The case, Vinit Bahri and Another vs. M/s MGF Developers Ltd. and Another (Civil Appeal No. 6588 of 2023, Neutral Citation: 2026 INSC 114), was decided by a bench comprising Justices Prashant Kumar Mishra and N.V. Anjaria.

The dispute dates back to March 2005, when Vinit Bahri and his co-appellant booked a residential flat (Unit No. VP-C/802) in the builder’s group housing project called “The Villas” at Village Sahraul, Sector-25, Gurgaon. They paid an initial booking amount of Rs. 15 lakh.

On September 2, 2005, the flat was allotted to them – a ground-floor unit in Tower-C with a super built-up area of 3,590 square feet.

In June 2006, the parties signed a Flat Buyer’s Agreement. Clause 9.1 promised possession within 36 months from the agreement date, plus a 90-day grace period for obtaining the occupation certificate – meaning possession was due by around September 11, 2009.

The buyers alleged that M/s MGF Developers Ltd. (the main builder, respondent No. 1) failed to deliver on time. They claimed the builder unilaterally changed the layout plan of Tower-C without informing buyers (admitted in a builder meeting on April 23, 2009). Despite this, the builder raised multiple demands for extra payments, including Rs. 10.82 lakh on September 6, 2009, and later charges for EEDC, IDC, service tax, and fixtures (totaling over Rs. 30 lakh plus Rs. 4.8 lakh for deficient fixtures).

The buyers paid these under protest and took possession on January 8, 2015. The occupation certificate was issued by the Haryana authorities on August 14, 2015.

In January 2017, Vinit Bahri and his co-appellant filed a consumer complaint (No. 74/2017) before the National Consumer Disputes Redressal Commission (NCDRC) in New Delhi. They sought:

• 18% interest on the amount paid (Rs. 1.59 crore approximately),
• Rs. 50 lakh for mental agony and harassment,
• Rs. 15 lakh for issues due to the Tower-C layout change,
• Rs. 35.61 lakh as refund of excess charges for fixtures/fittings,
• Rs. 2.5 lakh in litigation costs, and other reliefs.

The builder defended the case, arguing that the buyers had already received/adjusted delay compensation of Rs. 12.10 lakh as per the agreement’s Clause 9.7. They also claimed the flat’s area had increased by about 271 square feet, justifying extra payments. Crucially, MGF Developers pointed out that the buyers had leased the flat to a third party (Sunil Raman) starting March 2015, with a formal lease deed executed on March 3, 2016. This, they argued, showed “commercial purpose,” disqualifying the buyers from consumer forum protection.

Respondent No. 2 (another party involved earlier in the project) claimed it had transferred all liabilities to MGF Developers via deeds in 2013 and 2016.

On May 11, 2023, the NCDRC dismissed the complaint purely on the ground that leasing made it a commercial activity, so the buyers were not “consumers.”

Vinit Bahri appealed to the Supreme Court. The apex court overturned the NCDRC order, ruling that the burden to prove “commercial purpose” lies on the builder (not the buyer), and it must be shown on a “preponderance of probabilities.” Mere leasing of a residential flat does not automatically prove the dominant intention at purchase was profit-making or commercial – there must be a close nexus between the purchase and profit generation.

The court emphasized that buying property (even multiple units) cannot ipso facto exclude consumer status unless dominant commercial intent is proven. Relying on earlier judgments like Lilavati Kirtilal Mehta Medical Trust (2020) and others, the bench held the NCDRC erred in dismissing the case without examining merits.

The Supreme Court set aside the May 2023 NCDRC order and restored the complaint for fresh decision on merits – including delay, extra demands, layout changes, and compensation.

This ruling strengthens protections for homebuyers facing builder delays or unfair practices, ensuring renting out a flat (common for investment or family reasons) does not bar access to consumer forums.

Also Read: This Supreme Court Judgement is Very important for Homebuyers & Builders as well

The post Supreme Court: Renting Out Your Flat Won’t Stop You from Suing Builder for Delays – Big Win for Homebuyers appeared first on Square Feat India.

The judgement was delivered on 23 June 2025 in Appeal No. AT005000000235139 of 2024 (Lalit Rade vs. Atul Ratnakar Mahashabde), overturning an earlier dismissal by the Maharashtra Real Estate Regulatory Authority (MahaRERA).

Case Background and Facts

• Homebuyer Lalit Rade booked a flat (No. 925, carpet area ≈513.46 sq.ft.) in the project “Tropica Phase-II” (MahaRERA Registration No. P2100008711, Pune), developed by Omkar Developers (with Atul Ratnakar Mahashabde as partner).
• The registered Agreement for Sale was executed on 9 March 2017, promising possession within 30 months + 6 months grace period (due date: effectively 6/9 September 2019).
• The buyer paid the full consideration of ₹36,94,150/- plus ₹2,83,428/- GST.
• The developer failed to deliver possession by the agreed date and had not obtained the OC even years later.
• In 2022, the buyer filed a complaint before MahaRERA seeking possession with OC, amenities, and interest for delay under Section 18 of RERA.

MahaRERA’s Impugned Order (19 April 2024) MahaRERA dismissed the complaint, reasoning:

• “Soft possession” was allegedly given on 23 September 2023 via conciliation.
• Interest claim was an “afterthought” since possession was taken.
• No cause of action survived under Section 18 for possession.
• Amenity/defect issues were premature without OC.

MahaREAT’s Landmark Ruling The Tribunal (Coram: Justice S.S. Shinde, Chairperson, and Member Shrikant M. Deshpande) heard the appeal ex-parte (developer did not appear) and allowed it fully. Key holdings:

1. No successful conciliation existed — Records showed conciliation failed in 2019, and the matter was referred back for adjudication. The Authority wrongly assumed settlement and soft possession.
2. Soft/fit-out possession without OC is not lawful — Possession under RERA means handing over a completed, habitable flat with valid OC from the competent authority. Anything less (e.g., access for fit-outs while construction/approvals pending) does not discharge the developer’s obligation.
3. Right to interest under Section 18 is absolute and indefeasible — Citing Supreme Court judgements in Imperia Structures Ltd. vs. Anil Patni (2020) and Newtech Promoters vs. State of UP (2021), the Tribunal held that once delay occurs beyond the agreed date (and buyer is not at fault), interest is payable unconditionally till lawful possession with OC. Full payment by buyer and no fault on their part strengthen the claim.
4. Developer’s liability continues — The promoter remains bound to obtain OC and hand over lawful possession.

Directions Issued

• Set aside the MahaRERA order of 19 April 2024.
• Developer to pay interest on ₹36,94,150/- at SBI’s highest MCLR + 2%:
  • From 7 September 2019 till 23 June 2025 — payable within 30 days.
  • If delayed, further interest on outstanding amount (as on 23 July 2025) till realization.
  • Continuing interest at same rate from date of order till OC is obtained.
• Developer to obtain OC and hand over lawful possession with OC.
• Parties bear own costs.

Why This Matters for Homebuyers This ruling reinforces that developers cannot use “soft possession” as a tactic to escape interest liability for years-long delays. Homebuyers should:

• Insist on possession only with valid OC and all amenities.
• Not accept soft possession if it risks waiving delay compensation claims.
• Approach RERA/MahaREAT promptly for interest even after partial access.

Such judgements strengthen buyer protections under RERA and deter incomplete handovers.

Also Read: What Is Carpet Area?

The post Soft possession without OC is not lawful possession: MahaREAT rules in favour of homebuyer appeared first on Square Feat India.