Chandigarh commission replaces Rs 5 per sq ft delay clause with 9% interest for ATS buyers
The Chandigarh State Consumer Commission held a Rs 5 per sq ft monthly delay clause one-sided and ordered ATS Estates to pay 9% yearly interest for a delay of over seven and a half years.
Key points
- The Chandigarh State Consumer Disputes Redressal Commission held a Rs 5 per sq ft monthly delay clause in an ATS Estates agreement one-sided.
- It ordered 9% yearly interest on Rs 57,75,950 paid by the buyers, from 15 March 2018 to 29 August 2026, payable within 30 days.
- Flat buyers facing long delays can seek interest on their deposits instead of a nominal compensation rate written into the agreement.
The State Consumer Disputes Redressal Commission, U.T. Chandigarh, on 10 November 2026 ordered ATS Estates Pvt. Ltd. to pay two flat buyers 9% yearly interest on the Rs 57,75,950 they had paid, for a delay of more than seven and a half years in handing over their apartment. It set aside the Rs 5 per sq ft a month compensation the builder's agreement allowed.
What Happened
The buyers booked a 2,950 sq ft apartment in the ATS Golf Meadows Lifestyle project at Derabassi, Mohali, in 2015, for Rs 65,20,000. The agreement promised possession by 15 March 2018. Possession was offered on 9 December 2024 with only a partial completion certificate, and handed over on 29 August 2026, according to the order.
The District Consumer Commission-II had awarded delay compensation at the agreement's rate of Rs 5 per sq ft a month and Rs 50,000 in costs. On the buyers' appeal, the State Commission held that clause "manifestly one-sided", noting that the same agreement let the builder charge buyers 18% interest for late payment. It held that possession could not be validly offered without an occupation certificate.
The builder must pay 9% interest from 15 March 2018 to 29 August 2026 within 30 days of receiving the order, or 12% penal interest after that. It must also pay Rs 75,000 as compensation and Rs 35,000 as litigation costs, and may adjust any balance price the buyers owe without interest or holding charges. The complaint against HDFC, the home-loan lender, was dismissed. The order is the commission's finding and may be appealed.
What It Means
Many builder agreements cap delay compensation at a small fixed rate. This order adds to rulings that consumer commissions can replace such a clause with interest on the buyer's deposit when the delay is long and unjustified. Homebuyers with a similar grievance can seek help from the National Consumer Helpline (1915) or file online through e-Daakhil.
Source: Consumer commission order
Sources & Citations
- Consumer commission order — Consumer commission