The National Consumer Disputes Redressal Commission has held that even after giving possession of apartments, developers are liable to pay compensation to homebuyers in a delayed project till the occupancy certificate (OC) has been obtained.

The order of the NCDRC came in a case of Bengaluru-based real estate group Vahe Projects Private Ltd and it was directed to pay 6 percent interest until actual possession to the buyers of Vahe Imperial Gardens, which has been delayed for about seven years.

In an order dated March 3, the court clarified its December 28, 2022 judgement, stating that actual possession will be considered on the date the occupancy certificate (OC) is issued, even after the homebuyers move into the apartments.

NCDRC said that "The homebuyers are entitled to claim compensation delay until the date of the actual possession or the date of OC".

The project Vahe Imperial Garden in eastern Bengaluru's Gunjur was scheduled to be handed over by 2015 to the Homebuyers. The construction agreement was executed in 2013 and currently, the project has 139 apartments across two towers; the cost of each apartment today starts from Rs 60-70 lakh.

After the handover date lapsed, the developer failed to give possession despite having taken 95 percent and in some cases up to 100 percent of the amount.

The NCDRC order noted that the progress reports sent by the developer to the homebuyers did not mention any such delays. However, the homebuyers started moving in without occupancy certificates from 2016-2017 onwards.

Upendra Mishra, one of the first few homebuyers to move in, said, "I had paid more than 90 percent of the amount and every month was clearing the bank EMI. Staying on rent at that time, we had no choice but to move in". He said when the homebuyers moved in, services like Bengaluru Electricity Supply Company Ltd, common amenities and sewage treatment plant were non-functional.

It was added "Even today, we do not have the clubhouse or other amenities. Only one of the two elevators is working and all no-objection certificates (NOCs) are pending". In 2018, the homebuyers filed a case at NCDRC claiming delayed compensation and a complete handover of the apartments. On December 28, the court passed an order for the homebuyers asking the developer to pay delayed compensation to the homebuyers till the date of possession.

It was stated by the homebuyers that "However, it was unclear about the date of possession given that the homebuyers have already moved in. Thus on March 3 the court again clarified that the date of possession will be counted till the OC has been issued".

The tribunal noted the Supreme Court judgement of Supertech Ltd vs Rajni Goyal of 2018 and said that the offer of possession is only valid only when the complete OC has been obtained.

It was held in the order "In this case, the homebuyers are entitled to claim compensation delay until the date of the actual possession or the date of OC".

Thus the NCDRC held that the developer has to pay delayed compensation to the homebuyers at 6 percent annual interest till the actual possession takes place.

It was added that this judgement will ensure that developers cannot hold homebuyers responsible for incomplete possession of the apartments. "Only after OC has been issued, the project will be deemed complete and the builder's interest liability will stop, especially in delayed projects," he added.