Consumer VOICE

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Builders Can’t Give Excuse Of Approvals, Delay Flats On The Ground Of Force Majeure

The apex consumer commission has ordered that a builder can't hide behind the excuses of not getting approvals from authorities, hurdles in land acquisition or any other difficulty, for delay in delivery of flats to home buyers. The National Commission, in its recent order dated 12th December 2018 has come down heavily on the builders, DLF Homes Panchkula Pvt. Ltd wherein it said that delay caused in handing over possession of flat due to delay in obtaining the necessary approvals from the concerned authorities cannot be considered as force majeure. The bench said that availability of land and approvals from competent authorities are fundamental requirements of a housing project and the responsibility of builder and non-fulfillment of its overall responsibilities of project planning, execution and completion are not grounds for condoning or overlooking delay in completion and handing over possession of residential units.
 
A bench of Dr SM Kantikar and Dinesh Sharma said so while directing DLF Homes Panchkula Private Limited to pay compensation of Rs. 1 lakh to the homebuyers besides Rs. 1 lakh as cost of litigation and Rs 25,000 to be deposited in the Consumer Legal Aid Account of the State Commission, within four weeks on account of unfair trade practice in each of the 16 cases before the Commission.
 
In the instant case, one flat buyer, Mr. D. S. Dhanda had filed a consumer complaint before the State Commission seeking possession of the flat allotted to him by DLF. It was his case that he booked a flat in the project known as "DLF Valley" being developed by DLF.  In terms of the Agreement, possession of the flat was to be handed over to Mr. Dhanda within 24 months from the date of execution of the Agreement. It was also agreed that in case of delay in delivery of possession of the said unit, DLF shall pay a sum of Rs.10/- per square feet, per month to the flat buyer, Mr. Dhanda.
 
In April 2012, the Hon'ble Supreme Court had stayed all construction activities of DLF with respect to the said project. The said stay came to be vacated by the Hon'ble Supreme Court by its Order dated 12th December 2012. Pursuant to the same, DLF had sought the consent of the flat buyers to get an extension of time of one year to handover possession of their respective flats. Despite such extension, DLF failed to deliver possession of the flat booked.
 
The National Commission observed the case and found that DLF was responsible for deficiency of services and unfair trade practice. Despite the fact that State Commission had exempted/deducted a period of 12 months in granting compensation to the flat buyer, National Commission held otherwise. It ruled that stoppage of construction activities due to an interim Order of Hon'ble Supreme Court in litigation apropos acquisition of land cannot be construed to mean 'force majeure'.

Further National Commission said that the material facts and consequences relating to availability of land (acquisition of land) and approvals from concerned authorities 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 the notice of the buyer, he would reasonably (and correctly) understand that all aspects of project planning, execution and completion, inclusive of availability of land would be duly taken care of by the builder without any additional cost or time.
 
The Commission interpreted the conduct of DLF as unfair and deceptive for not bringing material facts and consequences to the notice of the consumer/flat buyer relating to availability/acquisition of land and approvals from the concerned authorities at the time of entering into an agreement.
 
The ruling laid down by NCDRC makes it evidently clear that the service providers; builder/promoter in the present case, must provide complete disclosures to the consumers while entering into any understanding with them. National Commission emphasized on the fact that delay in delivery of possession of the units due to delay in obtaining the necessary approvals and sanctions is not a ground under force majeure clause which can afford any concession to the builder/promoter.
 
By Ankur Saha
 
Legal Head, Consumer VOICE

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