Moot Court – Civil case- Breach of Contract -Specific Relief Act

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Case Title: Kavya Gupta v. Shantanu Constructions Pvt. Ltd.

Issue: Whether the delay in handing over possession of a flat amounts to a breach of contract and entitles the plaintiff to compensation.

Facts: Kavya Gupta booked a flat with Shantanu Constructions and paid 80% of the total price upfront. The agreement promised possession within 24 months, but the project was delayed by 3 years due to “unforeseen circumstances.” Kavya files a suit for compensation, claiming mental agony and financial losses due to paying rent elsewhere. The defendant argues that the delay was caused by force majeure events, including a pandemic.

Legal Issues to Debate: Can the delay be justified under the force majeure clause? What constitutes fair compensation for mental agony and financial losses? Whether the developer’s act amounts to a breach of contract under the Specific Relief Act, 1963.”

Case Title: Kavya Gupta v. Shantanu Constructions Pvt. Ltd.

Court: Moot Court Simulation
Issue: Whether the delay in handing over possession of a flat amounts to a breach of contract and entitles the plaintiff to compensation.

Prosecution/Plaintiff’s Memorial

I. Statement of Facts

  1. Ms. Kavya Gupta booked a flat with Shantanu Constructions Pvt. Ltd., paying 80% of the total price upfront, amounting to significant financial commitment and trust.
  2. As per the agreement, possession was to be handed over within 24 months. However, the possession was delayed by three years due to alleged “unforeseen circumstances,” including a pandemic.
  3. The plaintiff had to pay rent for these additional three years and suffered mental agony due to the delay.
  4. The defendant invoked the force majeure clause, claiming the delay was caused by a pandemic, which constitutes a force majeure event.
  5. The plaintiff seeks compensation for financial losses, mental agony, and damages caused by the breach of contract.
Breach of Contract -Specific Relief Act

II. Issues for Determination

  1. Whether the defendant’s delay can be justified under the force majeure clause?
  2. Whether the developer’s act amounts to a breach of contract under Indian law, specifically the Specific Relief Act, 1963?
  3. What constitutes fair compensation for financial losses and mental agony?

III. Plaintiff’s Arguments

1. Breach of Contract Under Indian Law

  • Section 73 of the Indian Contract Act, 1872:
  • Provides compensation for losses arising naturally from a breach of contract.
  • In this case, the delay of three years constitutes a failure to deliver within the stipulated time frame.
Supporting Case Law:
  • Kamal Sood v. DLF Universal Ltd., (2007) 143 DLT 141:
  • The court held that failure to deliver possession within the agreed time is a breach of contract, entitling the plaintiff to compensation.
  • Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725:
  • The Supreme Court ruled that delayed possession amounts to an unfair trade practice under the Consumer Protection Act, 1986, and awarded compensation to the buyer.

2. Invalid Invocation of Force Majeure Clause

  • Force majeure clauses apply only when events make the performance of the contract impossible, not merely inconvenient or delayed.
Analysis:
  • The pandemic may have caused a delay of one year, but the three-year delay cannot be solely attributed to force majeure.
  • The defendant has not presented evidence proving that the pandemic directly prevented the construction activities.
Supporting Case Law:
  • Energy Watchdog v. CERC, (2017) 14 SCC 80:
  • The Supreme Court held that force majeure cannot be invoked when alternative means are available to perform contractual obligations.
  • M/s Halliburton Offshore Services Inc. v. Vedanta Limited, 2020 SCC OnLine Del 836:
  • The Delhi High Court clarified that delays due to the COVID-19 pandemic must be specifically linked to the inability to perform obligations, failing which force majeure cannot be claimed.

3. Consumer Rights Violations and Unfair Trade Practices

  • Section 2(1)(r) of the Consumer Protection Act, 2019:
  • Recognizes delayed possession as an unfair trade practice.
Supporting Case Law:
  • Fortune Infrastructure v. Trevor D’Lima, (2018) 5 SCC 442:
  • The Supreme Court awarded compensation for mental agony and financial losses due to delayed possession.
  • NBCC (India) Ltd. v. Shri Ram Trehan, 2021 SCC OnLine NCDRC 227:
  • The National Consumer Disputes Redressal Commission (NCDRC) held that homebuyers are entitled to compensation for delays beyond the stipulated timeline.

4. Mental Agony and Financial Losses

  • Section 73 of the Indian Contract Act, 1872:
  • Entitles the aggrieved party to recover both direct and consequential losses from the breach of contract.
Supporting Case Law:
  • DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, (2020) SCC OnLine NCDRC 12:
  • Compensation was awarded for financial losses incurred due to continued rent payments and the mental agony of delayed possession.
  • Jayantilal Investments v. Madhuvihar Co-operative Housing Society, (2007) 9 SCC 220:
  • The court acknowledged the importance of mental well-being in property disputes and awarded damages accordingly.

IV. Reliefs Sought

  1. Compensation for Financial Losses:
  • Reimbursement of the rent paid during the delayed period (to be calculated based on ₹X per month for 36 months).
  1. Compensation for Mental Agony:
  • A claim of ₹10 lakh as compensation for the emotional distress caused.
  1. Interest on Paid Amounts:
  • Interest at 18% per annum on the amount paid to the defendant, calculated from the promised possession date to the actual date of possession.
  1. Penalty for Breach of Contract:
  • Additional damages for willful negligence by the defendant, amounting to ₹5 lakh.
  1. Legal Costs:
  • Reimbursement of all legal costs incurred by the plaintiff in pursuing this case.

V. Conclusion

The plaintiff, Ms. Kavya Gupta, has suffered both financial and emotional distress due to the defendant’s negligence and unjustifiable delay in delivering possession. The defendant’s invocation of force majeure is invalid as the pandemic cannot explain the entirety of the three-year delay. This case highlights a breach of trust, contract, and consumer rights. The plaintiff is entitled to compensation for financial losses, mental agony, and other damages.

We respectfully request this Hon’ble Court to:

  • Declare the defendant’s actions as a breach of contract.
  • Award appropriate compensation and damages to the plaintiff.
  • Impose penalties for negligence and unfair trade practices.

Citations and References

  1. Kamal Sood v. DLF Universal Ltd., (2007) 143 DLT 141.
  2. Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghavan, (2019) 5 SCC 725.
  3. Energy Watchdog v. CERC, (2017) 14 SCC 80.
  4. M/s Halliburton Offshore Services Inc. v. Vedanta Limited, 2020 SCC OnLine Del 836.
  5. Fortune Infrastructure v. Trevor D’Lima, (2018) 5 SCC 442.
  6. NBCC (India) Ltd. v. Shri Ram Trehan, 2021 SCC OnLine NCDRC 227.
  7. DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, (2020) SCC OnLine NCDRC 12.
  8. Jayantilal Investments v. Madhuvihar Co-operative Housing Society, (2007) 9 SCC 220.

Respectfully submitted,
Counsel for the Plaintiff: Kavya Gupta [Name of Counsel]

Defendant

Case Title: Kavya Gupta v. Shantanu Constructions Pvt. Ltd.

Court: Moot Court Simulation
Issue: Whether the delay in handing over possession of a flat amounts to a breach of contract and entitles the plaintiff to compensation.

Defendant’s Memorial

I. Statement of Facts

  1. Ms. Kavya Gupta booked a flat with Shantanu Constructions Pvt. Ltd. and paid 80% of the total price upfront.
  2. The agreement between the parties stipulated that possession would be handed over within 24 months, subject to delays due to force majeure events.
  3. The project faced unforeseen circumstances, including a global pandemic (COVID-19), which severely disrupted construction timelines.
  4. The defendant invoked the force majeure clause, which expressly covered delays caused by circumstances beyond the reasonable control of the developer.
  5. The delay was caused by government-mandated lockdowns, labor shortages, and disruptions in the supply chain due to the pandemic.
  6. The defendant denies any negligence or breach of contract and asserts that the delay was unavoidable under the force majeure clause.

II. Issues for Determination

  1. Whether the delay can be justified under the force majeure clause?
  2. Whether the developer’s actions amount to a breach of contract under the Specific Relief Act, 1963?
  3. What constitutes fair compensation, if any, in light of the force majeure event?

III. Defendant’s Arguments

1. Valid Invocation of Force Majeure Clause

  • Section 56 of the Indian Contract Act, 1872:
  • Performance of a contract is excused if it becomes impossible due to an unforeseen event.
Analysis:
  • The force majeure clause in the agreement explicitly covers delays caused by events beyond the control of the developer, such as natural disasters, pandemics, or government restrictions.
  • The COVID-19 pandemic is an unprecedented event that caused nationwide lockdowns, severely affecting the construction industry.
  • The defendant made every effort to mitigate delays but was hindered by factors outside its control, including:
  • Government-mandated shutdown of construction sites.
  • Shortage of labor due to mass migration during the pandemic.
  • Disruptions in the supply chain for essential construction materials.
Supporting Case Law:
  • Energy Watchdog v. CERC, (2017) 14 SCC 80:
  • The Supreme Court upheld that force majeure events excuse delays if the performance of the contract becomes impossible.
  • M/s Halliburton Offshore Services Inc. v. Vedanta Limited, 2020 SCC OnLine Del 836:
  • The Delhi High Court recognized the COVID-19 pandemic as a force majeure event, excusing delays caused by it.

2. No Breach of Contract Under the Specific Relief Act, 1963

  • Section 10 of the Specific Relief Act, 1963:
  • Specific performance of a contract can only be enforced if the party seeking relief has fulfilled its obligations and if the breach was not excusable.
Analysis:
  • The delay does not constitute a breach because the force majeure clause provides a valid defense.
  • The defendant communicated the delays to the plaintiff in a timely manner, demonstrating transparency and good faith.
Supporting Case Law:
  • Chennai Metropolitan Development Authority v. S. Basheer Ahmed, (2010) 5 SCC 244:
  • The court held that delays caused by uncontrollable circumstances do not constitute a breach of contract.

3. Compensation for Financial Losses and Mental Agony is Not Justified

  • Compensation under Section 73 of the Indian Contract Act, 1872 can only be awarded for direct and foreseeable losses arising from a breach of contract.
Analysis:
  • The delay caused by the pandemic was unforeseeable and beyond the defendant’s control.
  • The plaintiff’s financial losses, such as rent payments, are consequential and not directly attributable to the defendant’s actions.
  • Claims for mental agony must be substantiated with evidence, which the plaintiff has failed to provide.
Supporting Case Law:
  • Kishore Lal v. Chairman, Employees State Insurance Corporation, (2007) 4 SCC 579:
  • The Supreme Court emphasized that claims for mental agony require specific proof.
  • DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, (2020) SCC OnLine NCDRC 12:
  • The court held that compensation for mental agony cannot be awarded without concrete evidence of negligence or malfeasance.

4. Reasonable Measures Taken by the Defendant

Analysis:
  • The defendant ensured that construction resumed as soon as the lockdown restrictions were lifted.
  • Regular updates were provided to the plaintiff regarding the progress of the project.
  • The defendant’s actions demonstrate due diligence and a commitment to fulfilling its contractual obligations despite challenging circumstances.
Supporting Case Law:
  • Naihati Jute Mills Ltd. v. Hyaliram Jagannath, (1968) 1 SCR 821:
  • The court ruled that reasonable efforts to perform contractual obligations mitigate claims of breach.

IV. Reliefs Sought

  1. Dismissal of the Plaintiff’s Claims:
  • The defendant respectfully submits that the claims for compensation are baseless and not supported by law.
  1. Acknowledgment of Force Majeure:
  • The defendant requests this Hon’ble Court to recognize the COVID-19 pandemic as a valid force majeure event, excusing the delay in handing over possession.
  1. No Compensation for Mental Agony or Financial Losses:
  • The plaintiff’s claims for rent payments and mental agony are speculative and not directly attributable to the defendant’s actions.
  1. Award of Legal Costs:
  • The defendant seeks reimbursement of all legal costs incurred in defending this baseless suit.

V. Conclusion

The defendant, Shantanu Constructions Pvt. Ltd., acted in good faith and within the bounds of the contractual agreement. The delay in possession was caused by uncontrollable, unforeseen circumstances, including the COVID-19 pandemic, which qualifies as a force majeure event. The plaintiff’s claims for financial losses and mental agony are speculative and lack legal merit.

We respectfully request this Hon’ble Court to:

  • Dismiss the suit filed by the plaintiff.
  • Declare the force majeure clause valid and applicable in this case.
  • Award legal costs to the defendant.

Citations and References

  1. Energy Watchdog v. CERC, (2017) 14 SCC 80.
  2. M/s Halliburton Offshore Services Inc. v. Vedanta Limited, 2020 SCC OnLine Del 836.
  3. Chennai Metropolitan Development Authority v. S. Basheer Ahmed, (2010) 5 SCC 244.
  4. Kishore Lal v. Chairman, Employees State Insurance Corporation, (2007) 4 SCC 579.
  5. DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, (2020) SCC OnLine NCDRC 12.
  6. Naihati Jute Mills Ltd. v. Hyaliram Jagannath, (1968) 1 SCR 821.

Respectfully submitted,
Counsel for the Defendant: Shantanu Constructions Pvt. Ltd.

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