A.          Introduction

1. The Hon’ble Supreme Court of India’s (“SC”) judgment in Sriganesh Chandrasekaran & Others v. M/S Unishire Homes LLP & Others (Civil Appeal Nos. 10527-10528 of 2024) dated February 20, 2026, delivers much-needed clarity on a critical question: when a real estate project, developed under a joint development arrangement (“JDA”), is delayed, then who bears liability for compensating flat buyers? In JDA, wherein landowners contribute land and developers provide development and construction expertise and capital, disputes arising from delayed delivery of possession have become increasingly prevalent.
2. This article analyzes the ruling, relevant legal provisions under the Consumer Protection Act, 2019 (“CP Act”), and the judicial precedents that shaped the Court’s reasoning.

B.           Factual Background and Procedural History

1. The case arose from a JDA entered into between landowners and a developer named Unishire Homes LLP (“Developer”). The landowners in such case executed certain development agreement and general power of attorney (“GPA”) in favor of the Developer, authorizing the Developer to enter into sale agreements, receive consideration, and complete construction formalities. The Developer executed sale agreements with certain flat buyers from July 29, 2013, onwards, promising to deliver possession within 36 months. However, the initial 36 month period for handing over possession expired on August 24, 2016. The grace period of 6 months also expired on February 24, 2017. However, the project remained incomplete.
2. The aggrieved flat buyers filed a complaint before the National Consumer Disputes Redressal Commission (“NCDRC”) on August 18, 2017, alleging deficiency in service and unfair trade practices. The NCDRC, vide its judgment dated October 19, 2023, found deficiency in service due to a delay of more than 6 years and directed the Developer to complete construction and pay interest at 6% per annum on amounts deposited, increasing to 9% in case of default. However, the landowners were not held liable for the delay.
3. The appellants filed a review petition seeking to hold the landowners jointly and severally liable and to enhance the compensation to Rs. 5/- per square feet per month, along with 6% interest on the deposits. The NCDRC, vide its order dated December 15, 2023, partly allowed the review petition and held the landowners jointly and severally liable for completion of construction and for payment of delay compensation. However,
   the relief to award delay compensation @ Rs. 5/- per square feet along with 6% interest, on the deposits made by the appellants was declined. The SC set aside this order on May 3, 2024, as it had been passed without affording any opportunity of hearing to the landowners, thereby violating natural justice principles; and remanded the matter. On remand, the NCDRC, vide its order dated July 30, 2024, held that the landowners could not be jointly liable for deficiency in service, but directed both parties to transfer title and execute sale deeds.

C.          Issues Before the SC

The appeals filed under Section 67 (Appeal Against Order of National Commission) of the CP Act presented the following key issues:

• Whether landowners could be held jointly liable with the developer for delay compensation;
• Whether the GPA created a principal-agent relationship making landowners vicariously liable; and
• Whether NCDRC was correct in directing landowners to transfer title despite finding them not liable for delay compensation.

D.          Relevant Contractual Provisions

The SC examined Clauses 2 and 3 of the GPA and Clause 7 of the JDA, which provided mutual indemnities. Clause 7.4 of the JDA critically provided that in the event of any breach between the Developer and purchasers, the landowners “shall not be liable for any consequences thereof” and “the Developer shall always indemnify and keep indemnified the first party/owners.” Clauses 2 and 3 of the GPA authorized the Developer to enter into sale agreements for 64% of the undivided share (Developer’s share), execute conveyances, and receive consideration.

E.           SC’s Reasoning

1. On a conjoint reading of the JDA and GPA, the SC held that for flats falling in the Developer’s share, the Developer alone had the right to enter into sale agreements, undertake construction, receive consideration, and convey title. The SC emphasized that the appellants did not allege any delay caused by the landowners’ act or omission; liability was sought solely on the basis of an alleged principal-agent relationship.
2. The Court articulated a clear principle: “For the lapse on the part of the developer, the landowners, who are in no way concerned with the construction, cannot be held liable for deficiency in service, particularly when the developer has indemnified them against acts of commission or omission in construction.” The SC upheld the NCDRC’s decision to fasten delay compensation liability solely on the Developer.
3. However, the SC distinguished between liability for deficiency in service and the obligation to convey title, holding that “landowners are undoubtedly jointly responsible with the developer to ensure transfer of title to the appellants.”
4. The SC examined several judicial precedents relied upon by the appellants. The appellants cited Syed Abdul Khader v. Rami Reddy, (1979) 2 SCC 601; Bangalore Development Authority v. Syndicate Bank, (2007) 6 SCC 711; Santhosh Narasimha Murthy & Ors. v. M/s Mantri Castles Pvt. Ltd. & Anr. (Civil Appeal No. 8418 of 2022); Akshay & Anr. v. Aditya & Ors. (Civil Appeal No. 3642 of 2018); and an order dated September 20, 2024 in Civil Appeal @ Diary No. 37702/2024 with SLP (C) @ Diary No. 33331/2024. However, the SC held that reliance on these decisions was misplaced and did not advance the appellants’ case. The Court noted that in Akshay (supra), the State Commission and NCDRC had held the Developer alone liable for payment of delay compensation, which was upheld by the SC, thus supporting the landowners’ position. Similarly, the order dated July 25, 2023 passed in Civil Appeal No. 8418 of 2022 directs the Developer alone to pay the delay compensation. Regarding the order dated September 20, 2024, the Court observed that the issue of joint and several liability was not adjudicated therein. The SC emphasized that joint and several liability must be decided on the facts of each case. Further, the SC specifically addressed Clauses V, VII, 12(b) and 12(c) of the sale Agreements relied upon by the appellants, holding that these clauses do not indicate that landowners are under any obligation to raise construction. The SC also considered Section 67 of the CP Act which provides for appeals from the NCDRC to the SC. For the aforementioned reasons, the SC found no merit in the appeals and dismissed them.

F.           Implications and Conclusion

1. The ruling in the present case establishes important principles, including that where the construction obligation is placed entirely on the Developer and landowners are indemnified, landowners cannot be saddled with delay compensation. Additionally, a GPA does not automatically create a principal-agent relationship making landowners vicariously liable. Furthermore, landowners remain jointly responsible for transfer of title despite exoneration from delay compensation, and joint liability must be determined on a case-by-case basis based on specific contractual terms.
2. The judgment brings much-needed clarity to liability allocation in JDAs. It strikes a balanced approach by protecting landowners from an unfair burden for delays they did not cause, while ensuring flat buyers’ interests are protected through the title transfer obligation.
3. For homebuyers, the judgment reinforces robust remedies against the developer under the CP Act, including refunds, interest, and compensation. The SC noted that the appellants’ interests have been fully protected as both the landowners and the Developer have been directed to transfer title. The cases analyzed demonstrate a consistent judicial approach emphasizing consumer protection, holding developers accountable for delays and deficiencies.
4. For landowners and developers, this judgment underscores the importance of clearly delineating responsibilities and including appropriate indemnity clauses. The contractual framework will be determinative of liability allocation.
5. Please watch this space for more, as we keep tracking this issue…