Of the many safeguards available in favour of builders in an agreement for sale for the construction of flats, the ‘Force Majeure’ clause is one such safeguard containing all the possible situations and circumstances that may lead to delay in completion of the construction. However,the NCDRC has held that force majeure cannot be a ground for seeking justification in delay towards completion or handing over the possession of the flats.

The Appellant-Builder had filed appeals against the order of the State Commission in 16 cases wherein it was ordered to hand over the physical possession of the flats as per the terms and conditions of the agreements, registration and execution of sale deeds as well as pay compensation and litigation costs to the aggrieved complainants therein. In the appeal, the Bench of Presiding Member Dr. SM Kantikar and Member Mr. Dinesh Singh dismissed the appeals by the Appellant-Builder stating that there was an evident failure on part of the Builder to secure the necessary permissions and to undertake proper planning, execution and completion of the housing project in question.

The Bench observed that after the expiry of the period of 24 months for handing over the possession as stipulated in the agreements, the Builder issued a letter stating an offer of either seeking refund of the amount paid with simple interest @ 9% pa or agree to the extended delay of 12-42 months. Such letter was to be answered in a short period of 10 days, which was evident of arbitrariness and highhandedness of the builder in securing its justification of delay. Speaking on the duty of the builder towards the project, the Bench observed as follows:

“57……..

We may further note that, as already stated in paras 47 and 48 above, availability of land (/acquisition of land), as well as approvals from competent authorities,as and when due, being fundamental basic requirements of a housing project, are decidedly the builder co.’s primary responsibilities, and not of the consumer,and, force majeure , unforeseeable circumstances, irrespective of its various‘liberal’ or ‘strict’ interpretations, and irrespective of its various interpretations in different sets of facts, can, but, not be nebulously and irrationally argued for anything and everything related to the builder co.’s responsibilities for completion of the project without cost or time overruns. In the given facts and position of this case, we do not find merit in the builder co.’s contention that stoppage of construction activities for about 8 months (from 19.04.2012 to 12.12.2012) due to an interim Order of Hon’ble Supreme Court in litigation apropos acquisition of land can be construed to mean ‘force majeure’.“

On answering the defence of force majeure sought by the builder towards the delay, the Bench rejected the appeal whilst awarding Rs. 1 Lakh per year from the assured date of possession to the actual date of possession, Rs. 1 Lakh towards litigation expenses and to deposit an amount of Rs. 25,000 in respect of each of the 16 cases in the Consumer Legal Aid Account of the State Commission and observed sternly:

“Non-fulfilment of its overall responsibilities of project planning, execution and completion cannot be and are not grounds for condoning or overlooking delay in completion and handing over possession.

“48.Non-fulfilment of its overall responsibilities of project planning, execution and completion cannot be and are not grounds for condoning or overlooking delay in completion and handing over possession. Force majeure, unforeseeable circumstances, irrespective of its various ‘liberal’ or ‘strict’ interpretations,and irrespective of its various interpretations in different sets of facts,can, but, not be nebulously and irrationally argued for anything and everything related to the builder co.’s responsibilities for completion of the project without cost or time overruns.

49. It is significant that the material facts and consequences relating to availability of land (/acquisition of land) and approvals from concerned authorities at the due time were not brought to the notice of the consumer at the time of entering into the buyer’s agreement. In the absence of the facts and the consequences thereof being specifically and explicitly brought to his notice, the\ buyer – consumer would reasonably (and correctly) understand that all aspects of project planning, execution and completion, inclusive of availability of land (/ acquisition of land) and\approvals from concerned authorities at the due time, are the responsibility of the builder co. and have been / are being / would be duly taken care of by the builder co., without cost or time overruns. Not bringing the material facts and consequences relating to availability of land (/acquisition of land) and approvals from the concerned authorities at the due time to the notice of the buyer – consumer while entering into its buyer’s agreement was unfair and deceptive of the builder co.[within  the meaning of section 2(1) (r) of the Act 1986].”

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