The National Consumer Disputes Redressal Commission (NCDRC) has ruled that issuing possession letters for apartments without obtaining the mandatory occupancy certificate (OC) cannot be considered a legally valid offer. The commission emphasised that homebuyers have the right to claim refunds with in delayed housing projects, as reported by a leading national media publication.

According to a report by Hindustan Times, this ruling came following a complaint against Jaipur-based developer Mantra Lifestyle Homes Pvt Ltd, concerning its Unique Apex Towers project. The residential development, which has been delayed by nearly four years, prompted at least seven homebuyers to approach the NCDRC seeking relief.

The commission directed the developer to refund the amounts deposited by the seven complainants, along with interest at 9% per annum, calculated from the date of each deposit until the refund is realised. The refunds must be processed within eight weeks, failing which the interest rate will be increased to 12% per annum, as cited in the reports.

The offer of possession made by the developer was extended without securing the mandatory OC, which is essential to certify that the building is safe and fit for occupation. As per the NCDRC, possession offered without an OC is legally invalid. Consequently, homebuyers have the right to reject possession and claim a refund, along with applicable interest or compensation, as noted by the legal representatives of the complainants.

Case background

The Unique Apex Towers project, located in Jodhpur, Rajasthan, was launched around 2012–13, with units sold before 2014 under formal sale agreements. The developer had initially committed to hand over possession by November 2021, but the project has suffered extended delays, according to the report.

Homebuyers had fulfilled their payment obligations years in advance, yet the promised possession date elapsed without delivery. Despite repeated assurances from the developer, the required OC was not obtained, leaving buyers in prolonged uncertainty.

The NCDRC observed that since the homebuyers did not obtain the occupancy certificate from the developer at the time of filing the complaint, the homebuyers were entitled to compensation for the delay at 9% per annum.

Developer’s response

The developer contended that permissive possession of one unit, flat B-601, had been offered to some buyers, but they did not take possession as they failed to clear the outstanding amount. Accordingly, the developer argued that the ₹36.44 lakh paid for this flat should not be considered in the overall valuation, claiming that the complaint lacked pecuniary jurisdiction.

Additionally, the developer noted that other buyers had not adhered to the agreed payment schedule, which impacted the project’s cash flow and construction timeline. The delays were further attributed to force majeure events, including COVID-19-related disruptions and the Supreme Court- and Rajasthan High Court-mandated ban on Bajri (river sand), a key material used in concrete, road laying, and foundations to ensure structural strength and stability.