Court rules builder liable for delay interest from contractual possession date; benefit of NGT-imposed "Zero Period" applies only partially, and tribunal's order remains valid despite bench constitution issues.
In a significant judgment dated September 23, 2026, the Allahabad High Court (Lucknow Bench) dismissed the appeal filed by Antriksh Developers and Promoters Pvt. Ltd. against a Real Estate Appellate Tribunal order favoring homebuyer Shyam Sundar Agarwal. The dispute arose from the delayed possession of an apartment in the "Antriksh Golf View" project in Noida, which was initially promised for November-December 2012 but was delivered years later.
The Court reinforced the rights of allottees under Section 18(1) of the Real Estate (Regulation and Development) Act, 2016 (RERA), emphasizing that a homebuyer who chooses not to withdraw from a delayed project is entitled to monthly delay interest until possession is handed over. Importantly, the Court held that there is no statutory limitation period restricting such claims, and the "demand" for interest cannot be construed so as to nullify the allottee's substantive right.
The appellant-builder had contended that the delay was due to a stay order by the National Green Tribunal (NGT) related to projects near the Okhla Bird Sanctuary, which barred construction and issuance of Occupancy Certificates (OC). However, the Court found these contentions contradictory, noting that the builder admitted completing the project in 2014 and applying for OC during the NGT stay. The Court ruled that the builder cannot simultaneously claim project completion and blame the NGT stay for delay, invoking the legal principle that a party cannot "blow hot and cold" in the same breath.
The Supreme Court's precedent in Griha Pravesh Build Teck Pvt. Ltd. v. Suresh Chander Sharma (2024), which recognized a "Zero Period" from August 14, 2013, to August 19, 2015, during which no interest would be payable due to the NGT stay, was applied. However, since the contractual possession date was November 2012, the builder had already defaulted before the "Zero Period" began. Hence, the builder remained liable for the delay interest accrued prior to the NGT order.
Additionally, the Court rejected the builder's challenge on procedural grounds, where it claimed that the Appellate Tribunal was not properly constituted (coram non judice). The Court observed that no such objection was raised before the Tribunal, and the Tribunal had adequately recorded reasons for its constitution. Section 55 of RERA was cited, which protects the validity of proceedings despite vacancies or procedural irregularities that do not affect merits.
The Appellate Tribunal's order directing the builder to pay delay interest at MCLR + 1% from December 2012 to May 22, 2017 (possession date), and setting aside the fresh demand letter issued by the builder, was upheld. The Court also noted that the builder's offer of possession without proper Occupancy Certificates was merely to comply with contractual clauses and avoid delay penalties, not to absolve liability.
This judgment underscores the protection afforded to homebuyers against undue delays in possession and clarifies the limits of relief available to developers affected by regulatory interventions like NGT orders. It also affirms the procedural soundness of the Appellate Tribunal's functioning despite membership vacancies, ensuring expeditious resolution of real estate disputes.
Bottom Line:
Real Estate (Regulation and Development) Act, 2016 - Allottee who does not withdraw from project is entitled to interest for every month of delay till handing over of possession under Section 18(1) - Such claim is maintainable even after taking possession and there is no prescribed limitation in Section 18(1) for claiming delay interest - Builder cannot avoid liability by taking inconsistent pleas regarding NGT stay and completion of project - Benefit of "Zero Period" recognized in Supreme Court decision applies only from 14.08.2013 to 19.08.2015 and cannot wipe out delay already accrued prior thereto - Appellate Tribunal's order not invalid merely due to vacancy/defect in constitution in view of Section 55 of RERA Act.
Statutory provision(s):
Real Estate (Regulation and Development) Act, 2016 Sections 18(1), 43(3), 44(5), 55
