Samruddhi Co-operative Housing Society Ltd. Vs Mumbai Mahalaxmi Construction Pvt. Ltd. (Supreme Court of India)
Sections 3 and 6 of the MOFA indicate that the promoter has an obligation to provide the occupancy certificate to the flat owners. Apart from this, the promoter must make payments of outgoings such as ground rent, municipal taxes, water charges and electricity charges till the time the property is transferred to the flat-owners. Where the promoter fails to pay such charges, the promoter is liable even after the transfer of property.
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. The respondent has time and again failed to provide the occupancy certificate to the appellant society. For this reason, a complaint was instituted in 1998 by the appellant against the respondent. The NCDRC on 20 August 2014 directed the respondent to obtain the certificate within a period of four months. Further, the NCDRC also imposed a penalty for any the delay in obtaining the occupancy certificate beyond these 4 months. Since 2014 till date, the respondent has failed to provide the occupancy certificate. Owing to the failure of the respondent to obtain the certificate, there has been a direct impact on the members of the appellant in terms of the payment of higher taxes and water charges to the municipal authority. This continuous failure to obtain an occupancy certificate is a breach of the obligations imposed on the respondent under the MOFA and amounts to a continuing wrong. The appellants therefore, are entitled to damages arising out of this continuing wrong and their complaint is not barred by limitation.
The NCDRC has held that the appellant is not a ‘consumer’ under the provisions of the Consumer Protection Act as they have claimed the recovery of higher charges paid to the municipal authorities from the respondent. Extending this further, the NCDRC has observed that the respondent is not the service provider for water or electricity and thus, the complaint is not maintainable.
Section 2(1)(d) of the Consumer Protection Act defines a ‘consumer’ as a person that avails of any service for a consideration. A ‘deficiency’ is defined under Section 2(1)(g) as the shortcoming or inadequacy in the quality of service that is required to be maintained by law. In its decisions in Wing Commander Arifur Rahman Khan & Others v. DLF Southern Homes Private Limited & Others9 and Pioneer Urban Land Infrastructure Limited v. Govindan Raghavan10, this Court has held that the failure to obtain an occupancy certificate or abide by contractual obligations amounts to a deficiency in service. In Treaty Construction v. Ruby Tower Cooperative Housing Society Ltd.11, the Court also considered the question of awarding compensation for not obtaining the certificate. In that case, the Court declined to award damages as there was no cogent basis for holding the appellant liable for compensation, and assessing the quantum of compensation or assessing the loss to the members of the respondent society.
In the present case, 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. Thus, the members of the appellant society are well within their rights as ‘consumers’ to pray for compensation as a recompense for the consequent liability (such as payment of higher taxes and water charges by the owners) arising from the lack of an occupancy certificate.
For the above reasons, we allow the appeal against the order of the NCDRC dated 3 December 2018 and hold that the complaint is maintainable. We direct the NCDRC to decide the merits of the dispute having regard to the observations contained in the present judgment and dispose the complaint within a period of three months from the date of this judgment.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
