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Supreme Court Judgement on Possession Given with Sale Agreement

On 11 June 2021, the Supreme Court of India made a landmark judgment regarding possession given with sale agreements. The court ruled that possession given with a sale agreement cannot be considered as an outright sale unless all the essential elements of the sale, such as transfer of ownership and payment of consideration, are present.

The case involved a dispute between a developer and a homebuyer in a project located in Noida, Uttar Pradesh. The buyer had entered into a sale agreement with the developer in 2013 and had paid a substantial amount as consideration. The developer had given possession of the property to the buyer, but the transfer of ownership had not taken place due to non-completion of certain formalities.

The buyer approached the National Consumer Disputes Redressal Commission (NCDRC) seeking compensation for delayed possession and deficiency in service by the developer. The NCDRC had ruled in favour of the buyer, but the developer had challenged this decision in the Supreme Court.

The Supreme Court, in its judgment, emphasized that a sale agreement merely gives the buyer a right to purchase the property, and possession given with such an agreement cannot be considered as an outright sale. The court also clarified that possession given with a sale agreement does not transfer ownership, and the buyer does not become the owner of the property until the sale deed is executed and registered.

This judgment has far-reaching implications for the real estate sector, which has been grappling with numerous cases of delayed possession and disputes between buyers and developers. It is expected to bring in more transparency and accountability in the sector and discourage developers from taking undue advantage of buyers by giving possession without completing all the necessary formalities.

In conclusion, the Supreme Court`s judgment on possession given with sale agreements is a significant development in the real estate sector and is likely to have a positive impact on homebuyers. It reiterates the importance of completing all formalities before giving possession and ensures that buyers are not left in a lurch due to incomplete documentation or non-compliance by developers. The ruling is a step towards ensuring fairness, equity, and justice in the real estate sector.