Mumbai builder told to pay Rs 6 crore to housing society over 20-year delay in occupation certificate
NEW DELHI: The National Consumer Disputes Redressal Commission (NCDRC) has directed a Mumbai builder to pay Rs 6 crore to a cooperative housing society after finding that its members had been living under the continuing risk of demolition for more than 20 years because the developer failed to obtain an occupation certificate.The commission also directed the builder to obtain the occupation certificate within 12 months and pay Rs 10 lakh towards litigation costs. The judgment was pronounced on August 17, 2026.What was the dispute over the housing society’s redevelopment?As per the commission order, Tirupati Devi Cooperative Housing Society, comprising 33 members occupying 25 flats in two wings of Balaji Apartments in Santa Cruz, had entered into a redevelopment agreement with Raja Construction Company on March 14, 2005. Under the agreement, the developer was required to demolish the old buildings, construct new ones and provide flats to the existing members. The developer was also responsible for obtaining the occupation certificate and new water connection.The developer handed over possession of the flats from 2008 onwards. However, the society alleged that it failed to provide the sanctioned building plans, occupation certificate, completion certificate and new water connections.After an RTI application, the members allegedly came to know that the construction did not match the sanctioned plans. The society further alleged that additional construction had been carried out and because of the same the authority denied granting the occupation certificate.The society approached the NCDRC in 2013 seeking compensation for the delay, differences in the flat areas, regularisation charges and the failure to provide the required certificates. However, the builder denied the allegations and argued that the complaint was filed late. It also claimed that some of the flat owners had themselves made illegal changes to their flats and because of that the the occupation certificate was not issued.The commission, however, found that there was no evidence supporting the builder’s claim that the members had carried out illegal construction. It noted that the developer had itself agreed to provide the additional carpet area and had undertaken responsibility for obtaining the occupation certificate and completing the necessary formalities.What did the commission say while holding the builder responsible?The bench comprising President A.P. Sahi and member Bharatkumar Pandya, noted that although the members had received possession of their flats in 2008, the legality of the construction remained in doubt because the construction was in excess of or contrary to the approved plans. It also found that the developer had taken the risk of constructing additional area and had failed to obtain the required approvals.“Though the possession is being enjoyed by the members from 2008 onwards, the legality of the extent of construction and of such possession is in jeopardy in view of the refusal or resistance by the authorities to grant such permission in view of the fact of part of the construction being in excess of or contrary to the approved plan as submitted by the Developer to the authorities,” the commission said.The commission further rejected the builder’s argument that the society members were responsible for the problem. It said the developer had the responsibility of preparing proper plans, carrying out construction according to those plans and obtaining the occupation certificate.“There is no evidence on record and no merit in the contention of the OP that the members have made any illegal construction in their units. It is the OP who promised, constructed and handed over the flats with 20 percent additional carpet area to the original members,” it further added.The commission held that the absence of the occupation certificate had become a continuing problem for the society and its members. It noted that they had been facing anxiety and the risk of demolition for more than 20 years.“In our considered opinion, the non-obtaining of the OC and putting the members under the continuing risk of demolition of the building due to illegality in construction over a longish period of more than 20 years, calls for the compensation at enhanced 1.5 times the stipulated rate, which would be just and fair and would duly take care of the anxiety and mental agony and adversity faced and being faced by the society and its members,” the bench noted.The commission noted that the redevelopment agreement itself provided for compensation of Rs 1 lakh per month if the developer failed to complete the project within 24 months. However, considering the long delay and the continuing risk faced by the members, it increased the compensation rate to 1.5 times that amount for the period from June 2008 to August 2026. This worked out to Rs 3.24 crore, after which the commission added another Rs 26 lakh for the additional hardship and expenses caused by the absence of municipal water connection and additional municipal taxes.The commission then awarded a further Rs 2.5 crore, taking the total compensation to Rs 6 crore. It said the members had been living under a continuing threat of demolition because the occupation certificate had still not been obtained.The builder and its partners were held jointly and severally responsible for the deficiency in service. The commission directed them to pay the Rs 6 crore compensation within three months. If they failed to pay, the amount would carry 8 percent simple interest until full payment.The commission also directed the builder to pay all necessary charges and obtain the occupation certificate within 12 months, and hand it over to the society and its 33 current members. It further directed the builder to pay Rs 10 lakh towards litigation costs within three months.
