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Joint Development Agreement – Commercial purpose -Consumer Forum – Arbitration

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On 9.5.2021, the complainant –  absolute of the property and the builders had entered into Joint Development Agreement to develop property and construct multi-storied residential apartments.  The construction was to be completed by October, 2013.  General Power of Attorney in favour of the developer was also executed.

However, the complainant was required to file consumer complaint since the developer committed breach of the agreement and also did not pay Rs.40 lakhs with interest. The complaint was allowed vide order dated 18.11.2016.

HELD that the arbitration clause in the JDA does not bar the jurisdiction of the Consumer Forum.  The owner cannot be made to wait indefinitely for delivery of possession and retention of the amounts of owner relying on force majeure clause is not only an act of deficiency of service but also amounts to unfair trade practice. Joint Development Agreement, although commercial in nature, the owner has no control over the construction and does not participate in the business.   As per the agreement, the owner is entitled to a certain constructed area.  Therefore, the owner and party of the JDA is a consumer.

Order dated 27.5.2014 of the National Consumer Disputes Redressal Commission in First Appeal No.95 of 2017 of M/s. Nandi Builders & Developers and another   Vs. Saraswathamma with connected appeal.

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