The court held that the arbitration clause in an agreement between a homebuyer and a real estate company cannot prevent the buyer from approaching a consumer forum with their grievances.
Published: June 27, 2026, 2:01 PM IST
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New Delhi: In a significant development, homebuyers can now file complaints against real estate companies for deficiency in service even after taking possession of their flats. The Supreme Court has ruled that homebuyers can approach consumer forums to seek compensation from developers for delays in handing over possession, even after they have taken possession of the property.
The Supreme Court set aside an order of the National Consumer Disputes Redressal Commission (NCDRC), which had held that a homebuyer ceases to be a consumer after taking possession of a flat and, therefore, cannot claim compensation for delays in delivery.
Homebuyers cannot be barred from approaching consumer forums
The court held that the arbitration clause in an agreement between a homebuyer and a real estate company cannot prevent the buyer from approaching a consumer forum with their grievances. In other words, the presence of an arbitration clause in the agreement does not take away a homebuyer’s right to seek redressal before consumer forums.
In a case related to a housing project in Dwarka, a bench comprising Justice Vikram Nath and Justice V. Mohan allowed a homebuyer’s plea seeking compensation for delay in handing over the flat, even though possession had been given 22 years later.
The bench held that the reasoning adopted by the National Consumer Disputes Redressal Commission could not be sustained.
What did the bench say?
The bench observed: “The appellant’s grievance was not merely about obtaining possession. The complaint was that there had been a delay in handing over possession of the flat and that the appellant was entitled to compensation for this delay. A claim for compensation due to delay in possession essentially relates to the period before possession was delivered. The subsequent delivery of possession does not automatically extinguish the allottee’s right to seek adjudication of the claim for compensation arising from the delay.”
The bench also revived the complaint filed by the homebuyer before the district consumer forum in 2005 and directed the forum to decide within one year whether there had indeed been a delay in handing over possession and whether compensation was warranted.
