NCDRC Directs Builder To Pay Delayed Compensation To Homebuyer Until Occupation Certificate Was Received

National Consumer Disputes Redressal Commission (Commission) bench comprising of Subhash Chandra (Presiding Member) and AVM J. Rajendra (Member) directed builder to pay compensation for the delay to the homebuyer until the date the occupation certificate was received. The homebuyer who took possession in October 2015 filed complaints before the National Commission, claiming delayed compensation from the due date of possession till the date the occupation certificate was received. Occupation Certificate is a document issued by the local authority which serves as proof that a building has been constructed according to sanctioned plans and complies with all necessary safety norms and regulations Background Facts Homebuyer (Complainant) booked a 3 BHK apartment with a servant quarter in the builder's (Respondent) project named Hamilton Heights located in Sector 37, Faridabad. The booking was made on January 15, 2008 for a total consideration of Rs.78,42,825. As per the Buyer's Agreement dated December 30, 2008 the builder was obligated to deliver possession of the apartment within 36 months, i.e., by December 2011. However, the builder failed to meet this deadline and only delivered physical possession in October 2015 which resulted in a delay of four years. Despite the delayed possession, the homebuyer contended that legal possession has yet to be granted as the builder failed to obtain the requisite Occupation Certificate for Tower C from the Director Town and Country Planning (DTCP). Therefore, being aggrieved by the delay, Homebuyer filed two complaints before the National Commission inter alia seeking legal and valid possession, compensation for delay, litigation cost and a concession in the maintenance charges levied by the Builder. Commission clubbed both complaints for common adjudication. Contentions of Builder The builder contended that the homebuyer does not qualify as a "consumer" under the Consumer Protection Act, 1986 because they purchased two flats and are using one flat for commercial purposes. The builder argued that this use of the flat for commercial purposes disqualifies the homebuyer from being considered a consumer under the Act. Builder also contended that the homebuyer's complaint is barred by limitation under Section 24A of the Consumer Protection Act, 1986 as the complaint was filed in June 2017 while the alleged cause of action arose in March 2015. The builder argued that there was a delay of four months beyond the statutory limit of two years. Observation and Direction by National Commission On the issue of the limitation period, the Commission noted that possession was given in October 2015 and the Occupation Certificate was received in August 2023. Since legal possession was not complete without the certificate, the homebuyer had a valid reason to file the complaint. Therefore, the complaint was not barred by limitation. Commission rejected the builder's contention that the homebuyers were not consumers because they had booked two flats and rented out one. Referring to the Supreme Court's ruling in Laxmi Engineering Works vs P.S.G Industrial Institute (1995) and its own judgment in Kavita Ahuja vs Shipra Estate & Jai Krishna Estate Developers Pvt. Ltd. & ors. (2016), the Commission held that merely purchasing multiple units does not automatically indicate a commercial purpose. The Commission held that the homebuyers were entitled to compensation for the delay in possession, as per the Supreme Court's ruling in Wg. Cdr. Arifur Rahman Khan v. DLF Southern Homes Pvt. Ltd. (2020) where it was held that delay in handing over the possession constitutes deficiency of service. Therefore, Commission directed the builder to pay compensation at 6% per annum on the amount paid as of the promised possession date, along with the contractual compensation per sq. ft. per month from due date of Possession to date of obtaining the occupation certificate. On the issue of maintenance charges the Commission held that the charges should apply only from the date of possession and not from due date of possession as levied by the Builder. Lastly, the Commission directed the Builder to pay litigation charges of Rs. 50,000 to the Homebuyer and disposed of both complaints filed by the Homebuyer. Case – Lalita Tanwar & anr Versus Hamilton Heights Pvt. Ltd. & anr A/W 1 Other Citation – Consumer Complaint No. 1852 Of 2017 A/W 1 Other Date – 23rd January, 2025 Click Here To Read/Download The Order

NCDRC Directs Builder To Pay Delayed Compensation To Homebuyer Until Occupation Certificate Was Received

Aryan Raj

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NCDRC Directs Builder To Pay Delayed Compensation To Homebuyer Until Occupation Certificate Was Received

Aryan Raj

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INR 1099+GST

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