NCDRC Reiterates That Allottees Can Not Be Forced To Accept One-Sided Terms In An Agreement With The Developer 

Posted On - 9 May, 2023 • By - Ajay Lulla

The National Consumer Disputes Redressal Commission (NCDRC) has reiterated that remedies under the Consumer Protection Act, 1986 are in addition to remedies under other statutes. The NCDRC made this observation while adjudicating a consumer complaint against RISE developers in Gurgaon, Haryana. The complainant, Mr. Sunil, had booked a flat in a residential project launched by RISE, but the developer failed to hand over possession of the flat within the stipulated time, even after receiving 95% of the total cost. The complainant sought a refund with interest. 

The Respondent contended that they had received an extension for the completion and development of the project up to December 2023 from the Real Estate Regulatory Authority (RERA). They further claimed that the delay in handing over the possession of the apartment was due to force majeure and unforeseeable circumstances beyond their control, including a court order stopping the use of groundwater and the Covid-19 pandemic. 

The NCDRC relied on a Supreme Court judgment in Pioneer Urban Land and Infrastructure Ltd. vs Govindan Raghavan1, wherein it was held that a term of a contract would not be final and binding if the flat purchaser had no option but to sign on the dotted line on a contract framed by the builder. Incorporation of one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986. The commission observed that the complainant could not be forced to accept the terms of the agreement. 

The NCDRC held that there was an inordinate delay in handing over possession of the flat by the respondent, and the complainant could not be made to wait indefinitely and suffer financially. The commission ordered the Respondent to refund the entire principal amount to the complainant along with compensation in the form of simple interest at 8% per annum, instead of 12% as the market conditions warranted. 

This order highlights the importance of consumer protection laws and their remedies. It also emphasizes the need for transparency and fairness in agreements between consumers and developers. Consumers should not be forced to sign agreements with one-sided clauses or be made to suffer financial losses due to the failure of developers to fulfil their obligations. The ruling also recognizes the impact of force majeure events and unforeseeable circumstances on the construction industry but emphasizes that they cannot be used as an excuse for unfair practices by developers. 

In conclusion, the NCDRC’s ruling in this case serves as a reminder to developers to ensure that they adhere to their obligations and responsibilities towards consumers. They must also ensure that the agreements they offer are fair, transparent, and legally binding. For consumers, this ruling affirms their right to seek redress under the Consumer Protection Act, 1986 and emphasizes the importance of understanding the terms and conditions of agreements before signing them”.