NCDRC Directs Builder To Pay Compensation For Delay In Delivery Of Possession Of Flats

A bench of NCDRC (National Consumer Disputes Redressal Commission) comprised of Justice Ram Surat Ram Mauraya, (Presiding member) and Dr. Inder Jit Singh, has rejected the builder’s argument of ‘Force Majeure’ and awarded compensation to the flat buyer for delay in giving possession. The legal term ‘Force Majeure’( Act of GOD ) is a condition which absolves the liability of the party to the contract in case of any unforeseeable circumstances A flat in the project of a company called Clarion Properties Ltd, known as ‘The Legend’, in Sector 57, Gurgaon was allotted to complainants. According to the agreement between the builder and flat buyer, the committed date of completion of the flat was 36 months from the date of start of construction of the tower in which the flat is located or from the date of execution of the agreement, whichever is later, subject to force majeure circumstances and on receipt of all payments punctually as per agreed terms. The unit was booked under construction linked plan with total consideration of Rs.55,41,184/-, with total basic price of Rs.53,38,164/- and in addition maintenance security Rs.1,48,200/- (@ Rs.50/- per sq.ft.), contingency deposit Rs.14,800/- (@Rs.5/- per sq.ft.), club charges for community facility @ Rs.40,000/-. Further, electric connection charges were to be paid as billed’. The Registration/Stamp Duty charges, service tax or any other taxes were ‘as may be applicable’ .The flat buyer argued that the total consideration for the unit, including IFMS Security, Club Membership and contingency final charges was Rs.55,41,184/-, but complainants were forced by the company, under threat of cancellation of allotment, to pay more, a total consideration of Rs.72,25,417/-, including stamp duty and registration. Also by levying unconscionable, unsubstantiated and illegal charges in the name of electricity connection charges and other charges. It was contended that there was a delay of handing over of the apartment by more than a year. The company did not provide the facilities and features that it promised in its brochure, website and shown in the ‘sample flat’, It was further contented that the builder has used the brochure to mislead the buyers and later the company was taking the defence that brochure was not part of the agreement, which amounts to unfair trade practice within the meaning of the consumer protection Act. The defendant company/builder raised objections and denied most of the allegations in the complaint. It was argued that the NCDRC lacks pecuniary jurisdiction, the complaint is barred by limitation, bad for non-joinder of necessary parties, and also that the NCDRC should not hear the complaint as it involves complicated questions of law, which can be tried by an ordinary civil court. After hearing both the sides the commission held that the argument that it lacks pecuniary jurisdiction is not valid. Under Section 21 of the Act, Commission has the jurisdiction where value of goods and services and compensation, if any, claimed exceeds Rupees one crore. The objection that the Complaint is barred by limitation was also not accepted. The defendants have failed to deliver the possession of the flat to the complainant till date and therefore, the cause of action was continuing. It was found that there was no documentary evidence to support the contention of the opposite parties on the issue of ‘Force Majeure’. The failure of the developer to comply with contractual obligations to provide flats within contractually stipulated period would amount to deficiency in service and therefore, amenable to the jurisdiction of consumer fora. The commission ordered that the respondent parties should pay delay compensation in the form of simple interest @ 6% per annum on the amount paid by the complainants from the committed date of possession till the date of offer of possession. It was further directed that within 30 days of the order, the builder/ opposite party should publish the details of the order on their website and also inform all the allotees. Case- Anil Rawat & Anr. vs Clarion Properties Limited & 2 Ors. Bench- Justice Ram Surat Ram Mauraya, Presiding member and Dr. Inder Jit Singh, Member Click Here To Read/Download Order

NCDRC Directs Builder To Pay Compensation For Delay In Delivery Of Possession Of Flats

Aiman J. Chishti

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