Failure To Obtain Occupancy Certificate Amounts As Deficiency In Service: NCDRC

Brief Facts of the Case

The complainant, a senior citizen applied for a 3BHK flat (1350 sq. ft.) in the “HillView Garden Housing Complex” by Trehan Home Developers/builder paying a booking amount of Rs. 2,50,000. The builder assured the registration of the flat at the bare built-up cost of Rs. 17,95,500 plus other accessories. Subsequently, the builder demanded a third instalment of Rs. 2,41,159 with interest for delay in payment. The complainant's problem arose when, the builder provided possession of a somewhat larger flat (1389 sq. ft.) and requested additional money for the additional area without the complainant's permission, which was deemed improper. Additionally, the title conveyance was done without the compulsory Completion and Occupancy Certificates. Moreover, the builder asked Rs. 50,000 for covered parking which is also not a common area according to the complainant. Aggrieved, the complainant filed a complaint before the State Commission of Rajasthan, which allowed the complaint. It directed the builder to pay compensation of Rs.1,50,000 for not furnishing the occupancy certificate and completion certificate along with Rs.25,000 as cost of proceedings. Dissatisfied, the complainant appealed before the National Commission.

Contentions of the builder

The builder contended that the complainant cannot be termed as a 'consumer' under the CPA as he had sought for transfer of title of the flat to his wife and his name was deleted from the records of property. The builder also pointed out another clause in the agreement made with the flat buyers, to the effect that the super area of the flat was provisional. The agreement signed mandated the buyer to pay for any increase in area without being charged interest in case of a decrease, which the complainant agreed to by signing the agreement. Additionally, the builder contended that the maintenance terms were laid down in the contract, including the change in the future and the fees that the complainant would have to pay. Hence, the builder asserted that there was no unfair trade practice.

Observations by the National Commission

The National Commission observed that the key issue was whether the builder had shown a deficiency in service. Having considered the evidence, it was found that the complainant had paid for the flat but was given possession before the occupancy certificate was issued. The builder didn't furnish the necessary certificates despite several reminders affecting the complainant in one way or another. Referring to the case of Samruddhi Co-Operative Housing Society Ltd. v. Mumbai Mahalaxmi Construction Pvt. Ltd., the deficiency in service was held where the occupancy certificate was not obtained. Regarding the growth of the super area of the flat, the commission pointed out that changes in the super area were allowed by the Flat Buyers Agreement, and any additional payment for the increase was legal. However, it was held that charging of Rs. 50,000 for covered parking was unfair and amounting to a breach of contract and the builder was ordered to return this amount with interest. The commission also cited the case of DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, in which the court held that it would be unfair to award compensation for the same deficiency more than once.

The National Commission modified the State Commission's order, directing the builder to pay 6% interest on the deposited amount from the possession date until the occupancy certificate was obtained. The builder was also required to refund the Rs. 50,000 parking charge with 6% interest and provide the occupancy certificate if not already done. Additionally, the Rs. 1,50,000 compensation awarded earlier was set aside, and the builder was ordered to pay Rs. 25,000 as litigation costs.

Case Title: Major (Retd) J S Yadav Vs. Trehan Home Developers Pvt. Ltd

Case Number: F.A. No. 959/2019

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