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M/S Lanco Hills Technology Park Pvt Ltd v. Manisha Balkrishna Kulkarni & Anr

Civil Appeal · 2019 INSC 1386Decided 17 Dec 2019
Civil Appeal No. 155 of 2015
Dr. Justice D.Y. Chandrachud · Justice Hrishikesh Roy

Background

The respondents had agreed in 2011 to buy an apartment in Hyderabad from the developer (the appellant) for about Rs 1.55 crore, with possession promised by 28 March 2011 (plus a three-month grace period). Possession was delayed, partly because a Waqf Tribunal restraining order froze the project between March 2011 and May 2012, and although a sale deed was executed in February 2013 reciting that possession had been handed over, the actual keys were only handed over on 28 August 2014. The buyers filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) for possession, interest, and damages for the delay, and the NCDRC ordered the developer to pay Rs 5/sq ft for the first six months of delay and 18% annual interest for the period beyond that.

Decision Breakdown

The Supreme Court held that the force majeure clause genuinely extended the possession deadline during the Waqf Tribunal injunction period, so the contractual compensation of Rs 5/sq ft rightly applied for six months after the injunction was vacated. However, since the contemporaneous record (the "Keys Hand Over Form") showed actual possession was only given on 28 August 2014, despite the sale deed's recital to the contrary, the developer remained liable for the further delay beyond the contractual six-month window. The Court found the NCDRC's 18% annual interest rate for this later period excessive, and substituted it with a lump-sum compensation of Rs 10 lakhs for the period from 9 February 2013 to 28 August 2014, partly allowing the appeal.

Lesson Learnt

A recital in a sale deed that "possession has been handed over" is not conclusive if the actual physical facts (such as a signed keys-handover document) show otherwise: courts will look behind paper recitals to real-world delivery of possession when awarding delay compensation to homebuyers.

Official source (sci.gov.in)View Judgment (PDF)

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