Supreme Court Ruling Strengthens Homebuyers’ Rights in Delayed Projects

In a significant relief for homebuyers, the Supreme Court has delivered a strong judgment reinforcing consumer rights in delayed housing projects. In the case of Parsvnath Developers vs Others, decided on February 20, 2026, the apex court laid down three crucial principles: developers cannot hide behind one-sided contracts, must obtain occupancy certificates (OC) in a timely manner, and must compensate even subsequent buyers of delayed flats.

The ruling came from a division bench comprising Justice BV Nagarathna and Justice R Mahadevan.

One-Sided Contracts Cannot Limit Compensation

The case arose from delays in handing over flats in the Parsvnath Exotica project in Sector 53, Gurgaon. Homebuyers had paid nearly the full sale consideration, yet possession was not delivered within the promised timeline.

The developer argued that compensation should be limited to ₹10 per sq. ft. per month, as stated in the flat-buyer agreement. However, the Supreme Court found the agreement to be heavily one-sided. While buyers were liable to pay 24% annual interest for delayed payments, the builder offered only nominal compensation for its own delay.

The court held that such clauses are unfair and cannot bind consumers, reaffirming earlier rulings that oppressive contract terms amount to unfair trade practices.

Occupancy Certificate is Mandatory

Another key takeaway from the judgment is that possession cannot be forced without obtaining the Occupancy Certificate. The court stressed that securing the OC is a statutory requirement and an essential step before handing over flats.

The developer has been directed to obtain the OC and deliver possession within six months. Until then, compensation at 8% per annum, as ordered by the National Consumer Disputes Redressal Commission (NCDRC), must continue.

Relief for Subsequent Buyers

Importantly, the court clarified that even subsequent purchasers of flats are entitled to the same relief as original allottees. The right to claim compensation travels with the property unless explicitly barred.

Read more: Indian Aviation Losses Set to Widen Sharply in FY26: ICRA.

Conclusion

The judgment sends a clear message to real estate developers: delays, unfair clauses, and incomplete compliance with legal requirements will not be tolerated. For homebuyers stuck in delayed projects, the ruling strengthens their legal footing and ensures fair compensation for prolonged hardship.

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