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Navin Raheja vs. Shilpa Jain and Ors. - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (22 Jan 2020)

If the delay in possession is due to Force Majeure, it cannot be claimed that the Corporate Debtor defaulted in delivering the possession.



The Respondents, in the present case, had booked an apartment in a residential project. The Corporate debtor had issued a joint allotment letter and executed a Flat Buyer’s Agreement. The possession of the flat was to be provided within 36 months by 3rd August, 2015, but could not be delivered because the construction was not completed. As per the Agreement, in the event of construction not being complete, the Corporate Debtor is under obligation to pay the allottee(s) compensation @ Rs.7/- per sq. ft. of the super area per month for the entire period of such delay, to be adjusted at the time of conveying the apartment and it would be treated as a distinct charge. The ‘Corporate Debtor’ stated that the processing of its application for obtaining an Occupation Certificate was under the control of the concerned Government/ Competent Authority and any delay on account of the actions inactions and omissions on the part of the Government/ or Authority was beyond the reasonable control of the ‘Corporate Debtor’/ Promoter. In the circumstances, in terms of the Flat Buyer’s Agreement a ‘force majeure’ condition would be applicable.

The questions that arose for consideration were whether the corporate debtor could be held to have committed default where the possession was delayed due to reasons beyond the control of Corporate Debtor.

The Court observed that the Adjudicating Authority before admitting an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by allottee(s) will take into consideration the decision of the Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Limited & Anr. v. Union of India & Ors.

If the delay is not due to the ‘Corporate Debtor’ but force majeure, as noticed above, it cannot be alleged that the ‘Corporate Debtor’ defaulted in delivering the possession.


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