Non-compliance of statutory provisions by
builder is no excuse for delay in possession
(One cannot take advantage of one’s own wrong)
National commission while dealing with a
case titled Naresh Garg and Sons VS CHD
Developers Ltd. Consumer Case No. 1753 of 2018 Decided on 23 March 2023, Commission rejected the Developers’ contention of
non-compliance of the National Green Tribunal’s guidelines as a reason for the
delay. The bench remarked that the Opposite Party cannot be allowed to
reap benefits of his own wrongdoing of non-compliance and refused to consider
his reason as force majeure.
Case Title Naresh Garg and Sons VS CHD Developers Ltd.
CC No. 1753 of 2018, Decided on 23rd March 2023
Dr Prem Lata
Brief Facts:
The complainant, Mr. Naresh Garg, applied to the Opposite
Party, CHD Developers, for re-allotment of a unit near the Golf Course Avenue
in Gurgaon by way of an application. The flat was earlier allotted to one Sh.
Sarvesh Kumar Tiwari. The Opposite Party permitted the re-allotment, after all
the necessary formalities and payment of charges, to the complainant. An
apartment’s buyer agreement was also entered into between the parties and as
per that, the possession of the unit was to be delivered by the opposite party
within 42 months from the date of agreement. However, the Opposite Party failed
to deliver the possession within the stipulated time. Hence, the Complainant
filed this consumer complaint praying for a refund of the amount Rs. 79, 37,091/-
with an interest and damages to the extent of Rs. 5 Lakhs.
Arguments extended by Opposite Party:
·
That the complainant
would not fall under the definition of ‘consumer’ as Section 2(1)(d)(i) of the
Consumer Protection Act of 1986.for the reason the property was purchased for
investment and re-sale and falls under Commercial purpose
·
That the Complainant’s
claim is inflated to bring the complaint
within the pecuniary jurisdiction of NCDRC.
·
That the delay was
caused due to a notification by the National Green Tribunal, Delhi resulting
into stopping all construction activities by OP for a few months.
Observations of the National Commission:
·
The Opposite Party failed to place
on-record the updated status of construction &likely date of its
completion. Reliance was placed on the Supreme Court’s decision in Wg.
Cdr. Arifur Rahman Kgan and Aleya Sultana and Ors. vs DLF Southern Homes Pvt.
Ltd. & ors. (2020) 16 SCC 512, wherein it was held that 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. As per order in case
of Kolkata West international City Pvt. Ltd. vs Devasis (2020) 18
SCC 613, a buyer can be expected to wait for possession for a reasonable
period but not an indefinite period.
·
The contention of the Opposite Party
that Mr. Naresh is not a consumer was rejected as no evidence was produced to
corroborate the same.
·
Perusal of the evidence showed that
there was no blanket order of the NGT to stop construction activities. The
direction to stop construction activities was only where the construction was
being carried out in violation of the MOEF Guidelines 2010. No material was presented by the
Opposite Party to know the exact nature of ban on construction activity under
the NGT’s order and the period for which such ban was in force.
·
The bench remarked that the Opposite
Party cannot be allowed to reap benefits of his own wrongdoing of
non-compliance.
In light of the aforementioned
discussion, the Opposite Party was ordered to refund the amount given by the
Complainant along with compensation in the form of simple interest at 9% per
annum from the date of each payment till the date of refund.
Similar cases decided by Hon’ble SC
in similar matters
DLF Universal Ltd and Another Versus Capital Greens
Flat Buyers Association (SC) Civil Appeal No’s 3864-3889 of
2020
December 14, 2020
Facts:
That there was a substantial delay on the part of the Developer in
handing over possession of the apartments OP took plea of force majeure
conditions.
1.
Delay in the approval of
building plans
2.
Issuance of stop work orders in Covid
situation
3.
Exit offers were
given to the flat buyers on two occasions. When the developer became aware of
the fact that there was a delay beyond the contractual period of thirty-six
months and the purchasers were offered
4.
Refunds of the
consideration together with interest at the rate of 9% per
Annum;
5.
45% of the flat buyers in the project have
sold away their
6.
The flat buyers have the
benefit of an appreciation in the Capital value of the apartments purchased;
7.
The developer has extended the benefit of
timely payment and goodwill rebates to the flat purchasers.
Supreme Court held
·
Force majeure clause not
acceptable on both counts-non approval and direction to stop work. Non approval
should have been foreseen by builder when taking up such project. Direction to
stop construction by the state was done because of accidents taking place on
the site for safety negligence ,this was due to insufficient safety measures
and due to builders default
·
Mere offer to exit option
with interest at 9% would not disentitle the flat purchasers from claiming
compensation
In
view of the above discussions it is clear that Apex Court reiterates its stand
that Builders are to bear for the consequences for the delays caused due to
their own mismanagements and if any order by any courts are passed
subsequently, that cannot be treated as force
majeure conditions.
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