This is my response to you:
1. If there was dispute does not mean that neither of them should intentionally delay the registration;
2. Therefore to that extent they are liable;
3. But if the delay was unintentional or the current flat was a dispute in the court then the builder cannot ask for compensation;
4. If there is any terms of conditions in the allotment letter that the builder can seek penalty then only the couple is bound by it and not otherwise;
5. Therefore engage a lawyer and let him/her read the terms and conditions and figure out if there is any penalty clause in the same.