Full Judgment Text
$~1 and 2 (Appellate)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM(M) 523/2022 and CM APPL. 26549/2022 (stay)
SHREE VARDHMAN INFRAHOME
PRIVATE LIMITED ..... Petitioner
Through: Mr. Shalabh Singhal, Adv.
versus
KUSHAL VERMA & ANR. ..... Respondents
Through: Mr. Chatur Singh, Adv. with
Respondent Mr. Amit Agarwal
Ms. Bihu Sharma and Mr. Akshay C.
Shrivastava, Advs. for the applicant/SBI
+ CM(M) 536/2022 and CM APPL. 26605/2022
SHREE VARDHMAN INFRAHOME
PRIVATE LIMITED ..... Petitioner
Through: Mr. Shalabh Singhal, Adv.
versus
AMIT AGGARWAL & ANR. ..... Respondents
Through: Mr. Chatur Singh, Adv. with
Respondent Mr. Amit Agarwal
Ms. Bihu Sharma and Mr. Akshay C.
Shrivastava, Advs. for the applicant/SBI
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
JUDGMENT (ORAL)
% 07.07.2022
1. These petitions, under Article 227 of the Constitution of India,
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assail order dated 25 April, 2022, passed by the learned National
Consumer Disputes Redressal Commission (“the learned NCDRC”) in
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Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:12.07.2022
16:47:29
a batch of execution applications, seeking execution of the order dated
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15 January, 2019, passed by the learned NCRDC in Consumer Case
no. 1893/2017 ( Flora Welfare Association Vs. Shree Vardhman
Infrahome Pvt. Ltd ).
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2. The order dated 15 January, 2019 reads thus:
“Dated: 15 Jan 2019
ORDER
The matter has been settled between the parties. The
learned counsel for the complainant, on instructions from Mr.
Sangeet Bali, President of the complainant association who is
present in the Court, seeks disposal of the complaint in terms
of the written settlement dated 15.01.2019 which is annexed
to the application IA No.894 of 2019 filed today in the Court
for recording the settlement. The complaint is accordingly
disposed of in terms of the settlement dated 15.01.2019 which
shall form part of this order. It is also made clear that in case
the OP offers to pay the balance payable in kind, such as
through additional parking, additional power back-up etc. as
per clause 4 and para 2 of the settlement, which shall be for
the discretion of the concerned allottees whether to accept
such balance in kind such as additional parking, additional
power back-up etc. or not. In the event they are not agreeable
to accept the said balance in kind, the OP shall pay the
balance to them by way of Demand Drafts/bank transfers etc.
It has also been agreed between the parties and is ordered
accordingly that the aforesaid settlement would not be treated
as a binding precedent.”
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3. The settlement agreement dated 15 January, 2019, in terms of
which the learned NCDRC had, vide the afore-extracted order dated
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15 January 2019, disposed of Consumer Case 1893/2017, required
the petitioner to, inter alia , handover possession of the completed
flats/units to the members of Flora Welfare Association, the
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complainant in Consumer Case 1893/2017, on or before 31
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By:SUNIL SINGH NEGI
Signing Date:12.07.2022
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December, 2019, to apply with the concerned authorities for obtaining
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occupancy certificate in respect of the units on or before 31 March,
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2020, and to obtain the occupancy certificate on or before 31 August,
2020.
4. The settlement agreement also incorporated the following
clause:
“(d) It is agreed and understood that the terms of the
Apartment Buyer Agreement in so far as the same are not
inconsistent with the terms of this settlement, shall continue to
binding between the parties.”
5. The “Apartment Buyer Agreement” (hereinafter referred to as
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the “ABA”) was, it may be noted, the agreement dated 16 January,
2012 referred to the individual agreements executed between the flat
buyers and the petitioner, the alleged breach of the obligations
contained in which constituted the basis of Consumer Case 1893/2017.
6. The ABAs, which were identically worded, provided for force
majeure in Clause 14(a), which reads thus:
“14.(a) The Construction of the Flat is likely to be
completed within a period of thirty six (36) months of
commencement of construction of the particular tower/
block in which the Flat is located with a grace period of
six (6) months, on receipt of sanction of the building
plans/ revised plans and all other approvals subject to
force majeure including any restraint / restrictions from
any authorities, non-availability of building materials or
dispute with construction agency /workforce and
circumstances beyond the control of Company and
subject to timely payments by the Buyer(s) in the Said
Complex. No claims by way of damages/ compensation
shall be against the Company in case of delay in handing
over the possession on account of said reasons. For the
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By:SUNIL SINGH NEGI
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purposes of this Agreement, the date of application for
issuance of occupancy / completion /part completion
certificate of the Said Complex or the Flat shall be
deemed to be the date of completion. The Company on
completion of construction shall issue a final call notice
to the Buyer(s), who shall remit all dues within thirty
(30) days thereof and take possession of the Flat after
execution of Sale Deed. If possession is not taken by the
Buyer(s) within thirty (30) days of offer of possession,
the Buyer(s) shall be deeded to have taken possession
for the purposes of this Agreement and for the purposes
of payment of the maintenance charges, taxes, property
tax or any other tax imposable upon the Flat.”
7. Learned Counsel for the parties are ad idem that there was no
other provision relating to force majeure, to be found in the ABAs. In
other words, unlike normal commercial contracts which provide, in
the case of force majeure, for a notice of force majeure to be issued
within a stipulated period within the occurrence of the force majeure,
etc., no such stipulations are to be found in the ABAs.
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8. On 25 August, 2020, the petitioner addressed individual
communications to each of the flat buyers, which reads thus:
“Ref: SVIPL12020-21/8661 Dated: 25/08/2020
CUST_ID: GF034
DR SWADESHKUMAR
S/O MR JAI SINGH
FL. NO, 488, NATHUPUR, DLF-III,
GURGAON, HARY ANA PIN - 122002
PH.. 9911635096
Dear Sir/Ma'am,
Greetings from Shree Vardhman Group
“1. This is in reference to the settlement agreement dated
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By:SUNIL SINGH NEGI
Signing Date:12.07.2022
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15.01.2019 (“Settlement Agreement”) executed by and
between us and Flora Welfare Association (“Association”)
which has been rectified by you as one of the members of the
Association.
2. The Settlement Agreement recorded, inter-alia, steps
towards timely completion of the project and also dates for
achieving various milestones as detailed therein. We left no
stone unturned for discharging our obligations under the
Settlement Agreement and as result we have been able to
complete the construction for Tower B1, B2 & B3 and applied
for the OC for these towers on 16.11.2019. Few photographs
of the project showing current status are attached herewith for
your perusal. The Allottees of these towers have already been
offered possession for the limited purpose of fit outs and
many of them have already taken possession of their
respective units after full and final settlement of their
respective accounts with us. For the remaining towers,
though we have been able to complete major construction
activities, however, all our plans and efforts to complete the
said towers and offer possession have been hit due to Force
Majure and reasons beyond our control.
3. The Environmental Pollution (Prevention and Control)
Authority for NRC (“EPCA”) vide its notification bearing
No.EPCA-R/2019/L-49 dated 25.10.2019 banned construction
activity in NCR during night hours (6pm to 6am) from
26.10.2019 to 30.10.2019 which was later on converted into
complete 24 hours ban from 01.11.2019 to 05.11.2019 by
EPCA vide its notification No.EPCA-R/2019/L-53 dated
01.11.2019. The Hon‟ble Supreme Court of India vide its
order dated 04.11.2019 passed in Writ Petition
No.13029/1985 titled as M.C. Mehta…. vs….. Union of India
completely banned all construction activities in NCR which
restriction was partly modified vide order dated 09.12.2019
and was completely lifted by the Hon‟ble Supreme Court vide
its order dated 14.02.2020. These bans forced the migrant
labourers to return to their native States/ Villages creating an
acute shortage of labourers in NCR region. Due to the said
shortage in construction activity could not resume at full
throttle even after lifting of ban by the Hon‟ble Supreme
Court.
4. Even before the normalcy in construction activity
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By:SUNIL SINGH NEGI
Signing Date:12.07.2022
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could resume, the world was hit by the „Covid-19‟ pandemic.
The whole world is still reeling from the outbreak and
widespread of the corona virus and normal business
operations have been substantially disrupted globally due to
the same. The concern with respect to the spread of Covid-19
pandemic has been noticed, acknowledged and certified by
various governments across the globe including the
Government of India (“GOI”), and governments across the
globe including the GOI have been taking various stringent
and extreme actions to curb the outbreak and spread of the
Covid-19 pandemic.
5. As an initial step, the Ministry of Home Affairs, GOI
vide notification dated March 24, 2020 bearing no.40-3/2020-
DM-I(A) recognized that India was threatened with the spread
of Covid-19 epidemic and ordered a complete lockdown in
the entire country for an initial period of 21 (twenty one) days
which started from March 25, 2020. By virtue of various
subsequent notifications, the Ministry of Home Affairs, GOI
further extended the lockdown from time to time and till date
the lockdown has not been completely lifted. Various state
governments have also enforced several strict measures to
prevent the spread of Covid-19 pandemic including imposing
curfew, lockdown, stopping all commercial activity and
construction work, etc.
6. In addition to the above, due to closure of commercial
and construction activities, and fearing loss of livelihood and
social security, labourers across the country took extreme
steps to get back to their native villages and towns and the
whole country witnesses an unprecedented exodus of these
migrant labourers from satellite towns including NCR. On
account of such mass migration of the labourers to their native
state, we are currently facing shortage of labourers and
difficulty in resuming the construction activities. Further, on
account of stringent inter-state border restrictions and
restriction on movement of goods across the country, the
procurement of material required for construction also became
difficult in these challenging times and the same brought the
construction activities to a grinding halt.
7. Furthermore, the sale of the apartments/ units has also
taken a severe hit as Covit-19 has affected the Indian
economy and led to a massive economic slowdown and loss
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Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:12.07.2022
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of job security, due to which the prospective customers are
reluctant to invest in real estate projects.
8. Please also note that pursuant to issuance of advisory
by the GOI vide office memorandum dated May 13, 2020,
regarding extension of registrations of real estate projects
under the provisions of the Real Estates (Regulation and
Development) Act, 2016 due to „ force majeure’, the Haryana
Real Estate Regulatory Authority has also extended the
registration and completion date by 6 (six) months for all real
estate projects whose registration or completion date expired
and, or, was supposed to expire on or after March 25, 2020.
9. Please note that the current circumstances have put us
in the midst of testing times and an extremely adverse
situation. However we are confident that with your
cooperation and support we shall overcome this
unprecedented adversity and deliver our project to our valued
customers.
10. Accordingly, in light of the aforesaid circumstances the
dates for achieving various milestones as mentioned in the
Settlement Agreement are required to be extended; and a
period of five months from 25.10.2019 to 25.03.2020 due to
ban/ restraint on construction activity imposed by EPCA and
Hon‟ble SC and its aftermath; and another period of six
months for the time being from 25.03.2020 is required to be
excluded while computing the periods agreed in the
Settlement Agreement for achieving various milestones. As a
result, the time agreed for achieving every milestone in the
Settlement Agreement and extended by 11 months for the
time being.
11. We hope that you will understand and cooperate with
us to deal with the present unprecedented situation and
facilitate an early delivery of the project.
For Shree Vardhman Infrahome Pvt. Ltd.
Sd/-
Dolly Arora
(Head Customer Care)”
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Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:12.07.2022
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9. Thus, by the aforesaid communication dated 25 August, 2020,
the petitioner pleaded the existence of force majeure conditions, which
were inhibiting it from performing its obligations under the Settlement
Agreement within the timelines envisaged therein and, on that ground,
sought extension of the milestones envisaged in the settlement
agreement by a period of eleven months.
10. On the petitioner‟s failing to hand over the possession of the
flats, or to procure the occupancy certificate, within the timeline
envisaged in the settlement agreement, the respondents filed
individual execution petitions before the learned NCDRC seeking
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execution of the order dated 15 January, 2019. It was alleged that the
settlement agreement provided that, in the event of breach, by the
petitioner, in complying with its obligation envisaged by the
settlement agreement within the timelines postulated therein, the
individual flat buyers were entitled to walk out of the agreement and
were entitled to the refund of the amounts paid by them. Alleging
breach, by the petitioner, of the timelines stipulated in the settlement
agreement, the execution petitions filed by the respondents sought
refund of the amounts deposited by them with the petitioner, with
interest.
11. I may note, here, that an objection was initially raised, by the
petitioner, before the learned NCDRC, that, as the complainant in the
consumer case was the association, the individual flat buyers could not
maintain execution petition. This objection has, however, rightly been
rejected by the learned NCDRC, observing that the settlement
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Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:12.07.2022
16:47:29
agreement itself permitted the individual flat buyers to move for
execution. Mr. Shalabh Singhal, learned Counsel for the petitioner
has, fairly, not urged this ground in the present proceedings, and has
restricted his contention before the Court to the plea of force majeure
which was advanced before the learned NCDRC.
12. Before the learned NCDRC, the petitioner urged the plea of
force majeure and the plea stands recorded thus, in paras 7 & 8 of the
orders passed by the learned NCDRC:
7. It was further submitted that in the Settlement
Agreement the principle understanding between the Parties
was completion of project and delivery of possession of the
respective flats. However, in certain contingencies the option
of refund alongwith interest, was given to the Allottees
merely to deter the Opposite Party/JD Developer against any
willful default or negligence and to ensure the completion of
Project within time. It was further stated that conjoint reading
of Clauses 3, 5 and 6 of the Settlement Agreement makes it
clear that in normal prevailing conditions, the Developer had
time till December 2020 to obtain occupancy certificate for
offering possession of the Flats. It was submitted that as per
terms of the Settlement Agreement, they have paid interest till
December 2019 to all the Allottees. But due to the force
majeure conditions, which were beyond their control and duly
accepted in the Settlement Agreement, i.e., bans on
construction activities by EPCA and Hon‟ble Supreme Court,
nationwide lock down and disruption of supply chains for
construction materials due to Covid-19 pandemic and
shortage of labour etc., the Occupancy Certificate could not
be procured in time.
8. In support of his contention the Opposite Party / JD
Developer relied upon Order dated 08.03.2021 passed by the
Hon‟ble Supreme Court in Suo Motu Writ Petition (Civil) No.
3 / 2020, in which it has been held as under:-
“2. …….We deem it appropriate to issue the following
directions: -
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By:SUNIL SINGH NEGI
Signing Date:12.07.2022
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1. In computing the period of limitation for
any suit, appeal, application or proceeding, the
period from 15.03.2020 till 14.03.2021 shall
stand excluded. Consequently, the balance
period of limitation remaining as on 15.03.2020,
if any, shall become available with effect from
15.03.2021.
2. In cases where the limitation would have
expired during the period between 15.03.2020
till 14.03.2021, notwithstanding the actual
balance period of limitation remaining, all
persons shall have a limitation period of 90 days
from 15.03.2021. In the event the actual balance
period of limitation remaining, with effect from
15.03.2021, is greater than 90 days, that longer
period shall apply.
3. The period from 15.03.2020 till
14.03.2021 shall also stand excluded in
computing the periods prescribed under
Sections 23 (4) and 29A of the Arbitration and
Conciliation Act, 1996, Section 12A of the
Commercial Courts Act, 2015 and provisos (b)
and (c) of Section 138 of the Negotiable
Instruments Act, 1881 and any other laws,
which prescribe period(s) of limitation for
instituting proceedings, outer limits (within
which the court or tribunal can condone delay)
and termination of proceedings….”
13. Thus, it is clear that force majeure was pleaded, by the
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petitioner, not only on the basis of the order dated 8 March, 2020
passed by the Supreme Court in Suo Motu Writ Petition 3/2020 , but
also on the ground of nationwide lockdown, disruption of supply chain
of construction materials due to Covid-2019 pandemic, shortage of
labour and bans on construction activities by the EPCA and the
Supreme Court, amongst others.
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Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:12.07.2022
16:47:29
14. Mr. Shalabh Singhal, learned Counsel for the petitioner, submits
that the impugned order passed by the learned NCDRC does not
examine this aspect.
15. This submission is, needless to say, contested by Mr. Sahil
Sethi, learned Counsel for the respondent.
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16. A perusal of the impugned orders dated 25 April, 2022, passed
by the learned NCDRC reveals that the submission of Mr. Singhal is
correct. Having recorded the plea of force majeure , as advanced by
the petitioner before the learned NCDRC, as it has in paras 7 & 8
extracted supra, the learned NCDRC also proceeded to note the
reliance, by the respondents, to contest the submission, on the
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judgment dated 29 May, 2020, passed by this Court in Halliburton
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Offshore Services Inc. v. Vedanta Limited. .
17. Having thus recorded the contentions of both sides, the findings
of the learned NCDRC commence from para 18 of the impugned
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orders dated 25 April, 2022. The only observation with respect to
force majeure , to be found in the findings of the learned NCDRC, is
contained in paras 24 and 25 of the impugned order, which read thus:
“24. The next contention of the learned Counsel for the JD
Developer is that due to force majeure circumstances due to
Covid-19, it could not procure the Occupancy Certificate in
time. For which JD Developer relied upon Order dated
08.03.2021 passed by the Hon‟ble Supreme Court in Suo
Motu Writ Petition (Civil) No.3/ 2020.
25. From a bare perusal of the Order dated 08.03.2021
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2020 SCC OnLine Del 2068
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Signing Date:12.07.2022
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passed by the Hon‟ble Supreme Court in Suo Motu Writ
Petition (Civil) No.3/2020, it is crystal clear that there was
direction with regard to computation of the period of
limitation in filing of the Petitions/ applications/
suits/appeals/all other proceedings before any Court/Tribunal
across the Country. There was no specific direction in the said
Order for extension of compliance of any Order passed by any
Court/Tribunal meaning thereby the Judgment Debtor cannot
take the advantage of this Order in relation to their obligation
in terms of the Settlement Agreement dated 15.01.2019.”
18. I am of the respectful opinion that the learned NCDRC is not
correct in having observed, in para 24 of the of the impugned orders,
that the petitioner was, for the purpose of its plea of force majeure,
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relying upon the order dated 8 March, 2020 passed by the Supreme
Court in Suo Motu Writ Petition 3/2020 .
19. In so observing, the learned NCDRC appears to have failed to
note the fact that the plea of force majeure was not merely urged on
the basis of the order passed by the Supreme Court, but was also
predicated on the bans on construction activities by EPCA and
Hon‟ble Supreme Court, nationwide lock down, disruption of supply
chains for construction materials due to Covid-19 pandemic and
shortage of labour etc., as is noted in para 7 of the impugned orders.
In other words, paras 7 and 24 of the impugned orders appear to be
contradictory in terms, to the extent they refer to the plea of force
majeure , as urged by the petitioner, and the basis on which the plea
was predicated.
20. The learned NCDRC has proceeded to hold that, in its capacity
as an executing Court, it could not go behind the decree. In my
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respectful opinion, in examining the validity and sustainability of the
plea of force majeure , as urged by the petitioner before it, the learned
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NCDRC would not be going behind the decree dated 15
January,2019, for the simple reason that the decree was passed in
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terms of settlement agreement on the same day, i.e. 15 January, 2019
and the settlement agreement incorporated, by reference in Clause 7
(d) extracted supra, the terms of the ABAs executed between the
petitioner and the flat buyers, insofar as they were not in conflict with
any of the terms of the settlement agreement to be continue to be
binding. There being no term in the settlement agreement which
conflicted with the provision for force majeure, as contained in the
ABAs, by operation of Clause 7(d) of the settlement agreement, the
said clause was incorporated by reference into the settlement
agreement.
21. Per sequitur, it also stood incorporated, by reference, into the
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decree dated 15 January, 2019.
22. Examination of the plea of force majeure, as urged by the
petitioner, would not, therefore, require the learned NCDRC to travel
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behind the decree dated 15 January, 2019.
23. In this view of the matter, without entering into the merits of the
controversy, or even the merits of the controversy and solely on the
ground that the learned NCDRC has failed to consider the plea of
force majeure as advanced by the petitioner before it, I deem it
appropriate to dispose of these petitions by remanding the execution
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petitions, forming subject matter of these proceedings, to the learned
NCDRC for a reconsideration, solely on the aspect of force majeure as
urged by the petitioner. Needless to say, this Court is not expressing
any opinion on the correctness and validity of the plea of force
majeure or on whether the decision of the learned NCDRC, on the
said plea, would alter the final decision that it has taken in the
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impugned orders dated 25 April, 2022. It would be for the learned
NCDRC to consider the plea of force majeure and, after taking a view
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thereon, to further take a view on whether the orders dated 25 April,
2022 were required to be maintained or called for any alteration or
modification.
24. All aspect in this regard shall remain to be considered and
decided by the learned NCDRC.
25. It is made clear that this Court has remanded the matter to the
learned NCDRC solely on the ground of non-consideration of the plea
of force majeure and has not, therefore, applied its mind to any other
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findings in the impugned orders dated 25 April, 2022 or as to
whether the said orders can sustain on any of the other grounds which
are contained therein.
26. Mr. Sethi, learned Counsel for the respondent, though he did
press the petition with the requisite vigour, was ultimately, in the
interests of justice and to avoid protraction of the proceedings,
agreeable to this course of action but requested that a time bound
framework could be fixed for the learned NCDRC to take a decision in
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the above regard.
27. As such, the parties are directed to appear before the learned
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NCDRC on 12 July, 2022.
28. The learned NCDRC is respectfully requested to take up the
matter on the said date and pass necessary orders in terms of the
present judgement. Needless to say, this order would not stand in the
way of the learned NCDRC, in the even that it is not convenient for
the learned NCDRC to hear the matter on that day, fixing any date for
the purpose.
29. Mr. Metha submits that his client is agreeable to pay the
compensation to the respondents for the delays that have taken place
in compliance with the timelines for completing the obligations as per
the settlement agreement.
30. These petitions stand disposed of in the aforesaid terms, with no
orders as to costs.
C.HARI SHANKAR, J
JULY 7, 2022
r.bararia
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By:SUNIL SINGH NEGI
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