NCDRC Holds Motia Developers Liable For Deficiency In Service Due To Failure To Obtain Occupancy Certificate

Brief Facts of the Case

The complainants made an initial booking of a flat with Motia Developers for a payment of Rs 1,00,000, followed by payments of Rs. 3,69,825 and Rs. 15,00,000 shortly after. An allotment letter was issued and a Buyer's Agreement was signed on the same day. By June, the complainants had paid the full sale amount. However, in April the next year, the developer requested the complainants to complete a preliminary inspection and finalise the possession date but ceased payments of Rs 33,930 per month, which was part of the 12% assured return agreed upon earlier. The complainants claimed they could not take possession as the unit was incomplete and requested the developer to resume the assured returns. Aggrieved, the complainant filed a complaint before the State Commission of Punjab, which allowed the complaint. It directed the developer to pay the complainant a 12% along with Rs 22,000 in litigation costs. Consequently, the developer appealed before the National Commission.

Contentions of the Developer

The developer contended that the complainants were not considered "consumers" under the Act as they booked the unit for investment purposes. They raised preliminary objections regarding the State Commission's territorial and pecuniary jurisdiction and claimed that a joint complaint was filed without permission. Additionally, they stated that the 12% assured return totaling Rs 3,84,761 had been paid until the offer of possession.

Observations by the National Commission

The National Commission observed that the State Commission rightly overruled the preliminary objections. Under the Buyer's Agreement, possession was to be handed over within 36 months, with an extended period of 12 months, but the offer of possession was invalid as construction was incomplete. Citing Section 14 of the Punjab Apartment and Property Regulation Act (PAPRA), the Commission held that the developer failed to obtain a Completion and Occupation Certificate, as required under law. Relying on cases like Vision India Realtors Pvt. Ltd. vs. Sanjeev Malhotra, the Commission concluded that the offer of possession without valid certification amounted to mere “paper possession.” The Commission also referred to Emmar MGF Land Pvt. Ltd. vs. Krishan Chander Chandna and Wg Cdr Arifur Rahman Khan vs. DLF Southern Homes Pvt. Ltd., emphasizing that possession without proper certification constitutes a deficiency in service.

Therefore, the iNational Commission upheld the State Commission's order and dismissed the appeal.

Case Title: M/S. Motia Developers Private Limited Vs. Priya Bose Chanda & Anr

Case Number: F.A. No. 74/2021

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