanket extension to developers for their project registration validity. The builder is also pointing to the project’s new, extended RERA registration deadline of December 31, 2028, as justification for not being in default.

Mr. Verma’s understanding is that the RERA order was an administrative measure to extend the project’s overall registration and does not automatically alter the specific possession date committed to in his individual BBA. Furthermore, the “Force Majeure” clause in his agreement typically allows for an extension only for the actual duration of the disruption, not for several years. As per his BBA, the builder’s obligation to pay interest for the delay should have commenced from July 1, 2024, which is a substantial amount calculated at the agreed-upon rate on the total sum he has already paid.

Advice in such cases

If you find yourself in a similar situation, it is crucial to act systematically to protect your investment and rights.

• Review Your BBA: Carefully read your Builder-Buyer Agreement, paying close attention to clauses related to the possession date, grace period, delay penalties (interest), and force majeure.
• Document Everything: Compile all your documents, including the BBA, payment receipts, allotment letter, and any email or written correspondence with the builder regarding the project status and possession date.
• Send a Legal Notice: The first formal step is often to have a lawyer send a detailed legal notice to the builder. This notice should outline the breach of contract, state your demand for immediate possession and payment of delay compensation as per the BBA, and warn of legal action if the demands are not met.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

Several laws are relevant in such disputes, providing a framework for homebuyers to seek justice.

• The Real Estate (Regulation and Development) Act, 2016 (RERA): This is the primary legislation governing the real estate sector. Section 18 of RERA is particularly important, as it entitles the allottee to claim a refund with interest or demand interest for every month of delay until the handing over of possession.
• The Consumer Protection Act, 2019: A homebuyer is considered a ‘consumer’ who has availed a ‘service’. Deficiency in service, such as delay in possession, allows the buyer to file a complaint before the appropriate Consumer Disputes Redressal Commission (District, State, or National) to seek possession, compensation, and litigation costs.
• The Indian Contract Act, 1872: The BBA is a legally binding contract. A delay in possession is a breach of this contract, allowing the aggrieved party to sue for damages and specific performance.
• Bharatiya Nyaya Sanhita, 2023 (BNS): While this is a civil dispute, if there is evidence of fraudulent intent from the beginning, such as collecting money without any intention to build or complete the project, criminal charges like cheating (Section 318 of BNS) could potentially be invoked.

If you are the complainant

As the homebuyer (the complainant), you must be proactive in building your case.

• Gather All Proof: Systematically organize your BBA, payment records, bank statements showing transactions to the builder, and every piece of communication.
• Create a Timeline: Prepare a clear timeline of events, from the booking date to the promised possession date and the subsequent delay.
• File a Formal Complaint: Based on your lawyer’s advice, decide the best forum to file your complaint—RERA or the Consumer Commission. Your complaint should be drafted precisely, stating all facts, attaching all evidence, and clearly specifying the relief you are seeking (e.g., possession with interest, refund with interest).
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

As the victim of the builder’s delay, your focus should be on enforcing your contractual and statutory rights.

• Know Your Rights: Understand that the BBA is the primary document defining your relationship with the builder. A general RERA extension for project registration does not automatically nullify the possession date agreed upon in your BBA.
• Calculate Your Dues: Accurately calculate the delay compensation (interest) you are owed from the date the grace period ended. This figure will be a key part of your legal claim.
• Choose the Right Forum: Discuss with your advocate whether RERA or the Consumer Court is more suitable. RERA is often faster and specifically designed for such issues, while Consumer Courts can grant broader relief, including compensation for mental agony.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

Typically, the police do not intervene in matters of delayed possession as they are considered civil disputes arising from a breach of contract. If you approach a police station, they will likely advise you to seek a remedy through civil courts, RERA, or the Consumer Commission. Police involvement is warranted only if there is a clear element of a criminal offense, such as cheating, fraud, or criminal misappropriation, which must be substantiated with strong evidence of malicious intent from the outset. In most cases, law enforcement will register a complaint only upon the direction of a court.

FAQs people normally have

Can a builder legally use a RERA COVID extension to deny delay compensation?

Generally, no. Courts and RERA authorities have often held that a blanket administrative extension of a project’s registration deadline does not automatically change the possession date specified in an individual BBA. The builder must prove that the COVID-19 pandemic directly caused the delay to their specific project to benefit from the ‘force majeure’ clause, and even then, only for the actual period of disruption.

Is it better to file a case in RERA or the Consumer Court?

Both are viable options. RERA is a specialized tribunal for real estate matters and is often quicker. It can order the builder to pay interest for the delay and hand over possession. The Consumer Court has a wider jurisdiction and can award compensation for mental harassment and other damages in addition to the relief available under RERA. The choice depends on the specific facts of your case and the relief you prioritize.

What if the builder declares bankruptcy?

If the builder’s company enters insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016, homebuyers are recognized as financial creditors. This allows them to be part of the Committee of Creditors (CoC) and have a say in the resolution plan for the company, including the revival of the project or seeking a refund.

What evidence is required?

To build a strong case against the builder, you will need to provide comprehensive evidence, including:

• The fully executed Builder-Buyer Agreement (BBA).
• The allotment letter for the property.
• All payment receipts or bank statements proving payments made to the builder.
• Any written correspondence with the builder, such as emails, letters, or messages, where the possession date or project delays are discussed.
• The project brochure and advertisements that may have mentioned the completion timeline.
• Recent photographs or videos of the construction site to show the current status and lack of progress.

How long will the investigation take?

Since this is a civil matter, there is no “investigation” in the police sense. The duration of the legal process depends on the forum chosen. RERA proceedings are mandated to be resolved within 60 days, but in practice, it can take anywhere from 6 to 12 months. Cases in the Consumer Commissions can take longer, often ranging from one to two years, depending on the complexity of the case and the workload of the commission.

Advocate Sudhir Rao, Supreme Court of India