Article: The National Consumer Disputes Redressal Commission’s Order on Force Majeure and Unfair Trade Practices
In a recent ruling, the National Consumer Disputes Redressal Commission (NCDRC), under the leadership of AVM J. Rajendra, made it clear that developers cannot hide behind the force majeure clause and retain the buyer’s money without providing service. Such an act is not only seen as a failure to provide the promised service but also as an unfair trade practice.
The case in question involved a buyer who had booked a flat from Bengal Greenfield Housing Development. The company had promised to hand over the flat within six months, with a grace period. However, the delivery was delayed by 30 months. The buyer, frustrated by the delay and lack of response to his inquiries, claimed compensation of Rs. 90,000 as per the terms of the agreement, plus interest. The developer refused, pushing the buyer to seek justice in the District Forum. Unfortunately, his complaint was dismissed due to a lack of supporting evidence. Undeterred, the buyer took his case to the State Commission, which ruled in his favor. The developer, unhappy with the ruling, filed a revision petition with the NCDRC.
The developer’s main argument was that the buyer had paid the final amount, took possession of the flat, and even gave a no-claim certificate, indicating satisfaction. The developer also invoked the force majeure clause in the General Terms and Conditions (GTC) for MIG and LIG apartments, claiming that the delay was due to circumstances beyond their control. They also argued that the complaint was invalid due to the statutory limitation period under the Act.
The NCDRC, however, saw things differently. They pointed out that the GTC provision regarding compensation for delay in possession was clear. If the developer failed to deliver within the promised timeframe, except in the case of force majeure events, they were liable to pay compensation. The commission noted that the delay was substantial and beyond reasonable expectations, even if force majeure was at play.
In making their decision, the NCDRC referred to previous cases. In one such case, Kolkata West International City Pvt. Ltd. Vs. DevasisRudra, it was ruled that it was unfair to expect the buyer to wait indefinitely for possession. This principle was reiterated in Sivarama Sarma Jonnalagadda & Anr vs. M/s Maruthi Corporation Limited & Anr, where it was again established that buyers should not be made to wait indefinitely for possession.
In conclusion, the commission upheld the state commission’s order and directed the developer to compensate the buyer Rs.72,000 for the 24-month delay in handing over the flat, with a simple interest of 6% per annum from the date of filing the complaint till final payment.
This case serves as a reminder that developers cannot hide behind force majeure clauses to avoid their responsibilities. Buyers have rights, and the law is in place to protect them from unjust practices.
