National Consumer Commission Holds MGF Developers Liable For Delay In Handing Over The Possession Of The Shop

Contentions of the Complainant

The complainant wanted to open a footwear shop for their livelihood, so they booked a shop from MGF Developers for Rs. 1,16,06,520. According to the agreement, the shop was supposed to be handed over within 36 months, and if delayed, the developer would compensate the complainants at Rs. 35 per square meter per month. Despite paying Rs. 70,86,216 as per the construction-linked schedule, they haven't received possession because the project is incomplete/abandoned. The complainants are now seeking the Commission's direction for the developer to complete the shop's construction, deliver possession, and pay Rs. 20 Lakhs for damages due to deficient service, along with a compensation of Rs. 1 Lakh for legal expenses.

Contentions of the Opposite Party

The developer argued that the delay in construction was due to a legal dispute with the Archeological Survey of India (ASI) concerning the land. The ASI claimed that the land was restricted and protected under Rule 38 of the Ancient Monuments and Archeological Sites and Remains Rules, 1959. The issue had gone through legal proceedings from the Civil Judge to the High Court, where the developer was restricted from any construction activity in that area. A subsequent appeal upheld this restriction. As the matter was still in the courts, the delay was attributed to legal circumstances, not a fault of the developer, and fell under force majeure conditions.

Observations by the Commission

The commission observed that an agreement was made, setting a specific construction period for the shop, following which the ASI issued a notice indicating legal issues related to the land for constructing the Mall, which the developer was aware of. The legal challenge to the land title wasn't communicated to the complainants. The commission referred to the judgment in Pioneer Urban Land & Infrastructure Ltd. Vs. Govind Raghavan (2019) 5 SCC 725, which ruled that one-sided agreements are evidence of unfair trade practice and are liable to be set aside.In this case, the Agreement is a one-sided document sent for execution, which lacks provisions for the complainants to withdraw under any circumstance. The commission also observed that the developer's argument about the shop being booked for commercial purposes is unsubstantiated as they did not provide any proof that the complainants were engaged in buying and selling shops, and they didn't qualify as consumers under the Consumer Protection Act of 1986.

The Commission directed the developers to refund the entire amount of Rs.70,86,216 with compensation in the form of interest @ 9% p.a. from the respective dates of deposit till the date of payment, along with litigation costs of Rs.25,000.