Force Majeure Claims Rejected: Developer Ordered to Offer Possession and Pay Delay Compensation.
05 December 2024
Consumer Protection Act >> Consumer Rights
In a significant ruling for homebuyers, the National Consumer Disputes Redressal Commission (NCDRC) has held a developer liable for deficiency in service due to the substantial delay in handing over possession of villas to complainants. The Commission has ordered the developer to offer possession, compensate the buyers for the delay, and refrain from levying unjustified holding charges.
The complainants, a husband and wife, had taken over the allotment of a villa in the developer's "Signature Villa 2" project in Gurgaon in 2013. The original agreement stipulated possession by March 2015. However, despite paying a significant portion of the sale consideration, the complainants did not receive possession, prompting them to file a consumer complaint.
Key Issues and Arguments:
Delay in Possession: The complainants argued that the developer delayed possession without valid reasons, causing them financial loss and mental agony.
Force Majeure: The developer attributed the delay to force majeure circumstances, including pipeline alignment issues, electrical line shifting, and NGT restrictions.
Consumer Status: The developer challenged the complainants' status as "consumers," alleging they purchased the villa for investment purposes.
Arbitration Clause: The developer sought arbitration under the Arbitration and Conciliation Act, 1996.
Holding Charges: The developer demanded holding charges, which the complainants contested.
NCDRC's Ruling:
The NCDRC rejected the developer's arguments, finding them liable for deficiency in service. Key points of the ruling include:
Rejection of Force Majeure: The Commission held that the developer failed to provide sufficient evidence to substantiate the impact of the alleged force majeure events on the project.
Consumer Status Upheld: The NCDRC ruled that the complainants were "consumers" under the Consumer Protection Act, as the developer failed to prove they purchased the villa for resale.
Arbitration Clause Dismissed: The Commission affirmed that the Consumer Protection Act provides remedies in addition to other legal provisions, including arbitration.
Delay as Deficiency: The NCDRC recognized the significant delay as a deficiency in service, citing Supreme Court precedents that protect homebuyers from indefinite waiting periods.
Holding Charges Invalid: The Commission deemed the holding charges levied by the developer unjustified, as no valid offer of possession had been made.
Compensation Ordered: The developer was ordered to compensate the complainants with 6% interest per annum on the deposited amount for the delay period.
Possession Order: The developer was directed to offer possession within two weeks, along with necessary occupancy and completion certificates.
Outcome:
The NCDRC partly allowed the complaints, directing the developer to offer possession, pay compensation for the delay, and refrain from levying unjustified holding charges. This ruling reinforces the rights of homebuyers and holds developers accountable for delays in project completion.