Evidence Needs to Be Provided To Cite Force Majure Clauses As Reason Of Delay: Delhi State Commission Holds Assotech Moonshine Liable For Deficiency

Brief Facts of the Case

The original allottees booked an apartment with the developer in the “Assotech Blith” project by Assotech Moonshine/Developer by paying Rs. 6,50,000. A builder-buyer agreement was executed between the original allottees and the developer. The developer later endorsed the booking in the complainants' names. The complainants paid a total of Rs. 88,62,913, as demanded by the developer. The developer then issued a demand letter for Rs. 6,75,145 without providing any construction update or the actual condition of the site/flat. The developer assured the complainants that possession of the apartment would be handed over within 42 months plus a grace period of 6 months from the execution date of the builder-buyer agreement. It was further submitted that the project was nowhere near completion or habitable, and possession could not be delivered in the near future. Aggrieved by this, the complainants approached the State Commission, alleging a deficiency in service on the part of the developer. The complainants sought relief by requesting that the developer refund the paid amount of Rs. 88,62,913, compensate for the 84-month delay in possession, and pay a pendent elite and future interest at 18% per annum. They also demanded Rs. 10,00,000 for mental agony and damages, along with Rs. 5,00,000 to cover the cost of proceedings and litigation expenses.

Contentions of the Developer

The developer submitted a written response, arguing that the project's delay was due to Force Majeure conditions. These included various directives from authorities at different times regarding water shortages and pollution control, as well as laborers and contractors abandoning the work and the impact of COVID-19.

Observations by the State Commission

The State Commission observed that the main issue to be adjudicated was whether the developer was deficient in providing services to the complainants. The commission highlighted that a developer's failure to provide a flat within the contractually stipulated period constitutes a deficiency in service. This includes faults or shortcomings in the performance promised in the contract related to housing construction services. It was further observed that the jurisdiction of the consumer forum includes directing the developer to remove the deficiency and provide compensation for delays. In this case, the complainants contended that the developer assured them possession of the apartment by a specific date but failed to do so. The commission held that the developer was deficient in service, giving false assurances regarding the project's completion and retaining the complainants' hard-earned money. Additionally, it was highlighted that the developer claimed the delay was due to Force Majeure conditions such as directives from authorities regarding water shortage and pollution control, laborers and contractors abandoning work, and COVID-19. However, the commission found no evidence supporting that any Force Majeure conditions caused the delay. The commission concluded that the developer was solely responsible for completing the construction on time, and the complainants should not suffer due to the developer's faults. Therefore, the commission dismissed the contention by the developer.

The State Commission allowed the complaint and directed the developer to refund the entire amount paid by the complainants, which is Rs. 88,62,913, along with interest at 6% per annum. Additionally, the commission ordered the developer to pay Rs. 3,00,000 for mental agony and harassment, as well as Rs. 50,000 for litigation costs.

Case Title: Mr. Sharang Jindal Vs. M/S Assotech Moonshine Urban Developers Pvt. Ltd. & Anr.

Case Number: C.C. No. 83/202