The Allahabad High Court has held that a homebuyer does not lose the statutory right to claim interest for delayed possession merely by accepting the flat at a later stage. The court also observed that the Real Estate (Regulation and Development) Act (RERA) does not prescribe a specific limitation period for seeking interest arising from delayed possession.
The ruling was delivered by Justice Prashant Kumar while dismissing an appeal filed by Antriksh Developers and Promoters Pvt Ltd in a dispute concerning the developer’s Antriksh Golf View project in Sector 78, Noida.
Homebuyer Booked Flat in 2010
The case involved homebuyer Shyam Sunder Agrawal, who had booked a flat in the project in 2010. Under the agreement, possession was due by November 2012. However, the developer offered possession only in May 2017.
According to the court, the possession was offered without the occupancy certificate and other required documents. The RERA Appellate Tribunal subsequently directed the developer to pay interest on the amount deposited by Agrawal for the period from December 2012 to May 2017.
The interest was ordered at a rate of one percentage point above the Marginal Cost of Fund Based Lending Rate (MCLR).
The developer challenged the tribunal’s order before the High Court, arguing that the delay was attributable to circumstances beyond its control.
Developer Cited NGT Restrictions
Antriksh Developers argued that construction and the grant of occupancy certificates had been affected by an order of the National Green Tribunal (NGT). The restriction related to construction activities within a 10-km radius of the Okhla Bird Sanctuary.
The developer sought to rely on the restriction to explain the delay in handing over the flat and contended that the period affected by the NGT order should not be considered while calculating the delay.
The High Court, however, rejected this argument after examining the developer’s own submissions concerning the completion of the project.
Court Examines Project Completion Timeline
The court noted that the developer’s own case was that the project had been completed in 2014 and that an application for the occupancy certificate had also been submitted in the same year.
The court observed that the developer could not simultaneously contend that the project had been completed and that its completion had been prevented by the NGT restriction.
The High Court also examined the timing of the NGT restriction in relation to the contractual possession deadline. The restriction came into effect in August 2013, while the contractual deadline for handing over possession was November 2012.
According to the court, the developer’s default had therefore already occurred before the NGT restriction came into force.
‘Zero Period’ Does Not Remove Earlier Delay
The court also considered the concept of the “zero period” recognised by the Supreme Court in relation to the NGT restrictions.
It observed that the benefit of the zero period could apply only to the period during which the project was actually affected by the relevant restraint. It could not eliminate a delay that had already occurred before the restriction came into effect.
On this basis, the court upheld the direction requiring Antriksh Developers to pay interest for the delayed possession period.
The developer’s appeal was accordingly dismissed.
Implications for Delayed Possession Claims
The ruling reinforces the distinction between accepting possession of a property and surrendering a statutory claim for compensation or interest arising from an earlier delay.
In this case, the homebuyer accepted possession even though it was offered several years after the contractual deadline. The High Court held that such acceptance did not by itself prevent the buyer from pursuing the interest claim for the period of delay.
The court’s observation regarding limitation under RERA also addresses an important issue for homebuyers seeking interest on delayed possession. The judgment states that RERA does not prescribe a specific limitation period for claiming interest on account of delayed possession.
The case also highlights the importance of establishing the actual period during which an external regulatory restriction affected a real estate project. A developer seeking relief for such a period must establish its relevance to the delay and cannot use a subsequent restriction to account for a default that had already arisen before the restriction came into force.
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