The Nalini Sunder rule: What you cannot plead directly, you cannot prove indirectly.

Forty-six flat buyers, one builder, and a delayed possession that cost four years

When Kaushik Narsinhbhai Patel and forty-five others booked flats in Bangalore's 'Fiesta Homes by SJR Prime' project, they expected keys by March 2014. The builder had promised that. The agreement said that. What they got instead was a four-year wait, a half-built jogging track, and a consumer forum that calculated their compensation using a formula nobody had signed.

The Supreme Court just fixed that formula. And in doing so, it delivered two lessons every advocate, CFO, and founder needs to hear: one about what happens when a builder refuses to file a written statement, and another about how courts will read your construction agreement when you try to rewrite it.

The project that went off schedule

Forty-six home buyers entered into Construction Agreements with M/s. S.J.R. Prime Corporation Private Limited on 31 March 2012. Clause 6.1 of that agreement was clear: "The possession of the Schedule 'C' apartment in Schedule 'A' Property will be delivered by the Second Party to the First Party after completion of construction as far as possible on or before the month of March year 2014 with Six months grace period additionally."

That meant possession by September 2014 at the latest.

The builder didn't deliver. The occupancy certificate came only in May 2017 — nearly four years after the contractual date. The buyers also complained about deficient construction, illegal car parking charges, excessive legal fees, and the builder's failure to build a promised jogging track and convenience store.

They filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) in New Delhi.

The builder who wouldn't show up

The builder did something unusual. It deliberately avoided accepting notice of the proceedings. When the matter reached the Supreme Court in an earlier round — Civil Appeal No. 715 of 2021 — the Court, by order dated 11 August 2021, declared the builder's right to file a written statement forfeited. The NCDRC was directed to proceed without one.

That order became the foundation for a critical question: once your right to file a written statement is gone, what exactly can you still do in the proceedings?

What the NCDRC did — and why it went wrong

The NCDRC partly allowed the complaint. It awarded delayed compensation at 6% per annum. But here's where it went off track: instead of using September 2014 as the due date for possession (as Clause 6.1 required), the NCDRC devised its own formula. It linked the due date to the date when each buyer paid the 11th instalment, plus six months.

Why? Because the buyers hadn't furnished a date-wise payment schedule. The NCDRC thought that justified a different starting point.

The buyers appealed to the Supreme Court. They wanted the due date corrected. They also wanted higher compensation, refund of car parking charges, and refund of legal fees.

The arguments: what each side said

The learned Counsel for the appellants-complainants argued that the NCDRC had no business rewriting the contractual possession date. Clause 6.1 was unambiguous. The builder's delay was four years. The compensation should run from September 2014, not from some arbitrary date tied to instalment payments.

The builder, through its counsel, tried to participate in the appeal. But here's the complication: its right to file a written statement had been forfeited. The builder filed written submissions anyway, attempting to introduce its version of events and defences.

The Supreme Court had to decide: could the builder do that?

The witness rule the Supreme Court applied

Justice C.T. Ravikumar, writing for the Bench, turned to first principles. He examined Order VI Rules 1, 2, and 7 of the Code of Civil Procedure, 1908. "Pleading shall mean the plaint or written statement," Rule 1 says. "Every pleading shall contain, and contain only, a statement in a concise form of the material facts," Rule 2 adds.

The Court then cited Nanda Dulal Pradhan & Anr. v. Dibakar Pradhan & Anr. (2022 SCC OnLine SC 822). That case held: on forfeiture of the right to file a written statement, the defendant may participate in proceedings and cross-examine witnesses — but cannot file a written statement.

The Supreme Court took it one step further. It cited Nalini Sunder v. GV Sunder for the proposition that no amount of evidence can prove a case not set up in pleadings. If you cannot file a written statement, you cannot introduce your case through written submissions either. What cannot be done directly cannot be done indirectly.

The builder's written submissions were therefore disregarded. The Court would decide the appeal on the basis of the complaint and the builder's forfeited right to plead.

THE PLAY: If your right to file a written statement is forfeited, you can still cross-examine witnesses — but you cannot file written submissions that effectively substitute for a written statement. The rule is simple: what you cannot do directly, you cannot do indirectly.

The due date that couldn't be moved

On the compensation question, the Court applied R.V. Prasannakumaar & Ors. v. Mantri Castles Private Limited & Anr. (2020) 14 SCC 769. That case established two principles: first, the due date for possession must be fixed with reference to the flat purchase agreement. Second, compensation in the shape of interest at 6% per annum from the due date till the offer of possession is just and reasonable — even if the agreement stipulates a different rate.

The NCDRC had deviated from the agreement because the buyers didn't provide a date-wise payment schedule. The Supreme Court held that was no reason at all. A construction-linked payment plan obligates the builder to complete construction to a particular level at a given time. The buyer pays the instalment upon such accomplishment. Delay in construction cannot be a reason for denying compensation or shifting the due date.

The Court modified the NCDRC's formula. The due date for possession was fixed as September 2014 — per Clause 6.1. The builder would pay interest at 6% per annum from that date till the date of offer of possession to each respective buyer.

What the Court didn't change

The Supreme Court left several findings undisturbed. The rejection of the car parking fee refund claim was upheld. The rejection of the legal fee refund claim was upheld. The direction to construct the Green Jogging Track and Convenience Store was maintained.

The Court directed the NCDRC to verify the date of offer of possession for each flat purchaser in execution proceedings. That's a practical detail: not every buyer may have received possession on the same date, and the compensation period will vary accordingly.

Why this matters in practice

For advocates handling consumer cases against builders, this judgment offers two sharp tools.

First, the forfeiture point. If a builder deliberately avoids accepting notice and loses the right to file a written statement, that builder cannot later file written submissions to introduce its case. The Supreme Court has now made that explicit. This is a powerful weapon for complainants: the builder's defences are shut out, and the forum decides on the complaint alone.

Second, the due date point. Consumer forums cannot rewrite contractual possession dates just because the buyer hasn't provided a payment schedule. The agreement is the agreement. If Clause 6.1 says September 2014, that's the date. The NCDRC's attempt to link the due date to instalment payments was a creative but incorrect solution. The Supreme Court has now corrected it.

For CFOs and founders in real estate: read your construction agreements carefully. The possession date you promise is the date the court will use. If you delay, you pay interest from that date — not from some later date you might prefer. And if you try to avoid the proceedings, you may lose the right to even tell your side of the story.

The bottom line

The Supreme Court has made it clear: when a builder forfeits the right to file a written statement, it cannot introduce its case through written submissions; and when a construction agreement specifies a possession date, that date governs compensation — not a formula invented by the forum.