A housing loan of ₹68,88,000 was arranged by the builder, which undertook to pay the Equated Monthly Installments (EMIs) until possession.
Since the builder defaulted on payments to the bank, the complainants were required to pay the EMIs. Even though they paid a total of ₹68,46,999, construction remained incomplete, and even the basic structure of the tower was not ready. Yet, on March 11, 2024, the builder issued a letter offering possession for fit-out, along with a demand of ₹2,23,278.42 as interest for delayed payment.
The complainants demanded that the builder complete construction and obtain the occupancy certificate before giving possession, but the builder did not pay heed. They therefore filed a complaint before the State Consumer Disputes Redressal Commission (State Commission) at Chandigarh against the builder, its chief executive officer (CEO), and its directors, Bhupendra Singh and Shalini Barathi.
The builder contested the case, contending that the complainants were not consumers but merely investors. It claimed that it obtained the occupancy certificate on October 11, 2024, but the complainants failed to make the balance payment despite reminders, and therefore, the demand for interest was justified. The builder also stated that no complaint could be filed because the parties executed a settlement deed on June 14, 2024, settling all disputes between them.
The State Commission observed that the complainants were consumers, as their affidavits showed that they required the flat because they regularly visited Chandigarh for work. As regards the settlement deed executed on June 14, 2024, the Commission held that it would be binding only in respect of disputes existing on that date, and would not have any bearing on subsequent disputes.
The Commission noted that obtaining both the completion certificate and the occupancy certificate is a statutory requirement. Merely obtaining one of the certificates would not suffice to make the offer of possession valid and legal. It noted that the completion certificate had not been obtained and, therefore, the builder could not legally give possession, according to various Supreme Court decisions. It held that the allottee would not be obliged to take possession, unless it was complete in every respect.
The Commission also noted that the letter issued by the builder was only for “fit-out possession”, and not for occupation. It, therefore, concluded that the demand for the balance payment was premature and unjustified. Consequently, the demand for interest for the delay in payment was illegal.
The Commission concluded that the builder would be liable for the delay in delivery. Accordingly, by its order dated December 22, 2025, delivered by the Bench of Justice Raj Shekhar Attri and Preetinder Singh, the Chandigarh State Commission ordered the builder to refund the EMIs which the complainants had to pay due to the builder’s default. It awarded compensation in the form of 9 per cent interest from September 5, 2011, till the date when legal possession was offered on December 24, 2015.
The writer is a consumer activist
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