Builder Can't Levy Maintenance Charge On Flat Purchasers Without Obtaining Occupancy Certificate: NCDRC

The National Consumer Disputes Redressal Commission (NCDRC) has recently held that in the absence of obtaining an occupancy certificate, maintenance on the project cannot be charged from the buyers.Presiding Member S.M. Kantikar and Member Binoy Kumar directed the builders to pay a delay compensation at the rate of 9% per annum from the proposed date of possession, including the grace period of six months. BackgroundA consumer complaint was filed under Section 21(a)(i) read with Section 12(1)(c) and Section 13(6) of the Consumer Protection Act, 1986 read with Order 1 Rule 8 of the Code of Civil Procedure. The consumer represents 11 complainants who were allotted flats in the opposite party's project (hereinafter referred to as 'project'). The opposite party is engaged in the construction business.The complainant's case had applied for the allotment of flats in the project, which consisted of a total of 70 units. The complainants averred that they booked their residential flats and were allotted incomplete possession of apartments without obtaining an Occupancy Certificate and the promised amenities. Furthermore, without the occupancy certificate, the opposite party has started levying maintenance charges and advance maintenance on the complainants, violating the construction agreement. Advocates Chandrachur Bhattacharyya and Manoj Kumar Dubey, representing the complainants, argued that till the occupancy certificate is obtained, the maintenance of the project is to be undertaken at the cost and expense of the opposite party. On the other hand, the opposite parties averred that the project was delayed due to changing market conditions and the escalation cost caused by the COVID-19 pandemic. In lieu of the same, a delay penalty was also paid in February 2020. Advocates Prabha Swami along with Nikhil Swami and Diva Swami, representing the opposite parties, argued that on completion of construction of the unit, the Complainants began to pressurize them to execute the sale deed. Despite being advised against it, they took possession of their flats. Findings of the Commission The NCDRC, after perusing the complaint and written submission, observed that there had been an unreasonable delay on the part of the opposite party in completing the construction. It also noted that the complainants had paid a substantial amount of total consideration of their respective flats. It observed that within the stipulated period of 22 months, plus an additional six-month grace period, the Opposite Party failed to construct the project and has not obtained the Occupancy Certificate to date. It held, "Therefore, we are of the considered view that the Complainants are entitled to get fa·ir delay ·compensation. Further, not obtaining an Occupancy Certificate to date is a serious deficiency of service."The Court referred to the Supreme Court decision in Wg. Cdr. Arifur Rahman Khan v. DLF Southern Homes Pvt. Ltd., where it held, "Flat purchasers suffer agony and harassment, as a result, ·of the default of the developer. Flat purchasers make legitimate assessments in regard to the future· course of their lives based on the flat which has been purchased being available for use and o·ccupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfillment of a contractual obligation."Further, to decide a reasonable interest rate in the present times, the Commission relied on the apex court decision in Grace Realtech Pvt. Ltd. v. Abhishek Khanna & Anr. It emphasized the balancing of competing interests while deciding the rate of interest. Following this, the Commission directed that a delay compensation of 9% is reasonable and justified in the present matter. It opined against the question of charging maintenance charges till the receipt of the occupancy certificate. It noted that the complainants would be liable to pay maintenance charges only after the Occupancy Certificate is received.Case Title: Madhusudan Reddy R. & Ors v. VDB Whitefield Development Pvt Ltd. & Ors.Also Read - Builder's Failure To Obtain Occupation Certificate Is A 'Deficiency In Service' Under Consumer Protection Act: Supreme Court Click Here To Download The Order Read The Order

Builder Can't Levy Maintenance Charge On Flat Purchasers Without Obtaining Occupancy Certificate: NCDRC

Shrutika Pandey

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