The Supreme Court just answered. Your agreement is not the Constitution. If a clause is one-sided and unfair, it cannot silence statutory protection
And it’s big for homebuyers in Parsvnath Developers Ltd. v Mohit Khirbat 20 February 2026; Citations: 2026 INSC 170 | 2026 SCO.LR 2(4)[20]
In this case, a Gurugram housing project was delayed. The buyers approached the NCDRC. The Commission ordered:
- Completion and possession
- 8% interest compensation till handover Costs
- Builder to bear increased stamp duty post cut-off
The builder appealed arguing the agreement capped compensation.
The Court dismissed the appeals with a Clear principle:
- Consumer fora derive power from the Consumer Protection Act, 1986
- Their jurisdiction cannot be restricted by a one-sided contract
- Compensation must be “just and reasonable”
- A builder cannot hide behind an unfair clause
Above all, Statutory rights override contractual imbalance.
Subscribe to our updates now and be the first to know about the latest news and developments. Subscribe here: https://legal.relegal.in/subscribe-newsletter/
#legalcousel #legalawareness #legaladvice #deficiencyinservice #onesidedunreasonableclausesinbuilderbuyeragreement #unfairtradepractice #justandreasonablecompensation #contractualcaponcompensationfordelay #lawwithRaji
| Case Comment The Supreme Court held that the power to award just and reasonable compensation in a deficient housing service flows from the Consumer Protection Act, 1986 and cannot be curtailed by a one-sided clause in a builder-buyer agreement. The disputes involved delays by a builder to hand over flats to three investors in a Gurugram project. The National Consumer Disputes Redressal Commission (NCDRC) directed the developer to complete construction and deliver possession. It also awarded interest compensation at eight percent per annum until possession, extended rebate, awarded costs and imposed post-cut-off stamp duty increases on the developer. The developer appealed, relying on the builder-buyer agreement clause which provided nominal compensation for delays and obligated buyers to pay stamp duty. The Supreme Court upheld the NCDRC’s directions and dismissed the appeals. Further, it held that the award must be reasonable and proportionate to the delay and hardship caused. It granted the developer six months to secure the Occupancy Certificate and hand over possession in two matters. It clarified interest computation and issued directions for the supply of an Occupancy Certificate in the third. Keywords/phrases: Statutory jurisdiction of consumer fora—Consumer Protection Act, 1986—deficiency in service—one-sided and unreasonable clauses in builder-buyer agreement—unfair trade practice—just and reasonable compensation—contractual cap on compensation for delay—consumer fora not bound by contractual clause for compensation Read the Judgement here. |