Builder to pay compensation for project delay

Shahin Mulla from Goa entered into an agreement with Utopia Projects Pvt. Ltd. on 24 February 2012 to purchase a flat paying Rs. 30 lakh in two instalments. The builder was scheduled to hand over possession on or before September 2013, with a grace period of four months. In August 2013, Shahin found that even the foundation had not been laid! She issued a legal notice to the builder. Since the notice was ignored, she complained to the Goa State Commission. Utopia Projects attributed the delay in the project to ‘force majeure’, i.e. unexpected circumstances, owing to ‘disputes with the contractor’.

The State Commission held that there was deficiency on the part of Utopia Projects and directed it to refund the complainant Rs. 30 lakh, with 5% interest from the date of payment of each instalment till the extended date of possession, i.e. 31 January 2014. In addition, a compensation of Rs. 1 lakh for mental agony (which would carry 9% interest if not paid within 30 days) and Rs. 50 per sq. ft. per month from 1 February 2014 till realisation would have to be paid. Aggrieved with the order, Utopia Projects filed an appeal before the National Commission.

The Verdict

Considering that the project had not been completed even during the grace period, the National Commission upheld the State Commission’s order on 1 April 2015. It observed that disputes with the contractor cannot be construed to be within the ambit of ‘force majure conditions’.

Point of law

A consumer who is not given possession of a house by the builder as per the committed date has the right to demand refund of the amount paid with interest and compensation.

Hotel told to refund part advance amount

Paresh Pandya, a senior citizen from Ahmedabad, booked a banquet hall at Hotel Platinum Residency on 6 April 2012 paying an advance of Rs. 51,000. The purpose was to host the wedding reception of his son on 15 February 2013. Due to unavoidable circumstances his son’s marriage was cancelled. Pandya approached the hotel’s management on 15 October 2012 in writing asking that the booking be cancelled and the booking amount be refunded.

The hotel declined saying that it would only give the refund if it received a booking for the same day. However, despite another function being held at the banquet hall on 15 February 2013, no refund was given. Meanwhile, Pandya’s son’s wedding was fixed again and he again approached the hotel for a booking. The hotel did not confirm the booking forcing Pandya to book another hall incurring additional expenses. Distressed, he contacted CERS and a complaint was filed before the Consumer Forum, Ahmedabad (Rural).

The verdict

The Forum partly allowed the complaint ordering the hotel to refund 50% of the booking amount i.e. Rs. 25,500 with 9% interest from the date of cancellation of booking till realisation. In addition, Rs. 2,000 was awarded to the complainant as compensation for mental agony and Rs. 1,000 towards litigation costs. The order had to be complied with within 30 days.

Point of law

If a customer cancels booking of a banquet hall due to unavoidable circumstances well in advance of the function he should be given at least 50% of the booking amount.



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