January 06, 2020

A developer cannot take advantage of its own negligence for delay caused in completion of construction: NCDRC

[ by Kavita Krishnan ]


The National Consumer Disputes Redressal Commission (NCDRC) ruled that a developer cannot get any advantage of its own negligence or the negligence of the contractor engaged by it.

The complaint is in respect to the residential apartment in the project of the developer – DLF Universal Limited – the developer of the large residential project namely “DLF Capital Greens” developed on the land situated at Shivaji Marg, Moti Nagar, New Delhi. The complainants are the allottees of the residential apartment who alleged that the possession of the apartment was not delivered by the developer. The complainants approached the NCDRC seeking possession of the apartment.

According to the terms of clause 11 (a) of the agreement between the developer and the allottees, the developer was to endeavour to complete construction within a period of 36 months from the date of the application unless delay was caused due to force-majeure conditions and other reasons specified in Clause 11(b) and 11(c) of the agreement.

The Director of Industrial Safety and Health (Labour Department) of Government of NCT had prohibited construction at the site of the project on 26th May 2014, on account of an unfortunate accident involving injury to a worker. The developer cited the aforesaid Prohibitory order as the reason for delaying the construction.

According to the developer the delay in handing over the possession occurred primarily due to 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 were not entitled to any compensation for the period the possession that had been delayed on account of the aforesaid factors.

Justice V.K. Jain, Presiding Member of the NCDRC held that a perusal of the prohibition letter issued by the Directorate of Industrial Safety & Health (Labour Department), Government of NCT of Delhi showed that six fatal accidents took place at the side of the project. In view of the repeated accidents in the past on the same site, the authorities held that the said site was dangerous to the safety and health of building workers.

Further, it was also noticed that despite previous directions issued by the Government and suggestion by the National Safety Council vide its Safety Audit Report, the Developer failed to take requisite safety measures for the protection of the workers. The Government was therefore constrained to stop the construction work till all the safety, health and welfare provisions were taken.

The NCDRC observed that, 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 the National Safety Council, 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 2½ years and consequently the work at the site would not have been stopped.

The developer contended that the allottees have not proved any loss or damage to them on account of the delay in offer of possession, and that there has been substantial appreciation in the value of the apartments.

The Presiding Member Justice Jain said that “I am unable to accept the contention that there has been no loss to the allottees on account of the delay in offer of possession. Had the apartments been delivered to them in time, they would have been living therein, besides having the mental satisfaction of living in their own houses. Also, it can hardly be disputed that the allottee who waits for a long time for the possession of the apartments allotted to him by a developer, despite his having made payment in time either from his own savings or by raising loans undergoes a lot of mental agony and harassment on account of the said delay and the umpteen rounds he has to make to the office of the developer just to realize the fruits of his hard-earned income. Moreover, if such terms are allowed to prevail, an unscrupulous builder would like to take advantage of such a term and delay the construction of the flat for an indefinite time, utilizing the money collected from the flat buyers for other projects or for its other purposes. Such a situation cannot be accepted by a consumer forum which is set up primarily to protect the genuine interests of the consumers.”

The NCDRC thus directed the developer – DLF Universal Limited to pay compensation to the allottees in the form of simple interest @ 7% per annum with effect from the expected date for delivery of possession till the date on which the consumer complaint by/on behalf of such an allottee was instituted.

View Full Judgement

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