Developer Liable To Pay Compensation, Builder’s Dispute With Contractors Does Not Constitute Force Majeure: NCDRC

A single-judge bench of the National Consumer Dispute Redressal Commission (NCDRC) comprising presiding member Dr. Inderjit Singh, allowed a consumer complaint filed by the purchaser of a flat on account of an inordinate delay caused by the developer. The Developer’s contention, that the project could not be completed on time since consumers defaulted in the payments, was rejected because as an experienced developer, it was expected of him be conscious of routine delays caused by the business exigencies. Thus, the Commission reiterated that dispute with the contractors over termination does not constitute force majeure. Brief Facts: The complainant, Mr. Pankaj, booked a flat in the residential project offered by the Opposite Party on the basis that the higher managers of the Opposite Party themselves advertised the project to be very luxurious and further assured that it would be delivered in 39 months as the requisite permissions were in place. While allotting the flat, the Complainant alleged that the buyer’s agreement or the T&C were not shared or provided to the Complainant. The Complainant also paid the booking amount and some money in installment as demanded by the Opposite Party. The Complainant submitted that the Buyer’s agreement was not shown to him before the execution of the deal. Moreover, it was full of arbitrary and one-sided clause, such as in case of delay, the Opposite Party had to pay a nominal amount while the Complainant had to bear more compensation. Further, obligations were only allotted to the allottee and not the Opposite Party. The Opposite Party also delayed the delivery of the project and hence, this consumer complaint was filed. On the other hand, the Opposite Party submitted that the complaint was filed to harass them and the project was about to be completed. It was contended that the Complainant was not able to fetch the price which they anticipated at the time of the booking. Moreover, as per the Buyer’s agreement, the Complainant had already waived of his right to seek a refund. Moreover, the Complainant had many real estate properties in his name so he couldn’t be covered under the definition of ‘consumer’. The Complainant defaulted in making payments but still the Opposite Party gave some leverage. The Opposite Party also contended that earlier it had only given a tentative deadline for the completion but it got delayed because of delay in granting approvals by the State Government, stoppage on work by the National Green Tribunal (NGT) and defaults on part of the contractor and the customers who never made the payment even after multiple notices. Observations of the Commission: The NCDRC started by reiterating the ratio in Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and ors. vs DLF Southern Homes Pvt. Ltd. and ors. (2020) 16 SCC 512, that the failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within the contractually stipulated period, amounts to deficiency. The bench observed that even after 5 years from the committed date, construction wasn’t completed. The bench agreed that it was alright on the part of the Complainant to not make further payments after discovering that the construction was not taking place as per the schedule. The contention of the Opposite Party that the Complainant would not fall under the definition of ‘consumer’ was also rejected as no evidence was provided in furtherance of the same. Further reliance was placed on NBCC (India) Ltd. vs Shri Ram Trivedi (2021) 5 SCC 273, wherein the Supreme Court held that dispute with the contractors over termination does not constitute force majeure as the appellant being an experienced developer, must be conscious of routine delays caused by the business exigencies. The bench held that the Complainants cannot be made to wait for an indefinite time and suffer financially. With the aforementioned observations, the Consumer Complaint was allowed with the directions to the Opposite Party to refund the entire principal amount with @9% interest per annum. Case: Pankaj Thapliyal and anr. vs M/S Pioneer Urban Land and Infrastructure Case No.: Consumer Case No. 2895 of 2017 Counsel for the Complainant: Mr. Amit Singh Chauhan Counsel for the Opposite Party(s): N.A. Click Here To Read/Download Order

Developer Liable To Pay Compensation, Builder’s Dispute With Contractors Does Not Constitute Force Majeure: NCDRC

Smita Singh

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