Failure to acquire Occupation Certificate is Subjected to Deficiency in service under the Consumer Protection Act: Supreme Court

Builders are liable to get an Occupancy certificate and pay for the relevant charges till the certificate has been provided likewise, abide to perform the duty is responsible to transfer the title of the flats to the respective society held by the Supreme Court by the JUSTICE DY CHANDRACHUD AND AS BOPANNA in the matters of Samruddhi Co-operative Housing Society Ltd V. Mumbai Mahalaxmi Construction Pvt Ltd. [Civil Appeal No 4000 of 2019]

The background arises from filing a complaint Samruddi Co-operative Housing Society Ltd for a refund of the excess taxes and charges paid to the Municipal Authorities. Allegations on the deficiency of service of the builder. It was contended that due to the failure of the builder to obtain the Occupancy Certificate, members are liable to pay 25% higher Property Tax and an additional 50% on Water charges. The Complaint was bought before the National Consumer Disputes Commission (NCDRC). The appellant will not fall under the Definition of Consumer under Section 2(1) (d) of the Consumer Protection Act, 1986 and dismissed on the grounds that barred by limitation and not maintainable.

A continuing wrong occurs when the party continuously breach an obligation imposed by law or agreement. The obligations inter alia include making disclosures on the nature of the title of the land, encumbrances on the land, fixtures, fittings and amenities to be provided. The responsibility to obtain occupancy certificates from the local authority is imposed under the agreement to sell between the members of the appellant and the respondent. 

According to Section 3 and 4 of the Maharashtra Ownership, Flats Act impose the Promoters obligation to provide the Occupation certificate to the flat owners. Promoters must pay for the outgoings such as ground rent, municipal taxes, water charges and electric charges till the time the property is transferred to flat owners. When the promoter fails to pay such charges, the promoter is liable even after the transfer of property. M.Siddiq v. Suresh das, CWT V. Suresh seth and Balakrishna Savalram Pujari Waghmare v. Shree Dhyaneshwar Maharaj Sansthan following cases were used as precedence. 

The Hon’ble Court held that the “Respondent failure to obtain Occupation Certificate is a deficiency in service and respondent is held liable to transfer the title of the flats to the Society along with Occupation certificate. Thus, the member of the society is liable to pay for the compensation as a recompense for the consequent liability arises from the lack of occupancy certificate”. 


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Judgement Reviewed – Kaviya s

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