SC Reinforced that consumer protection overrides restrictive builder-buyer one-sided, unreasonable clauses in standard form of the contract.
The period of 36 months with grace period of six months was given in the flat buyer agreements for giving possession. Despite payment of entire sale, the possession was not given within the stipulated period.
Clause 10(a) of the Flat Buyer Agreement provided that no claim for damages or compensation shall lie against the developer for any delay in giving possession for the reasons enumerated therein. Clause 10(c) provided for fixed rate of Rs.10 per sq.ft per month as compensation for the delay.
However, clause 5(b) provided for 24% per annum for delay in payments by the allottee and to forfeit substantial amount.
NCDRC allowed the consumer complaints and held that the developer could not be given an indefinite period to obtain the OC. It was required to obtain OC in time bound manner on its own costs and responsibility.
The Developer contended before the Supreme Court that the Consumer Commission cannot travel beyond the contractual stipulations.
The Supreme Court HELD that the contract clauses are one-sided and unreasonable constitute unfair trade practices. Such oppressive terms in standard form contract cannot bind the home buyer – consumer.
judgment dated 20.2.2026 of the Supreme Court of India in Civil Appeal No.5289 of 2022 of Parsvnath Developers Ltd Vs. Mohit Khirbat with connected matters
