Legal Question in Construction Law in India

Builder is trying to invoke forced majeure of the contract which we entered for completing the building and escalating the cost of the apartment by 70%. His stand is in the past 3 and half years the cost of raw materials has gone up by 400%. Hence he is invoking the compelling situation act of Indian contracts act. There is no clause in the agreement for escalations. Can the builder justify this move as we did not have any Act of God or Civil war in Bangalore, Karnatak in the said time. We have an arbitration clause in the agreement which states that the arbitrator will be appointed by the builder himself. Can I approach the consumer court for a remedy? As the arbitrator is his person he will pass the verdict on the builder's behalf.

Asked on 9/19/13, 1:50 am

1 Answer from Attorneys

Fca Prashant Chavan Expert Edge LLP
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Dear Sir / Madam,

NO, the builder has no justification as you rightly pointed out that cost of materials having gone up drastically in no way constitutes and invokes a force majeure clause. YES, despite the arbitration clause, there are High Court judgements stating that you can approach the Consumer Court for redressal of your grievances. Very soon a Real Estate Regulator will also be functional in the country.


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Answered on 9/19/13, 2:28 am

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