Developer cannot claim force majeure for construction delays caused by safety violations and fatal accidents

SC rejected developer's force majeure defense for substantial delay in apartment possession handover. Court found delays resulted from fatal accidents at construction site due to developer's failure to follow safety instructions, not external circumstances. While contractual compensation rate of Rs. 10 per square foot per month was deemed insufficient given Delhi's real estate market conditions, SC reduced compensation from 7% to 6% considering all circumstances. Developer must pay enhanced compensation to flat buyers with adjustment for any amounts already paid under contractual rate. Appeal partially allowed.

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Issues:
- Force majeure defense raised by the developer
- Compensation for delay in handing over possession
- Refund of parking and club charges
- Evaluation of contractual compensation rate
- Distinction in compensation rates between cases
- Judicial guidance on compensation for delay
- Specific directions issued by the NCDRC
- Modifications made by the Supreme Court in the judgment

Force Majeure Defense:
The developer contended that force majeure conditions, such as delays in building plan approvals and stop work orders due to fatal accidents, hindered timely project completion. However, the NCDRC rejected this defense after evaluating the circumstances, emphasizing that delays in building plan approvals were common in construction projects and that stop work orders were a result of safety failures by the developer. The Supreme Court found no merit in the force majeure defense, upholding the NCDRC's decision.

Compensation for Delay:
Regarding compensation for delay, the NCDRC directed the developer to pay simple interest at 7% per annum for the delayed possession of flats. The Supreme Court, guided by established principles, reduced the compensation rate to 6% per annum due to the substantial delay experienced by flat buyers. The Court emphasized that genuine flat buyers seeking a home should not be deprived of compensation, even if exit options with interest were offered, as possession remains a priority for them.

Refund of Parking and Club Charges:
The NCDRC had directed the refund of parking and club charges with interest, but the Supreme Court set aside this direction in line with a previous judgment related to a different project by the same developer. The Court clarified that the refund of these charges would not be applicable based on the specific circumstances and legal precedents.

Evaluation of Contractual Compensation Rate:
A comparison was drawn between the contractual compensation rates in different cases, with the Supreme Court considering the distinct real estate market conditions in Delhi and Bengaluru. The Court adjusted the compensation rate to 6% per annum, taking into account the higher contractual rate of Rs. 10 per square foot in the present case.

Judicial Guidance on Compensation for Delay:
The judgment emphasized that compensation for delay should be fair and adequate, considering the specific circumstances of each case. The Court highlighted the importance of providing just recompense to genuine flat buyers facing project delays, irrespective of exit offers made by the developer.

Specific Directions by NCDRC and Modifications by Supreme Court:
The NCDRC had issued specific directions, including entitlement to additional demands, early payment rebates, and execution of conveyance deeds. The Supreme Court partially allowed the appeals by modifying the compensation rate for delay and setting aside the refund of parking and club charges. The Court upheld the NCDRC's directions with the mentioned modifications, emphasizing compliance within a specified timeframe.

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