Project brochures cannot be dismissed as mere ‘marketing material’, says SC; ‘developers must deliver as promised’

The observation came as the court took a stern view of the continuing deviations at DLF Home Developers’ The Primus residential project in Gurugram.

The Supreme Court has warned the real estate industry that promises made in project brochures cannot be dismissed as mere marketing material, holding that a developer must construct and deliver a project in strict conformity with the representations made to prospective homebuyers.

The observation came as the court took a stern view of the continuing deviations at DLF Home Developers’ The Primus residential project in Gurugram, where a 24-metre-wide road shown in the original project plan has effectively disappeared at substantial stretches, with portions being converted into a green patch or used for parking.

A bench of justices Ahsanuddin Amanullah and R Mahadevan said the deviation was “not minor, but substantial” and warned that if the project was not brought into conformity with the brochure by the next hearing, it would “proceed to pass appropriate orders”.

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The court also expressed displeasure with the Haryana government and its officials over their handling of the land required for the road and their failure to take effective steps to resolve impediments to elections for the residents’ welfare association.

HT contacted DLF Home Developers for a response but did not receive one till the time of going to print.

The latest order, released earlier this week, followed a status report submitted by the Central Bureau of Investigation (CBI), which had been directed by the Supreme Court to conduct a preliminary fact-finding exercise into the 24-metre-wide road and other complaints relating to compliance and alleged irregularities.

The CBI report, based on maps, photographs and other material, left “no manner of doubt”, the bench said, that the road did not exist within the project in the manner represented in the original plan and brochure.

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Of the 147-metre stretch earmarked for the road, around 52 metres has been developed as a green patch. Another substantial portion, which appears to retain the structure of a road, is being used for parking by residents and visitors. As a result, roughly 100 metres – almost two-thirds of the entire stretch – was either a green patch of being used for parking, the court noted.

“We are at a loss to understand why, despite repeated opportunities having been granted to ensure that the project is brought into conformity with what was represented in the brochure, the aforesaid deviation has not yet been rectified,” the bench said.

The top court made it clear that its concern went beyond the road itself. It reiterated that from the beginning of the proceedings it had been emphasising that the project sold to consumers had to be delivered and constructed “strictly in accordance with the representations made in the brochure/plan provided by DLF to the prospective buyers/consumers”.

It directed the CBI director to assign two additional inspectors to assist superintendent of police Saurabh Gupta, who is conducting the preliminary inquiry, and adjourned the matter to October 12 to await the agency’s final report. It also clarified that CBI must conduct the inquiry objectively and independently and should not be influenced by observations made during the court proceedings.

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The proceedings before the Supreme Court are an offshoot of a consumer dispute concerning The Primus, a residential project in Sector 82A, Gurugram, which DLF began marketing around 2012 as a premium housing complex. The project was advertised with, among other facilities, two 24-metre-wide access roads, banquet facilities, tennis courts and swimming pools. Homebuyers who purchased apartments while the project was under construction subsequently complained that the reality on the ground was markedly different from what had been represented to them.

The dispute initially came before the National Consumer Disputes Redressal Commission (NCDRC), following complaints by five allottees. The consumer body passed its judgment on May 29, 2023, following which both the homebuyers and DLF Home Developers approached the Supreme Court.

The buyers alleged, among other things, that the project was effectively landlocked, with agricultural land surrounding it, and that basic infrastructure and permanent utilities had not been provided as promised. They also questioned how a partial occupation certificate had been obtained despite the alleged absence of proper roads, water and electricity infrastructure.