A Supreme Court bench of Justices D Y Chandrachud and A S Bopanna has ruled that the failure of a builder to obtain occupation certificate is a deficiency in service under Consumer Protection Act 1986. The apex court was hearing an appeal against an order of the National Consumer Disputes Redressal Commission, which had dismissed a complaint by a cooperative housing society seeking refund of the higher taxes and water charges paid to the municipal authorities after the builder failed to occupancy certificate.
The NCDRC had dismissed the complaint on the ground that it was barred by limitation and that it was not maintainable since it was in the nature of a recovery proceeding and not a consumer dispute. According to the petitioner, the builder 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, it said.
The society managed to get temporary water and electricity connections but the members of the society had to pay property tax at a rate 25% higher than the normal rate and water charges at a rate which was 1% higher than the normal charge.
“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,” the bench said in a recent order.