Consumer Protection: Builder's failure to get OC is deficiency in service

The State Commission observed that a builder is statutorily obliged to obtain the completion and occupancy certificates before offering possession to buyers

Hitesh Aniruddha Wasnikar was interested in booking a flat in a project called “Versatile Valley” undertaken by Versatile Developers at Village Nilje in Thane District.

 

Since Wasnikar was informed that construction was in progress and possession would be handed over by June 2020, he decided to purchase flat no. 1906, D-Wing, 19th floor, having a carpet area of 55.76 sq. metres. The total consideration agreed upon was ₹54,50,000. The parties executed an agreement for sale of this flat on January 4, 2020, which stipulated that the developer would give possession on or before November 30, 2020.

 

Wasnikar paid ₹53,41,595 in instalments as and when demanded, with only the balance 2 per cent amounting to ₹1,08,405 payable at the time of legal possession. However, the project was not completed. Neither the completion certificate nor the occupancy certificate was obtained from the competent authority. So the developer offered possession through a proforma possession letter dated June 11, 2023, sent through WhatsApp. Wasnikar refused to take possession as it is illegal to do so in the absence of an occupancy certificate (OC).

 

Wasnikar filed a complaint before the Maharashtra State Consumer Disputes Redressal Commission (State Commission) against Versatile Developers through its partner Anand Mulraj Thakkar, in which he alleged deficiency in service. He pointed out that the builder had suppressed information about the pendency of a writ petition in the Bombay High Court filed in 2018 in respect of a dispute regarding the open land tax dues demand raised by the Kalyan Dombivli Municipal Corporation. This suppression violated the mandatory disclosures and information to be furnished under Section 3(2)(j) of the Maharashtra Ownership Flats Act, 1963.

 

Wasnikar stated that in view of the builder’s failure to hand over timely legal possession of the flat, he had to continue to reside elsewhere on a leave-and-licence basis for which he had to pay a monthly licence fee of ₹23,100. He also pointed out that simultaneously he was also liable to pay EMIs for the loan taken from HDFC Bank for purchasing the flat, and had already paid about ₹20 lakh for the period after the promised date of possession.

 

Prior to filing the complaint, Wasnikar had also sent a legal notice on June 18, 2024 demanding a refund of the amount paid by him along with interest and other charges. He followed this with reminder e-mails, but the builder ignored all of them.

 

The State Commission issued notice to the builder, who failed to appear or file any reply to contest the case. Hence, the Commission heard the dispute ex parte.

 

The State Commission, in its order of July 31, 2026 delivered by Poonam Maharshi for the Bench presided over by her along with Dr. Nisha Chavan, observed that there is a statutory obligation requiring a builder, promoter, or developer to obtain the completion certificate and occupancy certificate, and failure to do so constitutes a deficiency in service. It relied on the law the Supreme Court has laid down in several cases, including its latest decision in Dharmendra Sharma vs Agra Development Authority.

 

The State Commission also indicted the builder for having engaged in unfair trade practice. It ordered the developer to refund the entire amount of ₹53,41,595 paid for the flat along with 12 per cent interest. It also awarded ₹2 lakh towards compensation, and ₹25,000 as litigation expenses. The Commission gave two months for compliance, and in case of delay, the interest rate would rise to 15 per cent for the period of delay.

 

The author is a consumer activist