No OC, No Valid Offer: NCDRC Holds Developer to Its Subvention Promise

In July 2014, two buyers were allotted flats in Mahagun Meadows, a group housing project in Sector 150, Noida, under a "No Pre-EMI Plan Till Possession" scheme, and two more joined through an allotment in July 2016. The developer would carry the interest on their home loans until handover, and handover was promised by June 30, 2018. On January 2, 2024, more than five years late, the developer offered possession for fit-outs, along with final statements and stamp duty demands. There was still no occupancy certificate. The buyers paid under protest and went to the National Consumer Disputes Redressal Commission.

The NCDRC's order in Manish Bahuguna v. M/s Logix Heights Pvt. Ltd., Consumer Complaint No. 102 of 2024, was passed in October 2026 by Presiding Member Sudip Ahluwalia and Member Dr. Sadhna Shanker. For Bengaluru buyers offered a subvention plan, where the builder pays pre-EMIs for a period, it is a detailed look at what that promise is worth when the project runs late.

The short answer. The Commission held that "an offer of possession without a valid occupancy certificate is not a legal and valid offer," rejected the force majeure defence, and held the developer liable to pay pre-EMIs to the bank under the subvention scheme till the offer of possession. It directed possession with a valid occupancy certificate, a fresh statement of account adjusting pre-EMIs, delay compensation at 6 percent a year from June 30, 2018 or the deposit dates until handover, and Rs 50,000 in litigation costs to each complainant, all within three months, failing which 9 percent applies. The trade-off: delay compensation came at 6 percent, not the 9 to 10 percent the buyers first sought, and possession still depends on the developer obtaining the occupancy certificate.

Who were the buyers, and what did they pay?

According to the order, Manish Bahuguna was allotted two flats, 1808 and 1908, on July 29, 2014, at Rs 90,18,299 each, fully paid with a final payment on June 12, 2024. Jiten Kapoor was allotted flat 1408 on the same date for Rs 93,75,731, fully paid by July 1, 2024. Himanshu Madan and Madhur Madan were allotted flat 515 on July 29, 2016 for Rs 83,86,873 and had paid Rs 75,46,686. All had the same stipulated possession date: June 30, 2018, under clause 12.1 of the allotment letter, which promised delivery within 48 months including a six-month grace period.

Why was the January 2024 possession offer not valid?

Because there was no occupancy certificate. The developer said construction was complete and that it had applied for the certificate with no objection certificates for fire, electrical, structural and lift safety. The Commission was clear: an offer without a valid occupancy certificate is not a legal and valid offer. It added that "it is the responsibility of the opposite parties to obtain the occupancy certificate within the stipulated period and not of the complainants."

The buyers had also challenged the final statements that came with the offer, including possession-related charges such as IFMS and a sinking fund, which they said were premature. The Commission's operative directions require a fresh statement of account at handover. The order does not separately rule on several of the buyers' other claims, including a multi-point electricity connection, EWS charges and Rs 75,000 for mental agony.

What did the subvention scheme actually promise?

Under the subvention letters, dated in August 2014 and July 2016, the developer was to pay pre-EMIs to the bank. The Commission read the scheme as requiring the developer to pay pre-EMIs beyond the bank's 42-month limit where delays were caused by factors within its control, and held that benefits continue until the offer of possession. It held the developer "liable to pay the Pre-EMIs to the bank under the subvention scheme till the offer of possession."

The buyers' complaint was that pre-EMIs were not fully reimbursed. For example, Manish Bahuguna said he paid Rs 10,48,774 in pre-EMIs, which the developer's ledger adjusted but its final statement did not credit. The developer argued that the pre-EMIs had been adjusted in the final dues and accepted as full and final settlement, so the buyers were estopped. The Commission's direction to issue a fresh statement adjusting pre-EMIs paid to the bank answers that dispute in the buyers' favour.

PropNewz examined subvention schemes and their risks in our guide to builder-pays-EMI schemes, and what makes a possession offer valid in our report on the three tests for a possession offer.

Why did force majeure and the other defences fail?

The developer cited demonetisation, GST, the Supreme Court's construction ban of November 4, 2019 in Delhi-NCR, COVID-19 and a real estate recession. The Commission rejected the plea, noting that allotments were made in 2014 and 2016, the deadline was June 30, 2018, and the occupancy certificate still had not been obtained after more than 12 years for some buyers and 10 for others. It said the developer had "kept the money of the complainants for an inordinately long period."

The developer also argued that Manish Bahuguna, having booked two flats, was not a consumer because the purchase was commercial. The Commission rejected this because the developer produced no evidence of commercial purpose and the burden was on it, relying on the Kavita Ahuja decision of 2016.

What did the buyers ask for, and what changed along the way?

The original complaint was wide. It asked for possession with all promised facilities and conveyance after a valid occupancy certificate, reimbursement of pre-EMIs until habitable possession, interest from June 30, 2018, a multi-point electricity connection, a declaration that certain allotment clauses were one-sided, no interest on excess payments, no duplicate common-area EWS charges for flat 515, Rs 75,000 per complainant for mental agony and Rs 50,000 each for litigation costs.

The revised application of July 14, 2026 narrowed the claims: a fresh statement of account, possession with an occupancy certificate within three months, delay compensation at 6 percent, reimbursement of pre-EMIs, refund of excess payments with 6 percent interest, and Rs 75,000 per complainant for litigation costs. The final directions track most of the revised list, with litigation costs fixed at Rs 50,000 each.

The developer's estoppel argument is worth a buyer's attention. It said the buyers had accepted the adjusted dues as full and final settlement. The buyers' answer was that they protested and paid under protest. The Commission's directions went the buyers' way, and a written protest at the time of payment is the kind of record that supports such an answer.

Why 6 percent, when the buyers asked for more?

The original complaint sought 9 percent a year for some complainants and 10 percent for another from June 30, 2018. By a revised application of July 14, 2026, the buyers sought delay compensation at 6 percent. Relying on Supreme Court decisions in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana v. DLF Southern Homes, the Commission held 6 percent a year "just and reasonable."

The same 6 percent applies to any refund of excess payment shown by the final statement, from the deposit date until payment. If the developer does not comply within three months, interest at 9 percent a year is payable on the defaulted amount.

What should a Bengaluru buyer check before signing up for a subvention plan?

Read the subvention letter as carefully as the agreement, because that is the document the Commission relied on. The checks below follow the issues in this case.

1. Get the subvention letter in writing, signed by the developer, with the exact pre-EMI period.
2. Check what happens to pre-EMIs if the project is delayed beyond the bank's limit.
3. Read the tripartite agreement with the bank and the developer before signing.
4. Keep bank statements showing every pre-EMI you paid yourself.
5. Match each pre-EMI against the developer's ledger and final statement.
6. Do not accept a possession offer as final without a valid occupancy certificate.
7. If you pay disputed charges to take possession, record in writing that you pay under protest.

The Commission also noted the developer's argument that buyers had paid only 10 to 20 percent from their own funds, with the rest from bank loans. That did not change the result, but it is a reminder that in a subvention plan, the buyer's loan and the builder's promise are tied together until the keys are handed over.

Frequently asked questions

What did the NCDRC decide in Manish Bahuguna v. Logix Heights?

In October 2026 it held the January 2, 2024 possession offer invalid without an occupancy certificate, rejected force majeure, and directed possession with a valid certificate, a fresh statement adjusting pre-EMIs, 6 percent delay compensation from June 30, 2018 or deposit dates, and Rs 50,000 costs per complainant within three months.

Is a possession offer valid without an occupancy certificate?

Not according to the Commission, which said an offer of possession without a valid occupancy certificate is not a legal and valid offer. It added that obtaining the certificate within the stipulated period is the developer's responsibility, not the buyers', and treated the failure to hand over possession on time as deficiency in service.

Who pays pre-EMIs under a subvention scheme when the project is delayed?

In this case the Commission read the subvention letters as requiring the developer to pay pre-EMIs beyond the bank's 42-month limit where delays were within its control, with benefits continuing until the offer of possession. It held the developer liable to pay the pre-EMIs to the bank till the offer of possession.

Why did the buyers get 6 percent and not 9 or 10 percent?

The original complaint sought 9 and 10 percent, but a revised application in July 2026 sought 6 percent. Relying on Supreme Court decisions in Arifur Rahman Khan and Aleya Sultana, the Commission held 6 percent a year just and reasonable, with 9 percent payable if the developer misses the three-month compliance deadline.

Last updated 2026-11-06. PropNewz Team.