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Property documentation onus lies on builder

By Jehangir B Gai
May 06, 2019 10:56 IST
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The law does not permit a builder to hand over possession under any situation, not even for 'fitout' unless the building completion certificate is obtained, points out Jehangir B Gai.

Photograph: Rupak De Chowdhuri/Reuters

Shree Saidham Co-operative Housing Society, comprising 112 flat purchasers, filed a complaint before the Maharashtra state commission against builder Vaibhav Development Corporation and its partners Nitin Nagraji Mehta and Narendra Shah for failure to comply with various statutory requirements.


The grievance: Flat purchasers were given possession of their respective flats during the period 1994 to 1997, without obtaining the occupation certificate (OC).

This also resulted in having to pay for water at commercial rates.

The builder also failed to form the cooperative for the housing society, and the flat purchasers got it registered on their own at their expenses.

The builder even failed to execute conveyance in favour of the society.

The builder contested the case, questioning the right of the society to file the complaint.

Regarding the failure to obtain the OC, the builder explained that this was on account of the flat purchasers having carried out illegal and unauthorised additions and alterations in their flats although possession was given only for 'fitout'.

The explanation for not executing conveyance was that development work was being carried out in a phased manner, and conveyance would be executed after completion of the entire project.

The commission observed that the agreements for sale were executed between the builder and the flat purchasers who had formed the co-operative society.

So, it held that the society's complaint was maintainable.

che Commission also held that the law does not permit a builder to hand over possession under any situation, not even for 'fitout' unless the building completion certificate (CC) is obtained.

It concluded that handing over possession prior to obtaining the CC constituted a deficiency in service.

The commission also noted that possession was given from 1994 to 1997 while the OC was obtained in June 2016.

So, water charges during this period had to be paid at a commercial rate.

This was held to be a deficiency in service for which the society was entitled to be reimbursed.

The failure to form-and-register the society was held to be a deficiency in service, since the builder had also collected money for it.

Likewise, the failure to execute the conveyance was held to be a breach of a statutory requirement, which too would constitute a deficiency in service.

Accordingly, by its order of January 22, 2019, delivered by S K Kakade for the bench presided over by Usha Thakare, the Maharashtra state commission allowed the complaint.

It ordered the builder to reimburse the excess water charges amounting to Rs 3,408,548 along with 9 per cent interest, and also refund the society formation charges of Rs 112,000 together with 12 per cent interest.

The builder was also ordered to execute conveyance and pay Rs 500,000 towards compensation and Rs 25,000 as litigation costs.

Jehangir B Gai is a consumer activist.

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