Fit-Out Possession Without Completion Certificate is Illegal: Chandigarh State Consumer Commission Holds Omaxe Liable for Delay
Author Adv. Sulaiman Bhimani Founder The Law Suits (Law Firm in Mumbai)
The State Consumer Disputes Redressal Commission, U.T., Chandigarh, presided over by Hon’ble Mr. Justice Raj Shekhar Attri and Hon’ble Mr. Preetinder Singh, has delivered a landmark judgment that strikes at the heart of “paper possession” tactics used by developers. The Commission ruled that offering “fit-out possession” in the absence of a Completion Certificate (CC) is not only a deficiency in service but is legally void
The Case Background: The complainants, medical professionals who frequently visit Chandigarh, booked a unit in the project “The Lake” at Omaxe New Chandigarh in 2015. The developer promised possession by March 18, 2019, under a subvention scheme where the builder was to bear the EMI costs until actual possession
However, construction was delayed, and the developer stopped paying EMIs in 2020 while the project was still incomplete. In March 2024, the developer issued a “fit-out possession” letter, demanding further payments despite lacking the necessary statutory certificates
Key Legal Observations: The Commission’s order highlights several critical protections for homebuyers:
Fit-out vs. Legal Possession: The Commission clarified that a “fit-out” letter merely allows internal work and does not constitute a valid offer of possession in the eyes of the law.
The Necessity of CC: While the developer obtained an Occupation Certificate (OC) in October 2024, they failed to produce a Completion Certificate. The Commission emphasized that a CC is mandatory under Section 14(1) of PAPRA 1995 to ensure all internal and external development works (roads, electricity, sanitation) are complete.
Subvention Obligations: Because possession was never lawfully offered (due to the missing CC), the developer remains contractually liable to pay the Pre-EMI interest to the bank.
Investor vs. Consumer: The Commission reaffirmed that the burden lies on the builder to prove a buyer is an “investor”. Since Omaxe failed to provide evidence of commercial intent, the doctors were rightly classified as “consumers”
The Award/Relief: In its final order dated December 22, 2025, the Commission directed Omaxe to
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- Deliver Physical Possession: Hand over the unit with all promised amenities (including the club house) and the Completion Certificate within three months.
- Refund Pre-EMIs: Refund the EMIs paid by the complainants from March 2024 until the loan closure.
- Delay Compensation: Pay interest at 9% p.a. on the total deposited amount from the date of loan closure until possession is delivered.
- Agony & Costs: Pay Rs. 75,000 for mental agony and Rs. 35,000 as litigation expenses.
Conclusion: This judgment reinforces that developers cannot hide behind “fit-out” permissions to escape their liability for delays. At The Law Suits, we stand by the principle that a home is only “delivered” when it is legally habitable and fully certified.
In Sincerity, Adv. Sulaiman Bhimani Founder “The Law Suits”
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