News: Accepting Keys Doesn’t Waive Delay Interest: Allahabad HC-27-09-2026
A homebuyer who accepts possession of a delayed flat does not, by that act alone, lose the right to claim interest for the period of delay, the Lucknow bench of the Allahabad High Court has ruled.
The court dismissed an appeal by Antriksh Developers and Promoters Pvt Ltd concerning its Antriksh Golf View project in Sector 78, Noida, and upheld the direction that the developer pay interest to the buyer, Shyam Sunder Agrawal.
Agrawal booked the flat in 2010, with possession contractually due by November 2012. The developer offered possession only in May 2017, and the court noted the offer came without an occupancy certificate and certain other documents needed for a valid handover. The RERA Appellate Tribunal had earlier ordered interest on the amount he deposited for December 2012 to May 2017, at one percentage point above the Marginal Cost of Funds-based Lending Rate (MCLR).
In Noida and Greater Noida, several buyers have taken possession under fit-out agreements without an occupancy certificate. Such letters typically say the builder has applied for the certificate and that buyers may take possession for interior work.
The developer argued that the delay was partly caused by a National Green Tribunal (NGT) order restricting construction and the issue of occupancy certificates within a 10-km radius of the Okhla Bird Sanctuary. The High Court declined to accept this as justification for the whole delay. It pointed out that the possession deadline was November 2012, while the NGT restriction took effect only in August 2013. The developer had also submitted that construction was completed in 2014 and an occupancy certificate applied for that year. The court observed it could not claim both that the project was complete in 2014 and that the NGT restraint prevented completion.
The bench held that the "zero period" recognised by the Supreme Court could apply only to the time the project was actually affected by the restraint and could not erase delay that had already accrued.
Ketan Mukhija, Partner and Co-Head of PE/VC at Kochhar & Co, said the judgment makes clear that acceptance of possession cannot be treated as a waiver of interest that accrued during the delay. He noted that RERA prescribes no specific limitation period for interest claims under Section 18(1), but said this does not make such claims automatically maintainable regardless of elapsed time or circumstances; maintainability must still be judged on the facts of each case. The ruling also underlines the importance of chronology when a developer cites a regulatory restriction, he said, since here the default arose months before the restraint.
Venkat Rao of Intygrat Law Offices LLP said the right to seek compensation for delayed possession is now a statutory right under RERA and, in certain circumstances, may survive even after execution of the conveyance deed.
