Wednesday, 1 July 2026

Rajat Kumar & Ors vs S D Adarash Jain Kanya Maha Vidyalaya Sadhaura & Ors - There being no prayer made by the original plaintiff in the suit for grant of any compensation nor any consent having been offered by the legal heirs of the plaintiff in that regard, the High Court could not have imposed such a direction on them, especially when there was a decree operating in their favour.

 SCI (2026.05.04) in Rajat Kumar & Ors vs S D Adarash Jain Kanya Maha Vidyalaya Sadhaura & Ors. [2026 INSC 648, Civil Appeal Nos.19552-19553 OF 2017 ] held that;

  • Indeed, the course adopted by the High Court does not find support under Order XXI of the Code of Civil Procedure, 1908.

  • There being no prayer made by the original plaintiff in the suit for grant of any compensation nor any consent having been offered by the legal heirs of the plaintiff in that regard, the High Court could not have imposed such a direction on them, especially when there was a decree operating in their favour.

  • The legal heirs of the plaintiff have been required to accept monetary relief for which a prayer was never made. Such course has resulted in miscarriage of justice.


Excerpts of the Order;

# 1. The appellants are the legal heirs of the original plaintiff- Om Parkash. The original plaintiff filed Civil Suit No.426 of 1996 against the respondents-original defendants seeking mandatory injunction for removal of alleged illegal encroachment in the form of a wall constructed by them on the common open space beyond the plaintiff’s house. He further sought permanent injunction seeking to restrain the defendants from raising any further construction thereon. 


Trial Court on 06.02.2006 decreed the suit and directed the defendants to remove the encroachment committed by raising the said walls. It also restrained them from raising any further construction over the said walls.


Regular Civil Appeal No.137 of 2006 preferred by the defendants was dismissed on 05.09.2007 and the decree passed by the Trial Court was upheld.


The defendants being aggrieved preferred Regular Second Appeal No.364 of 2008 before the Punjab and Haryana High Court1. By the judgment dated 25.11.2011, the High Court disposed the Second Appeal with a direction to the defendants to pay an amount of ₹10,000/- with interest @ 12% per annum being half the amount of expenditure incurred on construction of the walls in question. It further held that on making such payment, the wall would be treated as ‘common’ between the parties. The legal heirs of the plaintiff challenged the reversal of the decree before this Court, reference to which would be made a bit later. 


# 2. The original plaintiff also filed another Civil Suit being CS No.148 of 2000 against the same defendants, this time with a prayer for mandatory injunction for removal of lintel of the school building that had been erected by the defendants on the wall of the plaintiff’s house. The Trial Court by its judgment dated 08.11.2004 decreed the said suit and directed the defendants to remove the lintel of the school building from the said wall. The defendants were also restrained from putting any lintel on any wall of the plaintiff’s house.


Being aggrieved, the plaintiff preferred Regular Civil Appeal No.143 of 2004 which came to be dismissed by the first Appellate Court on 05.09.2007. Being aggrieved, the defendants preferred Regular Second Appeal No.363 of 2008 before the High Court. The Second Appeal was decided on 25.11.2011 and a similar decree directing the defendants to pay an amount of ₹7,000/- being half of the amount spent on construction of the wall with interest @ 12% per annum was passed. It was further directed that on making such payment, the wall would be treated as ‘common’ between the parties.


# 3. The legal heirs of the original plaintiff being aggrieved by the reversal of the aforesaid decrees by the High Court filed appeals before this Court. By order dated 13.09.2013 passed in Civil Appeal Nos.8203 of 2013 and 8281 of 2013, it was held that the modification of the decrees by the High Court without entering into the merits of the controversy was impermissible. No substantial questions of law had been framed while deciding the Second Appeals. On these counts, the judgments delivered in the Second Appeals by the High Court were set aside and the proceedings were remanded for fresh consideration in accordance with law.


# 4. On remand, the High Court was of the view that the construction of the wall had been raised long back. There was no valuation report on record and the claim alleged to be put forth by the plaintiff had not been proved. By observing that the other party could be compensated in terms of money that could be assessed by a valuer and with a view to do justice between the parties, it directed the Executing Court to assess the value of the construction. The defendants were accordingly directed to deposit such amount in the Executing Court to be paid to the legal heirs of the plaintiff. With these directions, the decree passed by the Trial Court as affirmed by the first Appellate Court came to be set aside.


The legal heirs of the original plaintiff are aggrieved by the reversal of the said decrees and have, thus, preferred the present appeals.


# 5. Despite service, there has been no appearance on behalf of the respondents since 23.04.2019. After hearing Ms. Sangeeta Kumar, learned counsel for the appellants and on perusal of the record, we are of the view that the High Court committed an error in reversing the decrees passed by the Trial Court and affirmed by the first Appellate Court on irrelevant considerations. We say so for the following reasons:


a) The initial suit filed by the original plaintiff was essentially for a decree for mandatory injunction seeking removal of the alleged encroachment undertaken at the behest of the defendants on the common open space beyond the construction of the plaintiff. According to the original plaintiff, such construction interfered with the right of the plaintiff to enjoy air and light through the ventilators as well as obstructed the passing of water through the common path.


It found that the defendants could not prove any right, title or interest on the land on which they had erected the wall. The decree was, thus, passed to remove the wall illegally erected by them. In the other suit, the Trial Court found that the defendants had put up a lintel of the school building on the wall of the plaintiff’s house illegally. A decree directing removal of the same and restraining the defendants from doing so in the future was passed. Both these decrees were upheld by the first Appellate Court. There was no prayer whatsoever made by the original plaintiff seeking any damages or compensation from the defendants for the encroachment committed by them. In absence of any such relief sought by the original plaintiff, the decree passed in his favour could not have been set aside by the High Court by compelling his legal heirs to accept compensation that was directed to be assessed by a valuer. The legal heirs of the plaintiff did not consent for such course to be followed. The High Court, therefore, could not have undertaken such exercise of seeking to compensate one party at the cost of the other without any prayer being made in that regard.


b) The High Court by the impugned judgment reversed the decree for mandatory injunction for removal of encroachment passed by the Trial Court which was upheld by the first Appellate Court. It, however, directed the Executing Court to assess the value of the offending wall put up by the defendants so as to compensate the plaintiff in terms of money. Once the decrees passed by the Trial Court in favour of the plaintiff were set aside, there would be no occasion for the Executing Court to proceed with the execution proceedings since there would be no decree holding the field for being executed. In such a situation, directing the Executing Court to assess the value of the wall in question would be requiring it to undertake an exercise not supported by any decree whatsoever. Indeed, the course adopted by the High Court does not find support under Order XXI of the Code of Civil Procedure, 1908.


c) The High Court ought to have been mindful of the fact that a similar exercise undertaken by it earlier while deciding the respective Second Appeals and directing the payment of For short, ‘the Code’ compensation to the original plaintiff was set aside by this Court. The High Court, on remand however again committed the same error, this time by directing the Executing Court to undertake valuation of the wall in question so as to compensate the legal heirs of the plaintiff in monetary terms. There being no prayer made by the original plaintiff in the suit for grant of any compensation nor any consent having been offered by the legal heirs of the plaintiff in that regard, the High Court could not have imposed such a direction on them, especially when there was a decree operating in their favour.


d) The impugned order of the High Court proceeds on a factually wrong premise that the Trial Court in Civil Suit No.426 of 1996 had recorded a finding that the wall in question was a common wall. No such finding was recorded by the Trial Court. In fact, a decree for removal of the offending wall came to be passed by the Trial Court. Further, though the High Court has referred to three questions in the impugned judgment and has stated that the defendants urged the Court to frame the said questions as ‘substantial questions of law’, the impugned order does not indicate that the said questions were treated as substantial questions of law. However, the order concludes by observing that the substantial questions were answered in favour of the defendants and the decree passed in favour of the original plaintiff was set aside. It is, thus, clear that without an available question of law for consideration and also by making out a new prayer, the decrees passed in favour of the original plaintiff have been set aside. The legal heirs of the plaintiff have been required to accept monetary relief for which a prayer was never made. Such course has resulted in miscarriage of justice.


# 6. For all the aforesaid reasons, we find the judgment of the High Court to be unsustainable. Accordingly, the common judgment dated 02.05.2016 passed in RSA No.363 of 2008 and 364 of 2008 by the High Court is set aside. Since the appeals have not been adjudicated on merits, there is no option but to request the High Court to re-consider both the appeals in accordance with Section 100 of the Code and decide the same on their own merits. Considering the fact that the Second Appeals are of the year 2008, we request the High Court to consider the same expeditiously.


# 7. The Civil Appeals are allowed in aforesaid terms with no order as to costs..

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Monday, 29 June 2026

Imp. Rulings - Allottee’s Right of Interest & Compensation for Delayed Possession in RERA

Imp. Rulings - Allottee’s Right of Interest & Compensation for Delayed Possession in RERA


Index;

  1. HC Bombay (2026.06.08)  in Runwal Constructions Registered Partnership Firm Vs Bharat Shah [2026:BHC-AS:22794, Second Appeal No.251 Of 2022 With Civil Application No. 288 of 2019] [Delayed period interest mandatory]

  2. REAT Punjab (2026.05.25)  in Neeraj Verma & Anr. vs ATS Estates Pvt. Ltd.& Ors. [Complaint No. RERA/ GC No.0171 of 2023] 

  3. REAT Maharashtra (2026.04.27) in CCI Projects Private Limited v. Ramesh Shivsaran Singh & Ors.   [Appeal Nos. AT006-53079 to 53179 of 2021 ] [ Waiver of Interest]

  4. SCI (2026.06.04) in T.K.A. Padmanabhan vs Abhiyan Cooperative Group Housing Society Limited . [CIVIL APPEAL NO(S). 10724/2016] [Compensation for delayed Possession]

  5. HC Bombay (2025.10.08) in Keyana Estate LLP (Earlier Known as Kiyana Ventures LLP) Vs. Paresh Parihar & Anr.  [2025:BHC-AS:44637,  Second Appeal No. 537 Of 2025 with Interim Application No. 11757 Of 2025] 

  6. UP-REAT (2025.04.01) in Smt. Sushma Shukla Vs. Lucknow Development Authority,  [Appeal No.100 of 2019] [Waiver of delayed period interest]

  7. UP-REAT (2025.04.01) in Sanjeev Aggarwal Vs. Greater Noida Industrial Development Authority  [Appeal No.687 of 2022] [Allottee’s demand of interest]

  8. REAT Mumbai (2025.02.24) in Pratibha Fabrics Limited Vs. Macrotech Developers Limited,. [APPEAL NO. AT006000000052817 Of 2021] [Claim after possession]

  9. REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020

  10. REAT Mumbai (2024.08.21) in Spenta Builders Pvt. Ltd. Vs. Mr. Ashlesh Gosain .[(2024) ibclaw.in 115 REAT, Appeal No. AT00600000052402/20, Appeal No. AT00600000052942/21] [ Interest & compensation]

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i). HC Bombay (2026.06.08)  in Runwal Constructions Registered Partnership Firm Vs Bharat Shah [2026:BHC-AS:22794, Second Appeal No.251 Of 2022 With Civil Application No. 288 of 2019] held that;-

  • The object and reasons of the said Act and the peculiar position of allottees as explained by the Supreme Court to the effect that the buyer borrows money to pay for a house and simultaneously plays the role of a financer as building projects collect money upfront and this puts the buyer in a very vulnerable position i.e. the weakest stakeholder with a high financial exposure clearly shows that the legislative intent to use "shall " in Section 18 of the said Act is to make the same mandatory.

  • Thus it is specifically held by the Supreme Court that the proviso to Section 18(1) contemplates the situation where the allottee does not intend to withdraw from the project, however, there is delay in handing over possession of the apartment. In that case, he is entitled to and must be paid interest for every month's delay till handing over the possession and it is the entire discretion of the allottee either to withdraw from the project and seek refund, interest and compensation or to continue with the project and seek interest for every month's delay in handing over possession.

  • In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made "without prejudice to any other remedy available to him".

  • Section 18 of the RERA gives unqualified statutory right to the allottees if there is delay in handing over possession by the promoter and if the allottee does not intend to withdraw from the project, he shall be paid every month's interest for delay in handing over possession as such rate as may be prescribed.

  • In this context, the Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd.(supra) in paragraphs 22 and 25 has expressly observed that the allottee has an unqualified right to claim interest under Section 18(1) of the RERA Act if the promoter fails to discharge his obligation in accordance with the terms and conditions of the agreement. This unqualified right is not dependent on any contingencies or stipulations and therefore the legislature has consciously provided this right of refund as an unconditional absolute right to the allottee if the promoter fails to give possession within the stipulated time regardless of unforeseen events or stay order of the Court which is in either way not attributable to the allottee.

  • Thus, it is clear that the doctrine of frustration comes into play when a contract becomes impossible of performance, after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Contract Act. However, the performance of a contract is never discharged merely because it may become onerous to one of the parties. It is settled legal position that this doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances.

[ Link Synopsis ]

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ii). REAT Punjab (2026.05.25)  in Neeraj Verma & Anr. vs ATS Estates Pvt. Ltd.& Ors. [Complaint No. RERA/ GC No.0171 of 2023] held that;-

  • The right to claim interest on the period of delayed possession is an indefeasible and unqualified right given to an allottee by the statute which cannot be taken away or declined as has been observed by Hon’ble Supreme Court in its landmark decision in M/s. Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P. and others in Civil Appeal Nos. 6745-6749 of 2021.

[ Link Sunopsis ]

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iii) REAT Maharashtra (2026.04.27) in CCI Projects Private Limited v. Ramesh Shivsaran Singh & Ors.   [Appeal Nos. AT006-53079 to 53179 of 2021 ] held that;-

  • The substantive provisions of Section 18 (1) (a) of RERA Act, 2016 would prevail to provide interest and/or compensation on account of delay, rendering Section 55 of the Indian Contract Act ineffective.

  • Right conferred under Section 18 of RERA Act, 2016 to allottees is indefeasible. Section 18 of RERA Act itself is a notice to the promoter about the claim of allottees and therefore, merely because allottees have made payments to promoter towards consideration value even after unilateral change of dates of possession by the promoter that does not mean that allottees have waived their right to claim interest.

  • Therefore, we are of the considered view that there is no waiver and allottees are well within their right to claim interest for delay in possession in terms of Section 18 (1) (a) of RERA Act, 2016.” 

[ Link Synopsis ]

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iv). SCI (2026.06.04) in T.K.A. Padmanabhan vs Abhiyan Cooperative Group Housing Society Limited . [CIVIL APPEAL NO(S). 10724/2016] held that;

  • A claim for compensation for delayed possession necessarily arises from the period prior to the actual delivery of possession. The subsequent receipt of possession cannot, by itself, extinguish the right of the allottee to seek adjudication of a claim for compensation for the alleged delay.

[ Link Synopsis ]

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v).  HC Bombay (2025.10.08) in Keyana Estate LLP (Earlier Known as Kiyana Ventures LLP) Vs. Paresh Parihar & Anr.  [2025:BHC-AS:44637,  Second Appeal No. 537 Of 2025 with Interim Application No. 11757 Of 2025] held that;

  • in view of the decision of the Supreme Court in the case of M/s Newtech Promoters and Developers Pvt Ltd Vs State of U.P. & Ors,[ 2021 SCC OnLine SC 1044.] the allottee has an unqualified right to seek the interest on the delayed handing over the possession of the flat, as agreed.

  • A mere offer to deliver possession of the subject flat, without complying with the necessary conditions subject to which the O.C. has been issued, where those conditions bear upon the occupation of the subject flat as a habitable unit, cannot be considered as the compliance of the obligation of the promoter under the Act, 2016.

  • Section 270A of the MMC Act, inter alia provides that no person shall occupy or permit to be occupied, or use or permit to be used, any premises or part thereof until he has obtained a certificate from the Commissioner to the effect that there is adequate supply of water to the persons intending to occupy or use such premises.

  • In these circumstances, the Appellate Tribunal was justified in holding that the Appellant committed default in the delivery of the possession of the subject flat, even after the grant of O.C. At any rate, the grant of O.C. was also much beyond the agreed date of delivery of possession of the subject flat. A clear case of violation of the provisions of Section 18 of the Act, 2016 was made out.

  • The submission of Mr. Dave premised on the force majeure is required to be noted to be repelled as in view of the decision of the Supreme Court in the case of Newtech Promoters and Developers (Supra) such submission cannot be readily acceded to. Even otherwise, no case of unforeseen event resulting in delay has been made out.

[ Link Synopsis ]

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vi). UP-REAT (2025.04.01) in Smt. Sushma Shukla Vs. Lucknow Development Authority,  [Appeal No.100 of 2019] held that.

  • The allottee on booking/allotment of the unit, the document would bind the promoter to the declared date of completion. In the event no date is declared, in that event three years would be taken as the tentative completion date depending on facts and circumstances of each case vide, M/s. Fortune Infrastructure. Vs. Trevor D’lima and others: (2018) 5 SCC 442.

  • In the event, the date of completion of the project with U.P. RERA, being at variance with the declared date of completion would have no bearing on computation of the interest component on the deposits made by the allottee. The burden of interest, on the promoter begins to run from the date declared by the promoter to the appellant till handing over possession of the unit.

  •  In the event, promoter declares a date subsequent to the earlier date of completion, it would mean and indicate that the project is delayed. Section 18 (1) of the Act would become operative leaving it open to the allottee to either continue in the delayed project or withdraw from the project.

  • It, therefore, follows that the declaration of a subsequent date of  completion with RERA made by the promoter does not shift the liability and obligation mandated under Section 18 (1) of the Act, 2016.

  • The mandate of Section 18 (1) is absolute and unconditional casting upon the promoter a positive mandatory obligation to pay interest to the allottee who has continued in the project for the delay. The liability to pay interest by the promoter would start running from the initial date declared by the promoter. The promoter cannot recile/retract from his commitment declared to the allottee.

  • A mandatory statutory obligation is cast upon the promoter to pay the interest to such allottees. The expression employed by the legislature is, ‘shall be paid, by the promoter,’ to the allottee. Unlike the main provision, under the proviso allottee  is not required to make a demand for the interest. In the event promoter fails to comply the mandatory obligation to pay the interest, the promotee exposes itself for penal consequences under Chapter VIII of Act, 2016.

  • Hence, settlement cannot override the rights and obligations created by statutes in favour of a party. The proviso to Section 18 (1) of the Act, 2016 casts upon the promoter a statutory obligation to pay interest for the delayed project creates a statutory right in favour of allottee to receive the amount towards interest.

  • Any agreement/settlement circumventing the statutory provision (proviso to Section 18 (1) of the Act, 2016, cannot contradict or circumvent the statutory requirements and the mandatory legal obligations that govern to protect the interest of the allottee.

  • The compromise or the contract must align with the statutory provisions and the terms of the contract cannot be interpreted in a manner that would contradict the statutory requirement of Act, 2016.

[ Link Synopsis ]

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vii). UP-REAT (2025.04.01) in Sanjeev Aggarwal Vs. Greater Noida Industrial Development Authority  [Appeal No.687 of 2022] held that.

  • In view thereof, the offer of possession made by the respondent without obtaining completion certificate is not a legal and valid offer of possession of the unit. The appellant was justified in not accepting the physical possession of the unit as the respondent/promoter was at default. There is no concept in law/bye laws of the competent authority of issuing completion certificate (OC/CC) of a project from a retrospective date.

  • The offer of possession, execution of lease/sale deed and thereafter physical possession of the unit in habitable condition follows OC/CC and not other way round as per scheme of Act 2016.

  • That the declaration of a subsequent date of completion with RERA made by the promoter does not shift the liability and obligation mandated under Section 18 (1) of the Act, 2016 to a future date.

  • The mandate of Section 18(1) (proviso) is absolute and unconditional casting upon the promoter a positive mandatory obligation to pay interest to the allottee who has continued in the project for the delay. The liability to pay interest by the promoter would start running from the initial date of completion declared by the promoter to  the allottee. The promoter cannot recile/retract from his commitment declared to the allottee.

  • Unlike the main provision, under the proviso, allottee is not required to make a demand for the interest. In the event promoter fails to comply the mandatory obligation to pay the interest, the promoter, in that event, exposes itself for penal consequences under Chapter VIII of Act, 2016.

[ Link Synopsis ]

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viii). REAT Mumbai (2025.02.24) in Pratibha Fabrics Limited Vs. Macrotech Developers Limited,. [APPEAL NO. AT006000000052817 Of 2021] held that;

  • It is the settled positions of law that the provisions of the Section 18 of the Act continue to be applicable even if the captioned complaints have been filed after taking possession of the respective subject flats.

  • Therefore, it is more than evident that the possession offer letter dated 14th January 2018 and the e-mail dated 06th June 20t7 had been prepared as one sided, without full disclosure of all relevant specific details and therefore, the possession letter is unreasonable, one sided and imbalanced.

  • A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 ® of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

[ Link Synopsis ]

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ix). REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020] held that; 

  • The issue of offering handing over possession prior to obtaining occupancy certificate was also examined by the Hon’ble Supreme Court in Civil Appeal Nos. 1232 and 1443-1444 of 2019 R.V. Prasannakumaar and ors. Vs. Mantri Castles Pvt. Ltd. and ors. decided on 11.02.2019 wherein it has been observed that possession cannot be handed over prior to obtaining occupancy certificate. 

  • That as per the provisions of the U.P. Apartments Act, 2010 read with the provisions of Act, 2016  a  Promoter is required to offer legal and habitable possession to the allottees only after obtaining OC/CC and ask for clearing dues by raising final demand.

  • The failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. Given the one-sided nature of the Apartment Buyer’s Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.

  • That the right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed and the

  • Proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession.

  • It is upto the allottee to proceed either under Section 18(1) or under proviso to Section 18(1).

  • If an allottee chooses to remain in the project and in case the allottee seeks refund then he is entitled for interest on the deposited amount and/or compensation in accordance with the provisions of the Act 2016, which in our considered view will be in accordance with the principles of equity as well.

[ Link Synopsis ]

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x). REAT Mumbai (2024.08.21) in Spenta Builders Pvt. Ltd. Vs. Mr. Ashlesh Gosain .[(2024) ibclaw.in 115 REAT, Appeal No. AT00600000052402/20, Appeal No. AT00600000052942/21] held that; 

  • If the Allottee chooses to continue in the project, he is entitled only interest on delayed possession and not compensation.

  • Explanation to Section 6 of RERA which clearly clarifies that" force majeure" shall mean case of war, flood, drought, fire, cyclone' earthquake or any other calamity caused by nature, affecting the regular development of real estate project.

  • Therefore, we are of the considered view that delay in granting permissions/ sanctions from various competent authorities, etc. as contended by the Promoter cannot be construed as "force majeure” The Promoter can neither expect Allottee to be aware of the likely delay nor can make Allottee bear the brunt of the failure on the part of Promoter act professionally by assessing the requisite date for possession'

[ Link Synopsis ]

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