The “Force Majeure” Trap: How We Secured Statutory Interest Against GLS Infraprojects
By Adv. Amarjeet Singh, Founder, PRAN – Policy Research Action Network Foundation
In India’s real estate sector, the “principal-only refund” has become a quiet but deeply unfair exit strategy used by stalled developers. By refunding only the base amount—and invoking Force Majeure—builders attempt to convert homebuyers’ savings into an interest-free loan for years.
Recently, before the Haryana Real Estate Regulatory Authority (HARERA Gurugram), we successfully dismantled this practice in a batch of connected matters involving the project Central Avenue, Sector 92, Gurugram, developed by GLS Infraprojects Pvt. Ltd..
The ruling, dated 13 February 2026, is not an isolated relief. It establishes what may fairly be called the “GLS Interest Precedent.”
The developer argued that delays were caused by environmental restrictions arising from proximity to Sultanpur National Park and its Eco-Sensitive Zone (ESZ).
Their contention:
Environmental notifications were “unforeseen hurdles,” amounting to Force Majeure—therefore exempting them from paying statutory interest.
This argument, if accepted, would have allowed developers to hide compliance failures behind regulatory processes. But the facts did not support that narrative.
What the Evidence Revealed
Through documentary records and statutory interpretation, we demonstrated:
1. Prior Regulatory Knowledge
Environmental compliance requirements were publicly notified well before the project launch. They were foreseeable and part of due diligence.
2. Compliance Failure, Not Prohibition
Construction within ESZ areas is regulated, not banned. Projects proceed upon obtaining required approvals.
3. Self-Created Delay
The absence of mandatory clearances stemmed from procedural lapses—not from any sudden legal embargo.
In essence, the delay was not an Act of God. It was an act of omission.
The Ruling: Interest Is a Statutory Right
The Authority directed the developer to:
✔ Refund the principal amount
✔ Pay statutory interest
✔ Calculate interest from the date of each deposit until actual realization
This is consistent with the compensatory framework under the Real Estate (Regulation and Development) Act, 2016.
The order reinforces a crucial principle: Force Majeure cannot be invoked to shield administrative negligence.
The Financial Impact: The Time Value of Money Restored
A principal-only refund would have silently shifted this loss onto the allottee. The ruling restores the doctrine of Time Value of Money, which lies at the heart of RERA’s consumer-protection architecture.
Additionally, under Sections 71 and 72 of the Act, affected allottees may pursue:
Compensation for mental agony
Litigation expenses
Other consequential damages
Why This Precedent Matters
This order establishes three critical propositions:
Regulatory delay caused by incomplete compliance is not Force Majeure.
Builders cannot retain buyer funds without compensating the time value.
Statutory interest is mandatory—not discretionary.
For more than 150 families in Central Avenue, this decision represents systemic correction, not individual relief.
For the wider real estate market, it strengthens accountability.
About PRAN Foundation
The Policy Research Action Network (PRAN) Foundation is a non-political, not-for-profit initiative dedicated to advancing justice, accountability, and equity in India.
Our work spans:
Consumer Protection
Public Health
Labour Rights
We combine litigation strategy, policy research, and community mobilization to address structural governance failures.Call to Action
If you have been offered a “principal-only” refund in a delayed real estate project, you may be legally entitled to statutory interest. Do not assume the builder’s offer reflects your legal rights.
Justice does not flow automatically from the statute. It must be asserted.
he Policy Research Action Network (PRAN) Foundation is a non-political, not-for-profit initiative dedicated to advancing justice, accountability, and equity in India.
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