The Supreme Court has held that a homebuyer does not lose the right to seek compensation for delayed delivery of a flat merely because possession has already been handed over. Observing that acceptance of possession does not extinguish a buyer's claim for compensation arising from the delay, the Court restored a long-pending consumer complaint that had been dismissed without being decided on merits.

A Bench of Justice Vikram Nath and Justice V. Mohan allowed the appeal of a homebuyer who had challenged a 2016 order of the National Consumer Disputes Redressal Commission (NCDRC). The appellant had become a member of a cooperative group housing society in Delhi in January 2003 and was subsequently allotted a flat.

The NCDRC had dismissed his revision petition on the ground that he was no longer a "consumer" when he filed the complaint because he had already taken possession of the flat without raising any protest. The Supreme Court found this reasoning legally unsustainable.

In its June 4 judgment, the Court observed that a claim for compensation due to delayed possession relates to the period before the flat is handed over.

"The subsequent receipt of possession cannot, by itself, extinguish the right of the allottee to seek adjudication of a claim for compensation for the alleged delay," the Bench said.

The dispute originated from a consumer complaint filed before the District Consumer Forum, where the homebuyer alleged deficiency in service owing to the delay in handing over possession. In July 2009, the District Forum referred the dispute to arbitration, a decision that was upheld by the Delhi State Consumer Disputes Redressal Commission in February 2013. The homebuyer then approached the NCDRC, which dismissed his revision petition in January 2016.

Before the Supreme Court, the appellant argued that the consumer dispute could not have been referred to arbitration solely because the agreement between the parties contained an arbitration clause.

Accepting this contention, the Bench reiterated that the Consumer Protection Act, 1986 is a beneficial legislation intended to provide consumers with a simple, speedy and inexpensive remedy against defects in goods or deficiency in services. Referring to Section 3 of the Act, the Court observed that remedies under the Consumer Protection Act are in addition to, and not in derogation of, other legal remedies.

"The existence of another forum or another mode of adjudication, therefore, does not by itself exclude the jurisdiction of the consumer fora," the Court held, adding that the presence of an arbitration clause cannot by itself bar a consumer complaint.

The Court also found fault with the approach adopted by the NCDRC. It noted that the principal issue before the Commission was whether the District Forum and the State Commission were justified in referring the dispute to arbitration. Instead of deciding that question, the NCDRC dismissed the case on an entirely different ground by holding that the appellant had ceased to be a consumer after taking possession of the flat.

According to the Bench, this failed to address the central jurisdictional issue arising from the orders of the lower consumer fora.

The Court clarified that the appellant's grievance was not simply about obtaining possession but about the delay in receiving it and the compensation allegedly due for that delay. Whether the delay actually occurred, whether it was attributable to the housing society, and whether the buyer had accepted possession unconditionally were all disputed questions that required adjudication on evidence.

The Bench noted that none of these issues had ever been examined on merits at any stage of the proceedings.

Holding that the complaint could not have been rejected at the threshold merely because possession had been delivered before it was filed, the Supreme Court set aside the orders of the District Forum, the State Commission and the NCDRC.

The consumer complaint has now been restored and remitted to the District Consumer Disputes Redressal Commission, Dwarka, for a fresh decision on merits after giving both parties an opportunity to lead evidence.

Noting that the complaint has been pending since 2005, the Court directed the District Commission to make an endeavour to dispose of the matter within one year from the date of receiving a copy of its order.