• Delay in possession for Indefinite period

Dear Advocates,

I bought an apartment from a reputed builder few years back (2014). The possession was supposed to happen by September 2015 according to the agreement. After that a grace period of 6 months up to April 2016 is provisioned in the agreement for providing delivery without any penalty. From April 2016, the builder is required to pay penalty for the late delivery of the property @ Rs. 5 per sqft per month. 

The builder hasn't delivered the property yet also they are not doing any work now. Last 3 years, they have finished only till flooring but all services, doors etc are pending (about 10% work pending). The builder is now saying that they are running out of fund and they can't complete the work anymore. Also, the builder has no office, all employees left, absolutely no team now. The builder has got the problem with their creditor who is the authorised signatory of the escrow account and now locked the account. We are left with 10% money pending to pay the builder but anything we pay will end up going to existing escrow account and the creditor won't allow to release to start the work. The work thus was on halt for last 3 years.

One year back, the creditor engaged a third party vendor to complete the pending work. The builder, their creditor and the vendor entered in to a third party agreement. But recently the third party also left without finishing the work showing the cause that money is not being disbursed. Now the builder is totally denying to put any money as he is telling he is completely bankrupt now and the creditor is not releasing any money. The situation is now out of 400 flats of the project, 340 flats given possession already in phase 1 where 40 flats are yet to sold, for 60 sold flats in phase 2 yet to get possession and no amenities is been given. OC, Bescom nothing is in place till now. 200 families are staying in phase 1 without OC and on temporary power.

My questions is -
What are the risk of buyers of those 60 unregistered flats who paid 90% but yet to get possession?
Can 60 buyers of phase 2 pool the pending amount and finish the flats themselves for the possession? What risks will they have from the creditor in this case?
Can the creditor sell this project to someone else? Can they do this without the consent from the buyers of unregistered flats and what all problem the buyer can face in this case?

What are the other options I have right now. The project is already 3 years delay from possession date and I am paying huge EMI from 2015 till date. Not able to claim any tax benefit also as the flat is not registered yet. I have already paid a very high interest on the loan. 

Please suggest as I am a young mother and working woman. Investing a lot of time and money is not possible for me at this stage. Buying an under-construction flat was the biggest mistake of my life and now it is haunting me both financially and mentally. Any suggestion will be of a great help.

Thanks & Regards,
Asked 3 years ago in Property Law
Religion: Hindu

7 answers received in 1 day.

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9 Answers

You should file complaint against builder before RERA seek orders to direct builder to complete the pending work and deliver possession of flat within period of 6 months or so 


2) to execute registered sale deed in your favour as90 per cent payment made 


3) you should not pool in amount and finish work on your own .


4) your objective should be to obtain registered sale deed in your favour to protect your interests 

Ajay Sethi
Advocate, Mumbai
89849 Answers
6516 Consultations

5.0 on 5.0

It has been six long years and the builder cannot complete the project on his own. Before he seeks to declare himself bankrupt, you issue a legal notice to both the builder and the bank stating that due to inadvertent delay in completion of the project and postponed or indefinite handover period, you are constrained to stop payment on the EMI's with immediate effect. 

Post issuance of this legal notice, approach the consumer court seeking cancellation and complete refund of your monies from the builder, together with interest @ 24% pa and compensation for loss of being able to claim IT benefit within 3 years. Make the bank one party to the proceedings as well.

If this does not help your cause, then proceed to file a criminal case U/s 420 IPC against the builder, at the jurisdictional police station closer to your home.

Kiran N. Murthy
Advocate, Bangalore
1298 Answers
194 Consultations

5.0 on 5.0

You can go to consumer court or RERA or NCLT with your complaint and seek direction from them

Prashant Nayak
Advocate, Mumbai
28570 Answers
101 Consultations

4.4 on 5.0

Without respiration of sale deed ownership dose not transfer. File FIR, complain to RERA and Consumer court for compensation/penalty with refund and interest.

60 buyers have no authority to start construction without agreement with builder/creditor or by order of court. Creditor can go to any extant to recover loses. So, better initiate legal proceeding against builder.

Just stop bothering and file FIR of cheating and criminal breach of trust. Fast recovery on your terms.

Also register complain with RERA and consumer complaint for interest and compensation. Buyers cannot be expected to wait indefinitely for possession of flats after making payments.


Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

You can make complaint in the consumer forum of your city and in RERA office for either money to give back or alternative  ready flat of same cost.

Ganesh Kadam
Advocate, Pune
12638 Answers
205 Consultations

4.9 on 5.0

- As per law, if the buyer cancel the agreement for purchasing the said flat due to delay in possession , then builder is bound to refund the entire amount with 10% interest due to delay in possession of the flat.   

- Further , the buyer can also claim compensation for mental agony and harassment due to delay in possession of the flat by the builder after fling a complaint before the Consumer Court or RERA.

- If without a proper transfer documents in your favour , you will complete the project after investing the personal fund , then you may face more problems in future . 

- Yes, the creditors can sell the same to some others as well , without the consent of buyers , in the absence of any registered agreement.

- You can claim the extra amount paid by you from the builder due to delay in possession, or can get 10% interest on your paid amount .  

- Firstly you should send a demand notice after mentioning that due to delay in possession , the builder should pay the amount of paid emi , otherwise, you are cancelling the agreement, and thereby ask him to refund the entire amount paid by you with interest. 

- If the builder fails to response your notice, and not refund the amount within a period of 7 days of time , then you should file a complaint with the Consumer Court under the Consumer Protection Act, against the builder for deficiency in service, and you can also approach the RERA as well. 

Mohammed Shahzad
Advocate, Delhi
10662 Answers
132 Consultations

5.0 on 5.0

You can file a complaint before the Real Estate Regulatory Authority (RERA) under Section 31 of the Real Estate (Regulation & Development) , Act, 2016.

Mohammed Mujeeb
Advocate, Hyderabad
19036 Answers
32 Consultations

4.5 on 5.0

1. You should file a complaint before RERA against builder and developers for stopping the construction work. And seek direction for completing the work and giving possession.

2. You should also ask builder for registration of flat in your favour. 

3. Completion of work yourself is not a solution for the problem.

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

5.0 on 5.0

The commission directed the builder to pay compensation at the rate of 6% per year on the total deposit for the delayed period even after handing over possession. In case of non-delivery of flat within the deadline prescribed by commission, NCDRC said the builder will have to refund the entire amount with 10% interest.

Delay in delivery of possession is when the builder does not transfer the property to the buyer within the stipulated time period (even after the extension period). ... The entitlement of the complainant/buyer will commence upon conclusion of the grace period till the date of handing over of possession.

A buyer can file a case and send legal notice to the builder for delay in possession under the RERA Act, 2016 or transfer their case from a CDRC to the State Real Estate Regulatory Authority. According to this Act, a builder will have to pay 10% interest on the value of the property for delayed possession of flats.

Judicial forums have repeatedly held that the home buyers cant be made indefinitely and  they are entitled to claim refund for delay in possession

Now, the National Consumer Disputes Redressal Commission has ..held that buyers can seek refund if possession is delayed by one year by one year beyond the date promised by the builder. “It is  now established that the allottees have the right to ask refund if possession is inordinately delayed, particularly beyond one year.

According to the rules, a delay does not automatically void or cancel an agreement between a buyer and a builder. By law, a builder is permitted two extensions of 120 days each, without having to pay delayed closing compensation, provided that the homeowner was given proper written notice..
The RERA has empowered the buyers; however, the recent awareness to reach out to various forums such as NCLT and NCDRC has caused panic amongst errant builders and turmoiled real estate sector. But once the dust settles, owning houses and flats will become easy for the buyers.


T Kalaiselvan
Advocate, Vellore
80016 Answers
1674 Consultations

5.0 on 5.0

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