Sand paucity can’t just delay handing over flats
Builders come up with excuses to justify delay. Would shortage or non-availability of material in a particular region be a valid excuse for delay? No, as recently ruled by the National Commission. Case Study: Vrajendra Jogjivandas Thakker, an HUF, had booked a residential flat with CCI Projects P
Published -
Feb 6, 2018 7:11 AM
Builders come up with excuses to justify delay. Would shortage or non-availability of material in a particular region be a valid excuse for delay? No, as recently ruled by the National Commission. Case Study: Vrajendra Jogjivandas Thakker, an HUF, had booked a residential flat with CCI Projects Pvt Ltd, in its project called White Spring Building at Borivli. According to the agreement dated October 30, 2012, the total consideration payable was Rs 90.39 lakh. It was also agreed that possession was to be handed over by August 2014, but this period would automatically stand extended in the event of certain contingencies. Out of the total consideration, 95% amounting to Rs 85.87 lakh was paid, but possession was not given. In 2016, Thakker filed a complaint before the National Commission, seeking possession of the flat along with compensation, or its current market value of Rs.2 crore. The builder contested the case, stating that construction was delayed on account of changes in the development control regulations and government restriction on procurement of sand. The company claimed that it had even offered to refund the entire amount along with 9% interest, which Thakker had declined to accept. During the pendency of the case, the builder offered possession. Thakker was directed to deposit the remaining 5% with the Commission which would be invested in fixed deposit, and the builder was ordered to hand over possession. The question now remained as to whether Thakker was entitled to claim compensation for the delay, or the builder was entitled to extension of time. The builder, meanwhile, claimed interest for the delay in payment. The Commission found that the builder was unable to point out even a single instance when Thakker had delayed payment. Even the final instalment payable on possession had been deposited with the Commission. Hence it was held that the builder was not entitled to claim interest. As regards delay, the Commission found that the change in the Development Control Regulations was prior to the issuance of the commencement certificate, and had no bearing on the delay. As regards embargo on procurement of sand in Maharashtra, the Commission observed that no evidence was produced to substantiate it. However, this would not be an excuse for delay, as the builder could have procured sand from alternative sources from other places. The Commission concluded that an embargo on mining cannot justify delay in possession of the flat in accordance with the terms of the agreement. Accordingly, by its order of January 23, 2018, delivered by Justice V K Jain, the National Commission held that Thakker was entitled to interest for the period of delay. On the amount of Rs 85.87 lakh, which had been paid prior to the filing of the complaint, the builder was ordered to pay interest at 8% per annum for the period of delay. Out of the amount deposited in the Commission, the principal amount was ordered to be paid to the builder and the interest to Thakker. In addition, Rs.25,000 was paid as litigation costs. Conclusion: Shortage or unavailability of sand or other material in a particular place cannot be a ground to justify delay as the construction material could be sourced from other places.
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