Karnataka HC Caps COVID-19 Excuse for Property Delays at 18 Months

For countless homebuyers, the dream of owning a home has been stuck in limbo, with builders frequently citing the COVID-19 pandemic as the reason for unending delays. While the global health crisis undoubtedly caused major disruptions, it has also been used as a convenient excuse. A recent ruling from the Karnataka High Court in Bengaluru has brought a wave of relief for such buyers, effectively putting an expiry date on the pandemic as a get-out-of-jail-free card for developers.

In the case (Karnataka HC WP 8845/2025), a single-judge bench rejected a builder’s attempt to use the pandemic to justify a prolonged delay in handing over possession. The court held that the force majeure clause—an 'act of God' provision in contracts—could not be invoked indefinitely. It established an outer limit of 18 months from the date of the initial force majeure notification, sending a clear signal that the time for blanket excuses is over.

Unpacking 'Force Majeure' in Your Agreement

Almost every builder-buyer agreement contains a 'force majeure' clause. In simple terms, this clause is designed to protect a party (usually the builder) from liability if an extraordinary event or circumstance beyond their control prevents them from fulfilling their contractual obligations. These events typically include wars, strikes, natural disasters, and, as we've seen, pandemics.

The legal concept behind this is rooted in principles found in the Indian Contract Act, 1872. While force majeure is a specific contractual term, it relates to the doctrine of frustration under Section 56 of the Act, which addresses agreements that become impossible to perform. However, for a force majeure clause to be validly invoked, the event must directly cause the delay, and the party invoking it must prove they took all reasonable steps to mitigate the impact. It cannot be used to cover up pre-existing delays or general commercial hardships.

For years, homebuyers have seen this clause used broadly, but the COVID-19 pandemic took its use to a new level. Builders began citing national lockdowns and supply chain issues as a universal reason for failing to meet possession deadlines.

COVID-19: A Legitimate Crisis, Not a Blank Cheque

To be fair, the initial phase of the pandemic was a genuine force majeure event. In March 2020, India went into a complete lockdown, bringing all construction activity to a grinding halt. Labourers migrated back to their villages, and supply chains for raw materials like steel and cement were severed.

Recognising this unprecedented challenge, real estate regulators across the country stepped in. Under the powers granted by The Real Estate (Regulation and Development) Act, 2016 (RERA), specifically Section 6, which allows for project registration extensions due to force majeure, authorities issued notifications. Most states, including Karnataka, granted a six-month extension (moratorium) to developers for all projects, with some states extending this further.

This was intended to be a temporary relief measure. However, many developers began to interpret it as a blanket permission to delay projects indefinitely, attributing years of delay to a crisis whose most acute phase lasted a few months. Even after lockdowns were lifted and economic activity resumed, the 'COVID delay' excuse persisted, frustrating buyers who continued to pay EMIs on their home loans.

Karnataka High Court Draws a Line in the Sand

The Karnataka High Court's judgment cuts through this ambiguity. The court was dealing with a petition where the builder claimed the delay was entirely covered by the force majeure event of the pandemic. The court disagreed, establishing a critical principle: the effects of a force majeure event are not perpetual.

The court reasoned that while the initial lockdown was severe, the world, including the construction industry, adapted. Supply chains were restored, labour returned, and new operating procedures were put in place. Therefore, blaming a delay in 2023 or 2024 entirely on an event from 2020 is not legally tenable without specific, overwhelming proof.

By setting an 18-month outer limit, the court has created a clear and reasonable benchmark. It acknowledges the initial shock of the pandemic but prevents it from being used as a shield for inefficiency or financial mismanagement for years afterward. This ruling provides a powerful precedent that can be cited by aggrieved homebuyers not just in Karnataka, but across the country.

Your Rights Under RERA and the CPA

This High Court judgment significantly strengthens a homebuyer's hand. It empowers you to question delays and demand accountability. Your primary recourse lies within the frameworks of RERA and the Consumer Protection Act.

Under Section 18 of RERA, if a promoter fails to complete a project or give possession by the date specified in the agreement, you have two clear options:

1. Withdraw from the project: You are entitled to a full refund of the amount paid, along with interest at a prescribed rate.
2. Continue with the project: If you still want the property, you can claim interest for every month of delay until the possession is handed over.

Furthermore, as a homebuyer, you are a 'consumer' under The Consumer Protection Act, 2019 (CPA). A significant delay in possession is a classic case of 'deficiency in service' and 'unfair trade practice'. You can file a complaint with the appropriate Consumer Disputes Redressal Commission to seek a refund, compensation for the delay, and damages for mental agony and litigation costs.

What You Should Do

If your project is delayed and the builder is citing COVID-19, here are the steps you should take:

1. Review Your Documents: Scrutinize your builder-buyer agreement to confirm the promised date of possession and understand the specifics of the force majeure clause.
2. Check the RERA Website: Visit your state RERA's portal. Check the project's registration details, including the original and any revised completion dates. See if the developer was formally granted a COVID-19 extension.
3. Calculate the Justifiable Delay: Use the original possession date. Add the official RERA-notified moratorium period (usually 6-9 months). The 18-month cap set by the Karnataka HC is a strong benchmark for the maximum delay attributable to the pandemic.
4. Communicate in Writing: Send a formal, written notice (email or registered post) to the builder demanding a firm possession date and challenging any delays that exceed a reasonable period. Refer to the RERA completion date and question the force majeure claim.
5. File a Complaint: If you do not receive a satisfactory response, do not hesitate to file a complaint. You can approach your state's RERA authority for relief under Section 18 or the Consumer Commission under the CPA. Both forums are designed to be homebuyer-friendly.
6. Seek Legal Counsel: For significant delays or large financial stakes, consulting a real estate lawyer can help you navigate the process effectively and build a strong case.

The Karnataka High Court's ruling is more than just a judgment; it's a reaffirmation of the principle that contractual obligations must be honored, and exceptional circumstances cannot be used as an excuse for incompetence or indefinite delay.

Sources

• Karnataka HC WP 8845/2025
• The Real Estate (Regulation and Development) Act, 2016
• The Indian Contract Act, 1872
• The Consumer Protection Act, 2019

This landmark ruling from the Karnataka High Court offers much-needed clarity for homebuyers besieged by delays. It underscores the importance of understanding your builder-buyer agreement and the true scope of "force majeure" clauses under property law. If you're grappling with project delays or need to navigate complex real estate law, consulting a real estate lawyer specialising in RERA can provide crucial guidance on your rights and next steps. For personalised assistance tailored to your situation, you can request a consultation.