Builder liable for defects despite society formation, consumer panel rules

Regarding limitation, the State Commission relied on Clause 7.4 of the agreement, which provided for the removal of defects noticed within five years

Mariyam and her husband, Thomas, booked a flat at Rizvi Cedar in Malad East, which Rizvi Estates and Hotels Pvt. Ltd. was constructing. The developer gave them possession of the flat on June 1, 2021, and assured them that it would promptly attend to any defect or complaint. 

Soon after taking possession, they noticed several defects, including cracks in nine places and heavy leakage at multiple locations. The developer had also failed to provide the advertised amenities, such as a solar electricity generation and backup system. 

The couple approached the developer, who did nothing to resolve their grievances. They photographed the defects and sent the pictures by email on September 11, 2021, requesting the builder to take corrective action. Since the developer did not respond despite reminders, the couple had to carry out some emergency repairs themselves. During the repairs, they discovered that the developer had not used cement plaster in their flat and had used plaster of Paris instead. 

The couple filed a consumer complaint before the Maharashtra State Consumer Disputes Redressal Commission (State Commission). They relied on a clause in the agreement stating that the developer would rectify, at its own cost, any defect in workmanship or structural defect reported within five years of the date of possession. The couple argued that the failure to remove the defects constituted a deficiency in service and an unfair trade practice. 

The main plank of the developer’s argument was that the complaint was time-barred because the couple had filed it more than two years after taking possession and noticing the defects. The developer also argued that the couple could no longer be considered consumers after taking possession of the constructed flat. The builder further contended that it could not be held liable because it had no control over the property after the formation of the co-operative housing society, which was now responsible for the building’s maintenance and upkeep. The developer claimed that the Commission should dismiss the complaint because the couple had not impleaded the society in the proceedings, even though it was a necessary party for the proper adjudication of the complaint. The builder also argued that no other flat purchaser had filed a complaint and that the couple had failed to produce any expert opinion regarding the defects. It therefore claimed that the complaint was false. 

Regarding limitation, the Commission relied on Clause 7.4 of the agreement, which provided for the removal of defects noticed within five years. It held that substandard plastering, leakage and the failure to provide the advertised amenities such as solar electricity backup, noticed during this period, constituted breaches of the contractual warranty and gave rise to continuing cause of action. It therefore held that the complaint was within the limitation period. The State Commission also observed that the mere formation of a co-operative housing society would not absolve a builder-developer of its liability to rectify construction defects. 

Accordingly, in its order dated July 30, 2026, delivered by Dr Nisha Amol Chavan for the Bench headed by Poonam Maharshi, the Commission allowed the complaint. It ordered the builder either to rectify the defects or pay a reasonable lump-sum amount of ₹1,50,000 towards repair and material costs. In addition, it awarded ₹50,000 as compensation for mental agony and harassment and ₹25,000 towards litigation costs. 

  The writer is a consumer activist