The Supreme Court in the case of Samruddhi Co-operative Housing Society Ltd. v/s Mumbai Mahalaxmi Construction Pvt. Ltd. ruled that failure of a builder to obtain the occupation certificate is a deficiency in service under Consumer Protection Act.
The appellant is a co-operative housing society. The respondent constructed Wings ‘A’ and ‘B’ and entered into agreements to sell flats with individual purchasers in accordance with the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963. According to the appellant, the respondent failed to take steps to obtain the occupation certificate from the municipal authorities. In the absence of the occupation certificate, individual flat owners were not eligible for electricity and water connections. Due to the efforts of the appellant, temporary water and electricity connections were granted by the authorities. However, the members of the appellant had to pay property tax at a rate 25% higher than the normal rate and water charges at a rate which was 50% higher than the normal charge.
Mr Sunil Fernandes, counsel for the appellant, urged that the respondent has failed to provide the occupancy certificate. Due to the failure of the respondent to obtain the occupancy certificate, the members of the appellant have had to pay a 25% higher amount on account of the property tax and an additional 50% towards the water charges.
Mr Atul Babasaheb Dakh, appearing on behalf of the respondent, contended that the members of the appellant society took possession of their flats to refurbish the interiors and to make suitable arrangements till the occupancy certificate was issued. Instead, they started occupying the premises and made arrangements for water and electricity by paying additional charges. The members of the appellant made unauthorized constructions due to which there was a delay in obtaining the occupancy certificate.The complaint is barred by limitation as the cause of action arose in 1997 and the complaint was filed 18 years later.
The division bench of Justice Dr Dhananjaya Y Chandrachud and Justice AS Bopanna noted that 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.
The court while allowing the appeal held that the complaint is maintainable and directed the NCDRC to decide the merits of the dispute having regard to the observations contained in the present judgment and dispose of the complaint within a period of three months.