In cases where the builder fails to obtain the occupation certificate, it will be considered as a “deficiency” under section 2(1)(d) of Consumer Protection Act 1986: Supreme Court

Failure to obtain the occupation certificate after the transfer of property to the consumer will be considered as a “deficiency” under Consumer Protection Act 1986 and hence the consumers or residents can be granted compensation as a relief for the excess of tax that they have been paying on basic facilities, this broader view as compared to the NCDRC proceedings was taken by the bench of Justice DY Chandrachud and JUSTICE AS Bopanna in the case SAMRUDDHU CO-OPERATIVE HOUSING SOCIETY LTD.  V. MUMBAI MAHALAXMI CONSTRUCTION PVT LTD. [CIVIL APPEAL NO 4000 OF 2019]

In this case the petitioner filed a complaint to get a refund on excess taxes that they have been paying to the municipal authorities contending that this is a “deficiency” on the part of the builder and because of their deficiency, the petitioner had to pay 25% higher property tax and additional 50% water charge. This complaint was originally dismissed by NCDRC on the contention that it was not maintainable as it was barred by limitation because it was not a consumer dispute as the Housing Society is not a “consumer” under this act because the relief they are praying for is recovery of the higher amount paid to municipal authority from the builder.

Supreme court after going through section 3 and section 6 of Maharashtra Ownership Flat Regulations held that “Based on these provisions, it is evident that there was an obligation on the respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided” and hence directing the builder to compensate the petitioner in the case for any higher than usual charge they have paid due to his deficiency. On the subject matter of the petition being barred by limitation, the court held that “Since 2014 till date, the respondent has failed to provide the occupancy certificate. Owing to the failure of the respondent to obtain the certificate” taking into account the NCDRC order dated 20.08.2014 where the NCDRC directed the respondent to provide the occupation certificate along with a penalty. The Supreme Court taking a wider view stated that this continuous failure to provide the occupation certificate is a violation of obligation imposed by MOFA and hence this suit is not barred by limitation. The Supreme Court said “the respondent was responsible for transferring the title to the flats to the society along with the occupancy certificate. The failure of the respondent to obtain the occupation certificate is a deficiency in service for which the respondent is liable”. It is a common practice that is seen among builders that they abuse and make a mockery out of the process of law leaving the consumer remediless. This is already a very long process for the consumers and the builders not honouring the court orders even after the judgement is an abuse of process of law and on top of that the builders often have a very good legal team ready on which they invest a lot of money unlike the consumers who have limited resources. Consumer Protection Act should always been seen as an act made for the welfare of the consumers that the Supreme Court did in this case disregarding the orders of NCDRC that rejected the case merely based on technicalities.

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Judgment Reviewed by Meenakshi Jena

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