NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
R.K. Agrawal, President
Veena Gupta – Complainant
versus
DLF Universal Limited and Anr. – Opp. Parties
Consumer Case No.786 of 2018
Decided on 4.10.2021

IMPORTANT POINTS
(1) Force Majeure cannot be claimed as defense when builder is at fault
(2) Flats should not be allotted unless requisite permits availed from municipal corporation
(3) Unjust agreement cannot be upheld.

Headnote:

(A) Consumer Protection Act, 1986 – Section 21(a)(i)[Section 58(1)(a) –Consumer Protection Act, 2019] – Complaint before NCDRC in matters exceeding valuation of Rs. 1 Crore – Complainant booked flat in Opp. Party’s flat scheme – Flat was promised to be delivered in 36 months – Construction delayed due to stay on construction – Flat area changed by developer – OP asking for extra payment despite delay and change in construction – Possession not granted – Complaint filed before NCDRC for deficiency in service and unfair trade practice

(B) Consumer Protection Act, 1986 – Section 2(1)(r) – Unfair Trade Practice[Section 47(i) –Consumer Protection Act, 2019] – Flat agreement providing meager compensation for delay in providing possession and imposing huge cost for delay in paying installments held unjust and one-sided

(C) Consumer Protection Act, 1986 – Section 2(1)(g) - Deficiency in Service[Section 34 –Consumer Protection Act, 2019]– NCDRC decided that OP was within its rights to alter the flat area as per the initial agreement – Force Majeure defense claimed for delay in construction is an invalid defense - Onus on OP to get to requisite permits before offering flats – Onus also on OP to ensure proper working conditions for laborers whose death resulted in the stay on construction – Agreement declared one-sided and unjust promising just Rs. 10/sq. feet as compensation – NCDRC awarded possession within three months along with 7 percent simple interest calculated from the day of promised possession and Rs. 50,000 as damages

Held: On merits, it is pleaded that the Complainant was neither forced nor was influenced by the Developer to purchase the said Apartment and the Agreement was voluntarily and willing signed by her. It is a trite law that the terms of Agreement are binding between the parties. As per Clause 1.5 of the Agreement, the approval for the Layout Plan and Building were tentative and it was informed to the Complainant at the time of signing the Agreement. The Project has been delayed due to Force Majeure reasons which have been defined in Clause 11 of the Agreement. The delay, if any, in completion of Project was due to delay in grant of necessary approvals by the Competent Authorities and the Developer cannot be made liable for the delayed acts of the Competent Authorities. Further, a Prohibitory Order was issued by the Delhi Government’s Labour Department due to an unfortunate incident and the Construction Work was stopped on the site. The Complainant has been duly informed about the status of the construction work from time to time. The Complainant was also granted rebate for early payment and as a Goodwill gesture she was also offered additional discount @5.5.% or 4.5% in the event of balance due is paid within the period and subject to the conditions of Goodwill Package. Complainant was made an offer to exist and she was entitled for refund with interest @9% p.a. but she did not exercise the said offer. Despite all the hindrances/problems and issues faced during the construction of the Project, the Occupation Certificate was received on 05.04.2017 and the possession of the Apartment was offered to the Complainant on 28.06.2017. The Occupation Certificate received by the Opposite Party was phase-wise and not specific to individual Towers. The Occupation Certificate has been received for Phase III of the Project on 05.04.2017 wherein Tower Y is located. The Developer has not applied separately for Occupation Certificate for Tower Y. The Complainant has failed to complete the formalities as conveyed vide letter dated 28.06.2017 and has not taken possession of the said Apartment. A reminder was also sent to her on 05.07.2018 but she did not remit the outstanding payment as demanded vide letter dated 28.06.2017 and take the possession. It is further denied that there was increase in the Super Area without any increase in the Carpet Area. The increase in the Super Area was due to increase in common area and in compliance of directions of the Competent Authorities. The Clause 14 (i) of the Application Form and Clauses 1.5, 1.7 and 10 of the Agreement clearly stipulated that the Super Area is tentative and subject to change. The Complainant has also failed to strictly adhere to the payment schedule and has defaulted in payment of instalments due on 29.06.13, 31.03.2014 and 12.03.2016. The delayed interest charged on the Complainant is totally in terms of Agreement. It is specifically pleaded that the Complainant is not entitled for any compensation as the delay in completion of the Project was due to Force Majeure reasons.

In brief, it is the case of the Complainant that he had paid about 95% of the total sales consideration of the allotted Apartment No. Y011, Ist Floor, Unit No.1 situated at 15, Shivaji Marg, New Delhi to the Developer. As per Clause 11(a) of the Agreement, the possession of the Apartment was to be delivered to the Complainant within 36 months from the date of booking Application dated 30.11.2010 that means by 29thNovember, 2013. However, the Developer has miserably failed to hand over the possession within the stipulated time and hence she is entitled for reasonable compensation.

Admittedly the possession of the apartments has been considerably delayed. According to the developer the delay happened primarily on account of the abnormal time taken in approval of the building plans and the order issued by the Government of NCT of Delhi, prohibiting construction for a considerable time. The said circumstance, according to the developer was beyond its control therefore, the allottees are not entitled to any compensation for the period the possession has been delayed on account of the aforesaid factors. It is an admitted position that the building plans had not been approved at the time allotments were made in this project. The submission of the complainants is that the allotment of the flats without obtaining all the requisite approvals was by in itself a unfair trade practice and in any case, being an experienced developer, the OP knew, at the time the allotments were made that the concerned authorities would take their own time for grant of the requisite approvals. In the submission of the allottess, the time taken by the concerned authorities in sanction of the building plans cannot be a force majeure circumstance, since it was very much in the contemplation of the developer at the time the allotments were made. The learned counsel for the developer, on the other hand, submitted that though the time ordinarily taken for grant of such approvals may have been factored in by the developer while stipulating the expected date for delivery of possession, the time actually taken in this particular project was much more than the time usually taken for such approvals. There is no material before this Commission to find out how much was the time usually taken for grant of approvals in such a large project. No data in this regard has been placed before the Commission. More importantly, the correspondence exchanged between the developer and the concerned authorities has not been placed on record to prove that the delay occurred solely on the part of the concerned authorities and cannot be attributed to any defect or deficiency on the part of the developer in preparation and submission of the building plans etc. Though, the allottees were given an option to exit from the project with 9% interest, they were not bound to accept the said exit option they having booked the apartment for the purpose of having a roof over their head and not for the purpose of earning interest on the amount paid to the developer.

In any case no force majeure circumstance has been sought on account of the delay in sanction of the building plans, in the force majeure chart submitted by the developer.

A perusal of the prohibition letter dated 26.5.2014 issued by the Directorate of Industrial Safety & Health (Labour Department), Government of NCT of Delhi would show that there have been as many as six fatal accidents at the side of this project. One death each of the workers took place on 04.9.2011, 11.4.2012, 16.8.2012, 28.2.2013, 16.1.2014 and 17.5.2014. The work at the site was not stopped by the Government despite loss of five lives prior to 17.5.2014. After a fatal accident on 17.5.2014, an inspection was carried out and it was revealed that a worker had slipped while applying paint on tower No.14 and had later died. It was in view of the repeated accidents in the past on the same site, that the authorities held that the said site was dangerous to the safety and health of building workers. It was also noticed that despite previous directions issued by the Government and suggestion given by the National Safety Council vide its Safety Audit Report on 3.4.2014, the requisite measures for safety of the workers had not been taken. The Government was therefore constrained to stop the construction work till all the safety, health and welfare provisions were taken. Had the developer or the contractor engaged by it taken the requisite measures and complied with the directions issued by the Authorities and implemented the suggestions given by National Safety Council, the unfortunate incident of 17.5.2014, resulting in loss of sixth human lives at the same project would not have happened and consequently the work at this site would not have been stopped. Though, it was submitted on behalf of the developer that they had engaged a reputed company L&T to construct the buildings and the said contractor had taken all the requisite safety measures, no material has been placed before this Commission to prove that the safety measures taken by the contractor were adequate and in conformity with the rules. Had all the requisite safety precautions been taken as many as six incidents at the same site resulting in loss of six precious human lives would not have happened in a span of 2 ½ years. Therefore, the developer, in my opinion cannot get any advantage on account of the aforesaid prohibitory order dated 26.5.2014 by taking advantage of its own negligence or the negligence of the contractor engaged by it. In any case, the compensation which the developer will have to pay to the allottees can always be claimed by it from the contractor to the extent it relates to the period the work was prohibited by the Government on account of the above referred fatal accidents.

For the reasons stated hereinabove, I hold that the OP has failed to establish any force majeure circumstance for the delay in offering possession of the allotted flats to the concerned allottees.”

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Compensation The next question which arises for consideration is the quantum of the compensation to which the allottees are entitled on account of the delay in offer of possession made to them. Though, the submission of the learned counsel for the developer was that the allottees are entitled to compensation only @ Rs.10/- per sq. ft. of the super area per month as per the agreements executed between the parties, Such one-sided agreements have consistently been held to be unfair not only by this Commission but also by the Hon’ble Supreme Court. A reference in this regard can be made to the decision of the Hon’ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan (2019) 5 SCC 725

Result: Complainant awarded damages, simple interest @6% and possession.