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Failure of builder to obtain occupancy certificate is deficiency in service: Supreme Court

The top court was dealing with a case where purchasers had bought properties being developed by the respondent-builder in 1993, of which possession was granted in 1998. However, since there was no occupancy certificate obtained by the builder, the water and property tax charges were substantially higher than the market rate.

They had first moved the State Consumer Dispute Redressal Commission (SCDRC) seeking the occupancy certificate and compensation. The SCDRC directed the builder to obtain the occupancy certificate within three months, and also ordered it to pay the excess charges incurred by the residents.

Upon non-compliance, the society members moved the National Consumer Disputes Redressal Commission (NCDRC) seeking not only enhanced compensation for mental agony but also excess charges.

However, the NCDRC dismissed the plea stating that it was barred by limitation since the cause of action arose at the time when the appellant made efforts to obtain individual water and electricity connections and the municipal authorities ordered the members to pay higher charges. The complaint should have been filed within two years of the accrual of the cause of action, the NCDRC said.

On the merits of the plea, the NCDRC said that the residents were not “consumers” under the Consumer Protection Act, since the builder was not liable to provide water and electricity but it was the municipal authorities which were responsible for the same.

The NCDRC judgment was in appeal before the Supreme Court.

Source: Barandbench

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