Can I challenge one-sided clauses in a builder-buyer agreement?

Question

My builder-buyer agreement has heavy penalty clauses for my delay in payment but almost no penalty on the builder for delayed possession. Can such one-sided terms be challenged? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

Can I challenge one-sided clauses in a builder-buyer agreement? is governed in India primarily by Real Estate (Regulation and Development) Act 2016, Section 13, Consumer Protection Act 2019, Section 2(46) and Indian Contract Act 1872, Section 23. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 13 of RERA prohibits a promoter from accepting more than ten percent of the cost as advance without first entering into a written, registered agreement for sale, and the model agreement prescribed under most state rules is meant to ensure reciprocal obligations.

The Supreme Court has held in Pioneer Urban Land and Infrastructure v. Govindan Raghavan that one-sided clauses imposing heavy interest on the buyer's delay while giving the builder a token or no penalty for its own delay constitute an unfair trade practice and are not binding.

Section 2(46) of the Consumer Protection Act 2019 defines unfair contracts, including terms that impose a disproportionate penalty for breach on the consumer compared to the impact caused to the other party, allowing a consumer commission to strike them down.

Under Section 23 of the Indian Contract Act, an agreement whose object or the consideration is opposed to public policy is void, and courts have applied this to unconscionable builder-buyer clauses that defeat the reciprocity RERA intends.

An allottee can raise the unfairness of specific clauses either as a defence when the builder invokes them or proactively before the RERA Authority or a consumer commission seeking a declaration that such clauses are void and unenforceable.

What to do next: 1) Highlight the specific one-sided clauses and compare the buyer's versus the builder's penalty and interest rates; 2) Cite the Pioneer Urban judgment and the unfair contract provisions when disputing enforcement of such clauses; 3) File a complaint before the RERA Authority or the appropriate consumer commission challenging the clause; 4) Do not sign amendments that further tilt obligations in the builder's favour without legal review.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Real Estate (Regulation and Development) Act 2016, Section 13 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.