Bombay HC: Plan Rejection Is Not Force Majeure, Delay Interest Can Be Decided Summarily
On 23 October 2026, the Bombay High Court held that rejection of building plans is not force majeure because getting plans sanctioned is the promoter's duty, and granted summary judgment for 9 percent interest on Rs 5.51 crore for a delay of nearly 12 years. What Bengaluru buyers should take from its reasoning on delay excuses and interest.
On 2 February 2008, buyers signed a registered agreement for two commercial units in Pittie Chambers near Mumbai's Bandra-Kurla Complex, paid the full Rs 5.51 crore, and were promised possession by 31 March 2008. A partial occupancy certificate came on 24 July 2019. Possession came on 15 February 2020, a delay of 11 years, 10 months and 15 days. The developer blamed the municipality for rejecting its building plans. On 23 October 2026, the Bombay High Court said that was not force majeure.
The judgment, in DNM Trustee Services Private Limited v. Victoria Enterprises Limited & Ors., Interim Application (L) No. 2956 of 2026 in Commercial Suit No. 39 of 2015, was delivered by Justice Sandeep V. Marne. We read the judgment, published with a LiveLaw report on 26 October 2026. The case involved Mumbai commercial units, but its reasoning on delay excuses is relevant to Bengaluru buyers reading the force majeure clause in any agreement. It is buyer guidance on a reported judgment, not legal advice.
The short answer. The court held that "it is the duty of the promoter to get the plans sanctioned" and that if the promoter submits faulty plans and invites rejection, the allottee cannot be made to suffer, so rejection of plans is not force majeure. It also held that interest for delayed possession can be decided by summary judgment without a full trial, while compensation may need evidence. It ordered simple interest at 9 percent a year, the contract rate, on Rs 5.51 crore from 31 March 2008 to 15 February 2020. The trade-off: interest at the contract rate can be faster to win than compensation, but it may be lower than what you claim, as here, where 12 percent was sought.
What did the Bombay High Court decide?
That the developer must pay interest for the delay. According to the report, the court partly allowed the buyers' application for summary judgment under Order XIII-A of the Code of Civil Procedure. It directed Victoria Enterprises to pay simple interest at 9 percent a year on Rs 5.51 crore from 31 March 2008 to 15 February 2020, applying the contractually agreed rate instead of the 12 percent claimed. It declined summary judgment on incomplete common amenities, holding that the issue required an evidentiary trial.
By our arithmetic, 9 percent simple interest on Rs 5.51 crore over the 4,338 days between those two dates comes to roughly Rs 5.9 crore, more than the price paid. That figure is our calculation from the dates and rate in the report, not a figure stated by the court.
Why is rejection of plans not force majeure?
Because getting plans approved is the promoter's job. The court said, as quoted in the report: "In any case, it is the duty of the promoter to get the plans sanctioned and to construct the building accordingly. If the promoter submits faulty plans and invites rejection, the allottee cannot be made to suffer. Thus, rejection of plan by the Planning Authority does not constitute a force majeure event."
The report also says the developer produced no documentary evidence to establish that the municipal authority had rejected its building plans. So the defence failed on the evidence as well as on principle.
| Date | Event | Source | What it shows a buyer |
|---|---|---|---|
| 2 February 2008 | Registered agreement for sale for two units | Judgment and report | Interest terms were in the agreement from the start |
| 31 March 2008 | Promised possession date | Report | Interest runs from this date |
| 24 July 2019 | Partial occupancy certificate obtained | Report | More than 11 years after the promised date |
| 15 February 2020 | Possession handed over | Report | Interest ends on this date |
| 23 October 2026 | Summary judgment for interest at 9 percent | Judgment | Interest decided without a full trial |
How is interest different from compensation?
Interest is easier to decide. The court held that circumstances explaining a developer's delay might be relevant to a compensation claim but would not excuse liability to pay interest for delayed possession. In its words: "The mitigating circumstances, if any, in favour of the promoter are relevant for deciding the issue awarding compensation, which is distinct and different from awarding interest."
The report says the court clarified that compensation claims may need an evidentiary hearing, but claims for interest on the amount paid for the period of delay can be decided without a full trial or oral evidence. Applying the test for summary judgment, it found the developer had no real prospect of defending the interest claim. This mirrors a distinction we saw in a Karnataka case today, where the tribunal sent compensation needing inquiry to the Adjudicating Officer; see our report on the ALN Arambh ruling.
What other defences did the developer raise?
Two more, and both failed. First, the developer challenged the buyers' right to sue, because the units had been transferred through family arrangements to a family trust represented by DNM Trustee Services. The court held that such transfers could not extinguish the purchasers' contractual rights, observing that the developer "cannot be permitted to escape the liability to pay interest just because the family was reconstructed during this time gap of 12 years".
Second, the developer argued that Section 79 of RERA barred the civil court's jurisdiction. The report says the court rejected this, holding that the developer could not rely on that provision to challenge jurisdiction when it had not registered the project under RERA. That is a reminder that RERA registration status can affect which forum is open to a buyer.
Why did the 9 percent rate apply?
Because the agreement said so. The judgment records the buyers' submissions: that 12 percent a year was fair, that alternatively the Maharashtra RERA rate of SBI's highest marginal cost of lending rate plus 2 percent could be granted, and that in any case Clause 8 of the agreement provided for 9 percent interest. The court applied the contractual 9 percent, as the report notes.
The judgment also records how the units reached the trust that sued. According to the buyers' submissions, a registered partition deed gave the units to the purchasers' mother, who then transferred them to the plaintiff as trustee by a registered Deed of Discretionary Trust dated 24 March 2014, with members of the family, including the purchasers, as beneficiaries. The buyers also pointed to the definition of allottee under Section 2(d) of RERA, which they said includes a person who subsequently acquires an allotment. The court accepted that the family transfers did not wipe out the right to interest.
What does this mean for Bengaluru buyers?
Read the delay clauses before you sign, and be sceptical of approval-related excuses later. Agreements often list events the developer says are beyond its control. This judgment, from another state's High Court, treats rejection of plans as within the promoter's responsibility. It is a reasoned view a buyer can point to, though Karnataka forums will apply their own approach. In a separate case reported in Haryana, the regulator also rejected a pandemic-based delay defence on the facts; see our guide to Haryana RERA's three tests for a valid possession offer.
Also note the interest rate in your agreement. Here the court applied the 9 percent contract rate rather than the 12 percent the buyers claimed. The clause you sign can set the rate you later recover.
What should you ask a developer who blames approvals?
Ask for the paper. The developer in this case produced no documentary evidence of rejection, and the defence failed. If a developer says approvals caused a delay, ask in writing for copies of the applications, the authority's responses and the dates, and keep the reply. If no documents arrive, record that too.
Keep the timeline in view as well. In this case the gap between the promised date and the partial occupancy certificate was more than 11 years, and the buyers' suit, Commercial Suit No. 39 of 2015, was still producing orders in 2026. According to the report, Advocates Viraj Parikh, Parag Kabadi, Anshita Sethi and Vishal Tiwari, instructed by DSK Legal, appeared for the buyers' trust, and Advocate Manish N. Jain, instructed by S.M. Jain Associates, for the developer. A buyer facing a long delay should expect a long process and keep the paperwork organised from day one.
A seven-point checklist on delay and force majeure clauses
- Read the force majeure clause in your agreement before signing.
- Note the interest rate the agreement sets for delayed possession.
- Check that the project is registered with K-RERA, and keep a copy of the registration.
- If delay is blamed on approvals, ask for the application and rejection documents in writing.
- Keep proof of the full amount paid and the promised possession date.
- Separate your interest claim from any compensation claim when you file.
- If ownership passes within your family, keep the transfer documents with the agreement.
Frequently asked questions
Is rejection of building plans a force majeure event?
Not according to the Bombay High Court's 23 October 2026 judgment. It said it is the duty of the promoter to get the plans sanctioned, and if the promoter submits faulty plans and invites rejection, the allottee cannot be made to suffer. The developer also produced no documents proving rejection.
Can delay interest be awarded without a full trial?
In this case, yes. The court said claims for interest on the amount paid for the delay period can be decided without a full trial or oral evidence, while compensation may need an evidentiary hearing. It granted summary judgment under Order XIII-A of the Civil Procedure Code.
What interest did the court order?
Simple interest at 9 percent a year on Rs 5.51 crore from 31 March 2008, the promised possession date, to 15 February 2020, when possession was handed over. The court applied the rate agreed in the contract rather than the 12 percent the buyers had claimed.
Does this Bombay ruling apply to Bengaluru buyers?
It is a judgment of another state's High Court, so treat it as persuasive reasoning rather than a rule in Karnataka. It is still useful: approval delays are treated as the promoter's responsibility, interest and compensation are distinct, and the rate in your agreement can set what you recover.
Last updated 2026-11-04. PropNewz Team.
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