In a significant ruling by the Supreme Court of India, a dispute over the Occupancy Certificate has been settled between a society and a development company. The society accused the company of providing deficient services and causing delays in obtaining the Occupancy Certificate. Stay tuned for the details of this case and its implications in the legal realm.
Facts
- The State Commission observed that the Municipal Corporation objections were raised before the flat owners took possession, establishing the legitimacy of the owners’ efforts to obtain Occupancy Certificates.
- The State Commission noted that charges beyond the agreed consideration were collected for possession of flats by the appellants.
- The minutes of the meetings dated 14.12.2003 and 17.12.2003 reflected discussions about BMC expenses and settlements of accounts.
- The National Commission modified the State Commission’s order, directing payment of Rs. 28,00,000 to the respondent-society by appellants and conveyed the title of the property within 4 months after obtaining the Occupancy Certificate.
- The appellants were alleged to have collected money from society members for unfinished works but failed to reimburse it even after a decade.
- The respondent-society complained of multiple deficiencies in services provided by the appellants.
- The meeting concluded amicably with agreements on settlements and expenses.
- The relief sought by the respondent-society included holding appellants guilty of deficiency in service and unfair trade practices under the MOFA Act.
- State Commission partly allowed the complaint and directed appellants to execute Deed of Conveyance after obtaining Completion Certificate and Occupancy Certificate within 90 days.
- If not complied, appellants to pay Rs. 1,000/- per day until compliance.
- Complainants not pressed for refund of Rs. 35,16,820/- loan amount, respondent-society entitled to refund of Rs. 26,25,000/- with 9% interest from date of filing complaint, payable within 90 days.
- No documentary evidence of additional amount of Rs. 46,40,000/- spent on interior civil works.
- Refund of Rs. 26,25,000/- as loan justified based on sample receipts of charges collected for possession of flats.
- Charges collected beyond stipulated agreed consideration under the guise of possession of flats.
- State Commission observed and directed based on record and documentary evidence.
Also Read: Supreme Court Judgement: High Court’s Order Upheld in Case of [Respondent] v. [Petitioner]
Arguments
- Learned counsel for the respondent-society has supported the order passed by the National Commission holding the appellants responsible for deficiency in services and delay in obtaining the Occupancy Certificate.
- The respondent-society contends that the appellants handed over the flats/commercial units without Occupancy Certificate and basic facilities like water and electrical meters, indicating deficiency in services.
- The respondent-society asserts that the building remains in the same condition as at the time of possession handover, with no alterations or constructions by the society members.
- The Occupancy Certificate delay was not due to unauthorized construction by the society members, as claimed by the appellants.
- The National Commission erred in awarding Rs. 25,00,000/- to the respondent-society when it was not the subject of appeal and was previously rejected by the State Commission.
- The complainant society has proven deficient service by the opponents, leading to the complaint partially succeeding for issuing directions to fulfill statutory obligations and refund illegally collected excess amounts.
- Petitioner’s counsel argued that additional constructions were carried out by the members of the respondent-society, leading to the Municipal Corporation withholding the Occupancy Certificate.
- The High Court had previously directed a designated officer to inspect the property for illegal constructions and inform the necessary parties before any demolition.
- The Petitioner referred to a reply letter confirming alterations made by society members as per records.
- The Petitioner claimed that the respondent-society breached their undertaking to remove illegal alterations if requested by the Municipal Corporation.
Also Read: Enhancement of Compensation Awarded in Motor Vehicle Accident Case: Supreme Court’s Judgment
Analysis
- The State Commission ordered the appellant to obtain Occupancy Certificate within 90 days.
- The National Commission upheld the State Commission’s order with certain modifications regarding obtaining Occupancy Certificate and execution of the conveyance deed.
- The National Commission imposed a lump sum compensation of Rs. 3 lakhs for the appellant’s failure to obtain the Occupancy Certificate.
- The National Commission found the appellant liable to repay Rs. 25 lakhs to the complainant society as per their admission in a meeting.
- The National Commission noted that possession of allottees became illegal due to the appellant offering possession without the Occupancy Certificate.
- The National Commission upheld the State Commission’s direction for executing the Deed of Conveyance and obtaining Completion Certificate and Occupation Certificate.
- The National Commission rejected the appellant’s argument regarding obtaining the Occupancy Certificate being difficult due to modifications in the building.
- The National Commission observed that the appellants were negligent in not obtaining the Occupancy Certificate.
- The National Commission directed the appellants to pay Rs. 26,25,000 with interest for possession charges collected illegally.
- The National Commission agreed with the State Commission’s order as it was based on the commitments made by the appellants in meetings.
- The National Commission ordered the appellants to fulfill their commitment of paying Rs. 25,00,000 to the complainant society.
- The National Commission upheld the State Commission’s order on merits without considering technical objections.
- The National Commission held that the appellants were bound to honor their commitment of making payments to the respondent-society.
- Objection to territorial and pecuniary jurisdictions must be raised at the earliest opportunity or at the latest, before settlement of issues.
- Failure to raise objection promptly means it cannot be raised at a later stage.
- Appellants instructed to pay Rs. 28,00,000 to the Respondent Society within 45 days.
- In case of default, the amount will accrue interest at 8% per annum.
- Appellants to pay Rs. 1,000 per day after 60 days until full Occupancy certificate is obtained.
- Appellants have a legal obligation to execute a registered Deed for the property.
- The appellants have not avoided their legal obligation.
- The Municipal Corporation has issued notices regarding alterations made by members of the society.
- The dispute/objection regarding alterations has not been settled yet, with the High Court’s involvement.
- Awarding Rs. 1,000/- per day for delays in conveying the title seems unwarranted.
- No evidence of loss suffered by the society or its members is present on record.
- The direction to pay compensation of Rs. 3,00,000/- cannot be approved in this case.
Also Read: Case on Constitutional Validity of Section 35AC with High Court Dismissal
Decision
- Appellants directed to convey title of property to the complainant Society within four months after obtaining Occupancy Certificate.
- Appellants to complete requisites for Occupancy Certificate within three months; Society to ensure compliance within the same time frame.
- Deed of Conveyance to be executed within two months of completion of all requisites.
- Parties allowed to seek appropriate remedies in case of future grievances.
- Penalty of Rs. 1,000 per day applicable 60 days after this order.
- Appellants relieved from liability to pay compensation of Rs. 3,00,000.
- Waiver of Rs. 50,000 cost imposed on appellants.
- Penalty of Rs. 1,000 per day until obtaining full Occupancy Certificate set aside.
- Cost of Rs. 50,000 upheld.
- Appellants to pay Rs. 25,00,000 to the Society within 45 days with 8% interest p.a. if payment is delayed.
Case Title: M/S TREATY CONSTRUCTION Vs. M/S RUBY TOWER CO OP HSG. SOCIETY LTD.
Case Number: C.A. No.-005699-005699 / 2019
