BUILDER FINED FOR NOT PROCURING OCCUPANCY CERTIFICATE

 

The Occupancy Certificate popularly known as OC, issued by the Local Municipality, stands for the completion of the property as per the approved plan and is fit for occupation and should be in compliance with all concerned laws.

Builder handover the early possession of flats though the OC is not procured, due to which the municipality can either evict or impose penalties. Without the OC, the possession of a flat is illegal.

The OC is an important document for those purchasing flats under the MOFA (Maharashtra Ownership Flat Act) and must be acquired before possession of any property. Consumer Courts will support the purchaser if the said is not done by a Builder.

In recent past, the National Consumer Disputes Redressal Commission directed a Builder to pay excess charges levied on a Housing Society due to the delay in procuring an OC from the Mumbai Municipal Corporation.

A two-member bench of the National Consumer Disputes Redressal Commission directed Manish Vijay Enterprises to pay over Rs 30 lakh to Twin Tower Co-operative Housing Society in Andheri. The Builder has also been asked to pay the Society Rs 1 lakh as litigation cost.

The bench directed that the principal amount be paid with 9 per cent interest from the date the complaint was filed, August 2000, taking the total amount to over Rs 63 lakh.

The Court observed that the Builder was not able to procure an OC from the BMC despite approaching the Bombay High Court as he had committed certain FSI-related violations.

While passing the order, the Court ruled that it is a clear case which would fall in the category of ‘Land under Construction’ as the OC has not been issued yet and that the water connection would consequently be with extra charge. Resultantly, the property tax too would be higher.

The Builder handed over possession of the 145-flat Society in 1989, but could not be able to procure an OC till long time. The Society approached the HC against BMC in 2000. The HC in June 2001 directed the BMC to consider the Society’s request.

However, according to the Society’s complaint, the BMC refused to grant OC to the Builder since there was a ‘Protected’ slum pocket on the Society’s land, effectively meaning that the building had illegally consumed more FSI.

The State Government had notified these slums as ‘Protected’ in 1985. The NCDRC, based on the evidence before it, observed that since the Builder was aware that the slums existed before 1985, not only did he not take any steps to remove them, but he also went ahead and got a development plan approved for the entire plot - including the slum part.

Further, stating that there was a delay in filing the complaint, the Builder argued that the possession was handed over on the insistence of the flat purchasers themselves.

He said the flat purchasers had given an undertaking in 1991 stating that they were ready to arrange for the electricity and water connection themselves and will pay any additional charges required to be paid.

However, the NCDRC observed that since the flat purchasers had already paid the full consideration to the Builder and since the Builder was well aware of the FSI violation done by him, the argument was considered as very devious and unconvincing attempt to escape liability.

 

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