Landowners Not Liable for Delay Compensation Under JDA/GPA When Construction Obligation Rests Solely With Developer; Yet Jointly Bound to Convey Title
1. Introduction
In Sriganesh Chandrasekaran v. M/s Unishire Homes LLP (2026 INSC 172), the Supreme Court of India examined whether
landowners who entered into a Joint Development Agreement (JDA) and executed a General Power of Attorney (GPA)
in favour of a developer could be held jointly and severally liable with the developer to pay delay compensation
to flat buyers for delayed possession.
The appellants (flat buyers) complained of deficiency in service due to a delay exceeding six years beyond the contractual possession date.
The National Consumer Disputes Redressal Commission (NCDRC) held the developer liable for delay compensation but, in its final review outcome
after remand, declined to fasten monetary liability on the landowners—while still directing both landowners and developer to ensure
transfer of title and execution of sale deeds.
The core issue before the Supreme Court was narrow: whether the landowners are jointly and severally liable with the developer for delay compensation,
especially on a claimed principal–agent theory arising from the GPA.
2. Summary of the Judgment
- The Supreme Court dismissed the appeals and upheld the NCDRC’s approach.
- The Court held that, on the terms of the JDA and GPA, the developer alone bore the obligation to construct and deliver possession for flats in the developer’s share.
- Since the delay related to construction/possession and no delay was attributable to landowners, landowners could not be held liable for deficiency in service for delayed possession.
- However, the Court affirmed that landowners are jointly responsible with the developer to convey title and execute sale deeds in favour of purchasers.
3. Analysis
3.1 Precedents Cited
The appellants relied on this authority to support a broad proposition that a principal may be responsible for acts of an agent.
The Supreme Court, however, treated the dispute as turning primarily on the contractual allocation of obligations under the JDA/GPA.
While agency principles can apply where an agent’s acts bind the principal, the Court found the present GPA to be focused on
sale/conveyancing powers in relation to the developer’s share, not on imposing landowner responsibility for construction delays.
3.1.2 Bangalore Development Authority v. Syndicate Bank, (2007) 6 SCC 711
Cited by the appellants, this case was invoked to support accountability frameworks in property/allotment contexts.
The Court did not apply it to extend landowner liability here, because the factual and contractual foundation was different:
the landowners were not the contracting party promising construction timelines; the developer was.
3.1.3 Santhosh Narasimha Murthy & Ors. v. M/s Mantri Castles Pvt. Ltd. & Anr. (Civil Appeal No. 8418 of 2022)
The Supreme Court noted that this decision (as relied upon) involved directions where the developer was made to pay delay compensation.
It did not establish a blanket rule that landowners must also pay delay compensation in every JDA-backed development.
The Court emphasized that joint/several liability depends on case-specific contractual terms and causation.
3.1.4 Akshay & Anr. v. Aditya & Ors. (Civil Appeal No.3642 of 2018)
This precedent proved decisive in the Court’s treatment of the appellants’ argument: the Court expressly observed that in Akshay,
the State Commission and the NCDRC held the developer alone liable for delay compensation, and that position was upheld by the Supreme Court.
The Court reasoned that Akshay therefore supported the landowners, not the buyers, on the question of delay compensation liability.
3.1.5 Order dated 20.09.2024 in Civil Appeal Diary No.37702 of 2024 and SLP (C) with Diary No. 33331 of 2024
The Court held that this order did not adjudicate the question of joint and several liability between landowners and developer,
and thus could not be used to compel such liability as a matter of precedent.
3.2 Legal Reasoning (Ratio and Method)
3.2.1 Contract-first analysis: What did the JDA and GPA actually allocate?
The Court grounded liability in the division of responsibilities under the JDA and GPA:
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JDA Clause 7.4 expressly contemplated that the developer would enter into sub-sale agreements with purchasers for the developer-constructed area,
and that the landowners “shall not be liable” for consequences of breach between developer and purchasers; the developer must indemnify the landowners.
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The Court also noted mutual indemnities (including Clause 7.1) and treated them as confirming that landowners’ exposure is tied to
title-related assurances and delays caused at their instance—not to the developer’s construction performance.
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GPA Clauses 2 and 3 authorized the developer to execute sale documentation, receive consideration, and complete registration formalities
in respect of the developer’s share. The Court read these powers as enabling conveyancing and sale transactions, not as shifting
construction-delay liability to landowners.
3.2.2 Causation and “deficiency in service”: who caused the delay?
The Court found it significant that the buyers did not claim (nor demonstrate) that delay occurred due to any act/omission of the landowners.
The deficiency in service flowed from delayed construction and possession—functions allocated to and controlled by the developer.
Therefore, imposing delay compensation on landowners would effectively convert them into guarantors of a performance they did not undertake.
3.2.3 Principal–agent argument rejected on the facts
Although a GPA can create agency in a general sense, the Court did not accept that the mere existence of a GPA
automatically makes the principal (landowners) liable for all purchaser-facing defaults of the agent (developer).
The operative question was: what was the agent authorized/obligated to do, and for whose account?
Here, the developer’s obligations toward construction and possession were its own under the development structure,
reinforced by indemnity terms insulating landowners from purchaser-contract breaches in respect of the developer’s share.
3.2.4 Split holding: no monetary liability for delay, but joint duty to convey title
The Court drew a careful line:
- Delay compensation (monetary liability for late possession) remains with the developer.
- Transfer of title and execution of sale deeds requires participation of both landowners and developer, and the NCDRC’s direction to that effect was upheld.
This reflects the practical reality of JDA structures: landowners may not build or promise timelines, but their interest in land often remains necessary to perfect title.
3.3 Impact
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Consumer claims strategy: Purchasers in JDA projects can expect courts/commissions to locate delay compensation primarily with the
party responsible for construction and delivery—typically the developer—unless the contract or facts show landowner involvement in the delay.
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Joinder of parties for conveyance: Even where landowners escape monetary liability for construction delay, they may still be necessary and bound
for execution of sale deeds and transfer of title.
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Drafting and risk allocation: The judgment underscores the importance and likely enforceability (in consumer disputes) of
clear indemnity and responsibility clauses in JDAs, especially provisions like Clause 7.4 that disclaim landowner liability for developer–purchaser breaches.
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No automatic “GPA = full liability” rule: A GPA enabling a developer to sell does not, by itself, make landowners liable for
all service deficiencies, particularly those arising from construction delay.
4. Complex Concepts Simplified
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Joint and several liability: If two parties are jointly and severally liable, the consumer can recover the whole amount from either one.
The Court refused to impose this for delay compensation on landowners because the duty breached (timely construction/possession) was the developer’s.
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Deficiency in service: In housing construction cases, delayed possession commonly constitutes deficiency.
The “service provider” for timely completion is the entity responsible for construction and delivery obligations.
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Indemnity clause: A contractual promise that one party will protect the other from losses/claims.
Here, the JDA indemnity framework supported the conclusion that purchasers’ delay-related claims should lie against the developer, not landowners.
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GPA (General Power of Attorney): A document authorizing someone to act on another’s behalf.
The Court treated this GPA as authorizing sale/registration actions for the developer’s share, not as transferring construction-delay liability to the landowners.
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Undivided share (UDS): Buyers often acquire a proportionate interest in land (UDS) along with the apartment.
Landowners’ participation can remain necessary to pass good title, even if they did not build the apartment.
5. Conclusion
The Supreme Court’s decision crystallizes a practical rule for JDA-backed developments:
landowners are not to be made jointly and severally liable for delay compensation where the JDA/GPA place construction and delivery obligations on the developer,
the delay is not attributable to landowners, and the developer indemnifies landowners against purchaser-facing breach consequences.
At the same time, the Court affirmed that landowners cannot avoid their role in conveying title—they may still be directed, alongside the developer,
to execute sale deeds and effect transfer of title to protect purchasers’ proprietary interests.