A Delhi consumer court has ordered a resort developer to refund a Rs 2 lakh advance payment with interest and pay compensation to a customer whose daughter’s wedding could not take place at the venue due to COVID-19 lockdown restrictions in May 2021.
The District Consumer Disputes Redressal Commission held that withholding the booking deposit following a forced cancellation caused by government pandemic restrictions constituted a deficiency in service and an unfair trade practice. A panel comprising President Divya Jyoti Jaipuriar and member Harpreet Kaur Charya issued the ruling on July 13, directing Krish Developers Pvt Ltd to process the refund alongside interest and harassment damages.
Event Cancelled Following Lockdown Curbs
The case stems from a complaint filed by Naresh Kumar Madaan, who booked the City Park Green Resort, a sister concern of Krish Developers, on January 17, 2021, for his daughter’s wedding scheduled on May 22, 2021. The agreed total cost for hosting 350 guests was Rs 10.68 lakh. Madaan paid Rs 2 lakh as advance money, giving Rs 1 lakh in cash on the day of booking and transferring another Rs 1 lakh via NEFT on February 12, 2021.
Prior to the event, a severe surge in coronavirus cases led the Delhi Disaster Management Authority to issue orders prohibiting public gatherings and shutting down banquet halls and hotels for weddings. Under the regulations, marriages were restricted to homes or court venues with a maximum limit of 20 attendees.
Madaan contacted the resort on May 19, 2021, seeking a full refund of his advance payment, but received no response. The family subsequently held a simplified marriage ceremony at home on May 22, 2021, with only family members present. After repeated attempts to regain the deposit failed, Madaan filed a formal grievance before the consumer commission.
Resort Cites Non-Refundable Policy
In its submission, the resort management argued that the booking agreement executed on January 17, 2021, contained an explicit non-refundable clause for advance payments. The company also disputed the total amount received, admitting to the Rs 1 lakh NEFT transaction while denying the Rs 1 lakh cash payment on the grounds that it did not accept cash payments from clients. The venue further cited significant financial hardship during the pandemic, noting that it continued paying employee salaries despite operational losses.
Force Majeure Overrides Contract Terms
Rejecting the venue’s defense, the consumer commission observed that public health orders banning banquet hall functions represented an extraordinary, unforeseeable, and unavoidable force majeure event. The panel stated that such exceptional circumstances could not be treated as standard contractual situations, ruling that businesses cannot enforce non-refundable clauses when performance becomes legally impossible.
The commission instructed Krish Developers to refund the complete Rs 2 lakh advance along with 7 percent annual interest calculated from the respective dates of payment until realization. Additionally, the developer was directed to pay Rs 35,000 as compensation for mental agony and litigation costs within 30 days.
