REPORTABLE   

       IN THE  SUPREME COURT OF INDIA                          CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO  5699  OF 2019 (Arising out of SLP(Civil) No. 13984 of 2018)

M/s Treaty Construction & Anr.      APPELLANT(S)

Vs.

M/s Ruby Tower Co-op. Hsg. Society Ltd.    RESPONDENT(S)

JUDGMENT

Dinesh Maheshwari, J.

Leave granted.

2. This  appeal  by  special  leave  is  directed  against  the  judgment  and

order  dated  07.03.2018,  as  passed  by  the  National  Consumer  Disputes

Redressal Commission (‘the National Commission’ hereafter) in First Appeal

No. 109 of 2015, whereby the National Commission has modified the order

dated 17.12.2014,  as passed by the State Consumer Disputes Redressal

Commission,  Maharashtra,  Mumbai  (‘the  State  Commission’  hereafter)  in

Complaint Case No. 120 of 2005; and has issued directions to the effect that:

(i)  the  appellants  shall  pay  a  sum of  Rs.  28,00,000/-  to  the  respondent-

society (the complainant) within a period of 45 days, failing which the amount

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shall carry interest @ 8% per annum from the date of passing of the order till

the date of payment; (ii) a sum of Rs. 1,000/- per day shall further be paid by

the appellants after 60 days from the date of order till the time full Occupancy

Certificate is obtained; (iii) the appellants shall convey the title of the property

in question by executing a registered Deed in terms of the order passed by

the  State  Commission  within  a  period  of  4  months  after  obtaining  the

Occupancy Certificate. The National Commission has also upheld costs of

Rs. 50,000/-, payable by the appellant No.1 herein.  

3. The background aspects of the matter, so far relevant for the present

purpose, may be noticed, in brief, as follows:

3.1. The  appellants  had  evolved  the  scheme  of  constructing  a  building

consisting of 64 flats and 13 shops on a plot bearing Survey No. 22, Hissa

No. 7 [C.T.S. Nos. 99, 99 (1 to 16) and 114] at Sahakar Road, Off. S.V.Road,

Jogeshwari (West) Mumbai. The persons who agreed to purchase respective

flats and shops in the said project eventually formed a Co-operative Housing

Society,  who  is  the  respondent  in  this  appeal  (‘the  respondent-society’

hereafter).  In  relation  to  the  project  in  question,  several  disputes  ensued

between the members of respondent-society on one hand and appellants-

builders on the other, leading to a complaint before the State Commission,

being Complaint No. 120 of 2005 by the respondent-society1.   

1 Apart from the present appellants, several other persons were also joined as opposite  parties in the said complaint case who have since been deleted from the array of  parties.

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3.2. The respondent-society submitted before the State Commission, inter

alia, that several sale deeds were executed between the period 1994 to 2002

whereby, its members purchased certain apartment units as also commercial

units of varied sizes but, despite making payment over and above the agreed

sale consideration, the appellants failed to discharge their part of the contract

inasmuch as the interior works remained incomplete; and the appellants also

failed  to  obtain  the  Completion  Certification  as  also  the  Occupancy

Certificate.  It was also alleged that pending completion of the building works,

the  appellants  borrowed  and  collected  varied  sums  of  money  from  the

members of the respondent-society, on the pretext that the money would be

used towards finishing the incomplete works; and this aspect was recorded in

the minutes of the meeting held on 12.07.1998.

3.2.1. It  was  further  alleged  that  after  some  time,  the  respondent-society

demanded reimbursement of the amount given by its members; and though

the  appellants  agreed  to  reimburse  a  lump  sum  of  Rs.  25,00,000/-  on

17.12.2003 but, even after a lapse of about a decade, the appellants had

failed to reimburse the amount; failed to obtain the Occupancy Certificate;

and  also  failed  to  complete  the  pending  works  to  the  satisfaction  of

respondent. It was yet further alleged that as an added burden, upon taking

possession of their individual units, the members of respondent-society had

to spend additional sums of money to complete the interior works in their

respective flats and the building; and had also to pay excess of taxes under

various  heads.  Thus,  according  to  the  respondent,  there  was  a  clear

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deficiency  of  services  on  the  part  of  appellants  and  there  was  a  clear

violation  of  Sections  4  and  11  of  The  Maharashtra  Ownership  Flats

(Regulation of the Promotion, Construction, Sale, Management and Transfer)

Act, 1963. ('MOFA').

3.2.2. With  the  submissions  aforesaid,  the  respondent-society  sought  the

following reliefs before the State Commission in the complaint:

"a)  To  hold  and  declare  the  Opposite  Parties  guilty  of deficiency in service as well as unfair trade practice under the provision of the said Act.

b)  To  direct  the  Opposite  Parties  to  convey  the  said land/property  in  favour  of  the  Complainant's  Society  by completing all requisites formalities at their own expenses.

c) To direct the Opposite Parties to handover the Completion Certificate,  Occupation  Certificate,  to  the  Complainants' realization of the same.

d) To refund the amount collected towards temporary loan to the  tune  of  Rs.  35,16,820/-  to  the  Complainants'  Society along with the interest @ 21% from the date of payment till the realization of the same.

e) To refund the amount collected toward possession Charges to the tune of Rs. 26,25,000/- to the Complainants' Society along with the interest 21% from the date of payment till the realization of the same.

f)  To direct  the opposite  parties  to  reimburse the expenses incurred  by  the  Complainant's  Society  'to  the  tune  of  Rs. 46,40,000/- towards the completion of interior civil work along with  the  interest  21%  from  the  date  of  payment  till  the realization of the same.

g) To direct the Opposite Parties to develop the garden on the plot reserved for the same.

g) (sic) That the Hon'ble Forum may be pleased to direct the Opposite Party to pay an amount of Rs. 2,00,000/- towards compensation mental agony and cost of the above numbered

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Complaint and further an amount of Rs. 1,00,000/- towards incidental expenses incurred by the Complainant.

h)  For  such  other  and  further  reliefs  as  the  nature  and circumstances of the case may deem fit and proper."  

3.3. The appellants filed their separate counter versions to the complaint

aforesaid.  Apart  from  stating  that  the  claim  of  the  respondent  was

exaggerated, they also contended that there was a clear admission of the

fact  that  the  appellants  had  undertaken  to  reimburse  a  sum  of  Rs.

25,00,000/- towards full and final settlement of the grievances raised by the

respondent,  and  the  said  amount  was  to  be  realized  by  consuming  the

unconsumed FSI available on the said plot of land, as per the stipulations

incorporated  in  the  registered  agreement  for  sale,  which  fact  had  been

concealed by respondent. The appellants further submitted that the delay

was  not  on  their  part  but  had  been  due  to  the  obstruction  caused  and

created  by  the  respondent  and  its  members  who,  after  purchasing  their

respective flats, had made illegal constructions/alterations, which had clearly

been  brought  out  in  the  show-cause  notices  issued  by  the  Municipal

Corporation. The appellants also denied the contention of the respondent

that the members completed their respective interior civil works.   

3.4. During the course of hearing of the matter and pending disposal of the

complaint,  the  respondent-society  filed  an  application  dated  21.03.2013

before the State Commission with the submissions that the prayer (d) of the

complaint was not pressed; the amount claimed in prayer (f) was restricted to

Rs. 25,00,000/-; and that although there was no illegal alteration by the flat

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purchasers,  yet  the  complainant  was  agreeable  to  remove  the  same  as

required by the Municipal Corporation. The respondent-society stated in this

application as under:

"1)  That  the  complainant  is  not  pressing  the  prayer  of  Rs. 35,16820/-  [claimed  in  prayer  (d)  i.e.  temporary  loan] alongwith interest 21% interest.

2)  That  the  complainant  is  restricting  the  prayer  10(f)  to amount of Rs. 25,00,000/- as per the minutes of meeting dtd 17/12/03 & 14/12/03 which was signed by both the parties.

3) That the complainant says that there is no illegal alteration made  by  the  flat  purchasers.  However,  the  complainant consent to remove the same (if any) as required by BMC."

3.4.1. At  this  juncture,  for  their  relevance,  we  may  also  take  note  of  the

minutes  of  the  aforesaid  meetings  dated  14.12.2003  and  17.12.2003  as

under:-

“Minutes  of  meeting  held  with  Ruby  Tower  Members  on 14/12/03

1. It was discussed that BMC expenses upto procuring of Occ. Certificate will be that of the Builders which the Builders have agreed.

2. Regarding  the  settlement  of  accounts  for  which  the Builders had offered Rs. 15,00,000/- in the last meeting held, the members offered Rs.  25,00,000/-,  subject  to  the above condition  as  full  and  final  settlement  towards  all  loans, liabilities, etc of the Builder.

3. It was finalized that another meeting would be held on Wednesday i.e. 17/12/03 after Namaz-e-Isha at 9:00 p.m.

4. It  is  agreed that  henceforth transfer  charges of  Ruby Tower will be of the Ruby Tower Soc. (Prop).

5. The  meeting  held  was  concluded  in  a  cordial atmosphere and all  present  Society  members  have happily agreed to this proposal.”

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“Date: 17.12.2003

Minutes of the meeting held with members of Ruby Tower

01. As decided on 14.12.03, the meeting for finalizing the settlement  of  all  pending  dues/liabilities  of  the  Builder  was conducted at 9.30 p.m. at the Builder’s office.

2. The Builders agreed to the demand of Rs. 25,00,000.00 raised by the members in the last meeting. However, it was clarified  that  the  first  priority  would  be  that  of  regularizing ‘Ruby Tower’ with respect to BMC.

3. Regarding  payment  of  the  agreed  amount  of  Rs. 25,00,000/-,  it  was  proposed  by  the  Builder  that  he  would arrange for  the same within  six  to  nine  months,  which the members agreed.

4. It  was  clarified  by  the  present  members  that  their decision  was  binding  on  all  the  members  and  all  had authorized the members present to finalize the matter in the meeting held among themselves on 16.12.03.

5. The meeting concluded in a cordial atmosphere. ”

3.5. On  consideration  of  the  material  on  record,  the  State  Commission

observed that the Municipal Corporation had raised the alleged objections by

their  letter/notice  dated  09.07.1993  whereas  the  flat  owners  were  put  in

possession  somewhere  between  1995  to  2002;  that  the  Society  was

established  in  the  year  2005;  and  the  frantic  efforts  made  by  the

owners/members  of  respondent-society  for  execution  of  the  Deed  of

Conveyance and for obtaining Occupancy Certificate was just and legitimate.

The State Commission further observed that the respondent had produced

certain sample receipts to show that charges amounting to Rs. 26,25,000/-

were collected for handing over possession of the flats and such charges

were  collected  beyond  the  stipulated  agreed  consideration.  The  State

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Commission,  however,  found that  there was no documentary  evidence to

show that the additional amount of Rs. 46,40,000/-  was spent to complete

the interior civil works.  

3.6. In  view  of  its  findings,  the  State  Commission  partly  allowed  the

complaint while directing the appellants to execute the Deed of Conveyance

of  the property  in  question  after  obtaining the Completion  Certificate  and

Occupancy Certificate within 90 days and else, to pay Rs. 1,000/- per day

until the date of compliance. The State Commission also observed that the

complainants  had  not  pressed  for  refund  of  the  loan  amount  of  Rs.

35,16,820/- and, therefore, the respondent-society was held entitled only for

the  refund  of  the  amount  of  Rs.  26,25,000/-,  which  was  given  to  obtain

possession of the flat, together with interest @ 9% p.a. from the date of filing

of the complaint and payable within 90 days, failing which the said amount

shall bear an interest @ 12% p.a.  

3.7. The State Commission, inter alia, observed and directed as under:-

“[8]. On  going  through  the  record  and  documentary evidence relied upon by parties, we find that the prayer for refund of Rs. 26,25,000/- which was extended as loan by the complainant  society  members  is  justified  as  few  sample receipts showing the charges collected for handing over the possession of flats. On carefully going through the terms and conditions of  the registered agreement,  it  appears that the opponents have collected these charges under the guys (sic) of  possession  of  the  flats  beyond  the  stipulated  agreed consideration.  Therefore,  we  find  that  complainants  are entitled to get refund of an amount of Rs. 26,25,000/- since it was illegally collected by the opponents from the flat buyers of the complainant society. Complainants have not pressed refund of  Rs. 35,16,820/- allegedly extended as temporary

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loan  to  the  opponents  for  completion  of  balance  work. Therefore, we do not want to comment further. There is not documentary evidence to demonstrate that Rs. 46,40,000/- were  incurred  by  the  complainant  society  to  complete  the interior civil works. Therefore, we are not inclined to consider this  monetary  claim.  The  registered  agreement  does  not provide for development of garden. Therefore, prayer beyond the  stipulations  of  agreement  cannot  be  considered  as pleaded by the learned counsel of the opponents.

[9].   Considering  facts  and  circumstances  of  the  case, opponents have failed to comply their  statutory obligations u/s. 11 of the MOFA Act to execute the deed of conveyance and obtain Completion Certificate and Occupation Certificate. Therefore, the complainant’s prayer seeking directions to the opponents to fulfill statutory obligations are just and proper. Complainant society has discharged initial  burden to prove deficient  service  rendered  by  the  opponents.  Therefore, complaint  must  succeed  for  issue  of  directions  to  the opponents  to  fulfill  the  statutory  obligations  and  refund  of illegally collected excess amount from the members of the complainant society.

ORDER    

(1)   Complaint is partly allowed.

(2)  Opponents,  jointly  and  severally,  are  directed  execute Deed of Conveyance, by obtaining completion certificate and occupation certificate for transferring rights, interest and title of building and piece of land bearing Survey No. 22, Hissa No. 7, and bearing C.T.S. Nos. 99, 99(1 to 16) and assessed by Municipal Corporation of Greater Bombay in Ward No. KN 150512-00 No.  K-5125 (1-2)  89A,  90,  K-5125 (3)  898,  K- 5126 (1), 88 and K-5126 (3) 8890, in favour of complainant society within period of 90 days from date of the this order, failing which opponent shall pay Rs. 1,000/- per day to the complainant  society  from  the  date  of  this  order  till compliance.

(3) Opponents, jointly and severally, are directed to pay Rs. 26,25,000/-  [amount  illegally  collected  for  hading  over  the possession  of  the  flats]  along  with  interest  @  9%  p.a. effective from the date of filing of complaint i.e. 04/10/2005 within period of 90 days from the date of this order, failing which the rate of interest shall be payable @ 12% p.a. from 04/10/2005 till its realization.

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(4) Opponents shall bear their own costs and pay costs of Rs. 50,000/- to the complainant society within period of 90 days from the date of this order.

(5) Certified copies of this order be furnished to the parties”.   

3.8. In  appeal  against  the  order  of  the  State  Commission  before  the

National Commission, the appellants denied the receipt of loan amount of

Rs.  26,25,000/-  and  argued  that  the  deletion  of  the  name  of  the  then

President of the respondent-society, who was a signatory to all the receipts,

was not warranted, as his presence would have clarified all the issues which

formed the subject-matter of the complaint; and that due to the failure on the

part of the respondent-society to remove the changes/alterations made to

the  building,  the  Municipal  Corporation  refused  to  issue  the  Occupancy

Certificate. It was also argued that the State Commission had no pecuniary

jurisdiction in relation to the complaint in this matter.

3.9. The  National  Commission  rejected  the  contention  that  the  State

Commission had no pecuniary jurisdiction for the reason that the same was

not  urged before  the State  Commission  and the  matter  was decided on

merits. The National Commission examined the record and found that there

was absolutely no evidence on record to show that the alleged money was

taken by the appellants for the purpose of completing the pending works in

the  building.  The  National  Commission,  however,  observed  that  having

agreed  to  pay  a  sum  of  Rs.  25,00,000/-  to  the  respondent-society,  the

appellants were bound by the admission so made by them and were liable

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to that extent. As regards the arguments relating to Occupancy Certificate,

the National Commission was of the view that the appellants were negligent

and there had been deficiency in service inasmuch as the appellants should

not  have  handed  over  possession  of  the  flats  without  obtaining  the

Occupancy  Certificate.  However,  for  the  purpose  of  regularizing  and

legalizing the title of the members of respondent-society, it  was preferred

that a time bound order be made and, accordingly, the National Commission

upheld  the  order  passed  by  the  State  Commission  with  certain

modifications.

3.10. The National Commission, inter alia, observed, held and directed as

under:-

“10. I have carefully considered the arguments of both the learned counsel and have examined the material on record. Basically I agree with the contention of the learned counsel for  the  appellant  that  all  the  receipts  were issued by  the President of the Society and he has been deleted from the array of the parties on the request of the complainant and therefore, there is no proof that the money has been paid to the appellant. The State Commission has ordered only on presumption.  Thus,  the  OP/appellant  herein  cannot  be saddled with the responsibility to refund the amount of Rs. 26,25,000/- to the complainant as loan repayment. However, this is also true that the appellant has admitted that he had agreed in the meeting dated 17.03.2003 to pay Rs. 25 lakhs to the complainant for the deficiency in service. Clearly this amount has not been paid by the OP to the complainant and therefore, the appellant No. 1 is liable to pay Rs. 25 lakhs to the complainant as per his own admission in the list of dates filed along with the present appeal.

11. So  far  as  the  question  of  obtaining  the  Occupancy Certificate is concerned, as per the provisions of MOFA the possession  should  not  have  been  handed  over  to  the members  of  the  complainant  society  without  obtaining

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occupancy certificate and this is a clear unfair trade practice. It is being argued on behalf of the OP that there are additions and modifications in the building and therefore, it is difficult to obtain the certificate and the matter is getting delayed. This argument is not tenable as the situation has been created by the OPs themselves as they offered possession without the occupancy  certificate.  Clearly,  not  obtaining  occupancy certificate is the deficiency on the part of the OP/appellant.

12. Coming  to  the  question  of  FSI,  though  there  is  a provision  in  the  agreement  in  condition  no.  42  that  the allottees/purchasers shall not object to OP utilizing additional FSI, which may be available at the time of agreement or being made available even in a future date. However, this provision goes  against  the  spirit  of  MOFA  as  this  Commission  in Vaibhav  Development  Corporation  and  others  (supra)  has held  that  it  is  obligatory  upon  the  builder  to  obtain  a  full Occupancy Certificate, without which a Conveyance Deed in favour  of  the  complainant  society  cannot  be  executed. However, there has to be a reasonable time for execution of conveyance deed in favour of the Society and this according to the said Rule has to be within four months if no period of conveying the title  to the Society  is  mentioned in  the Sale Agreement.

13. As the OP has given possession to the members of the Society  without  obtaining  Occupancy  Certificate,  the possession of allottees has become illegal. As the purchasers have paid full  consideration of the flats, they are entitled to have legal possession and legal right and title. It is also seen from  the  observation  of  the  State  Commission  that  the appellants/opposite  parties  have  not  replied  to  the  queries raised  by  the  Municipal  Corporation  and  therefore,  they themselves were negligent and deficient in taking steps for getting the Occupancy Certificate. As complaint has been filed by  the  society,  it  is  essential  that  the  possession  of  its members is regularized and title of the members as well as of the  Society  is  legalized.  This  can  only  be  legalized  if  OP obtains Occupancy Certificate.

Therefore,  it  is  necessary  to  direct  the  OP to  obtain  the Occupancy  Certificate  in  a  time  bound  manner.  In  this respect, the order of the State Commission is perfectly valid so far as it relates to directing the OP to obtain Occupancy Certificate within 90 days. Once the Occupancy Certificate is obtained the title has to be conveyed to the Society within four months.  From  this  point  of  view,  the  condition  No.  42  is

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against the provisions of MOFA. Hence, this condition will not be a binding on the other party. Therefore, the existence of this condition in the agreement shall only be seen as unfair trade practice.  As the OP has not  obtained the occupancy certificate  and  thereby  the  OP is  not  able  to  register  the conveyance deed in favour of  the complainant  Society,  the continuing  deficiency  on  the  part  of  the  appellant/OP  is evident. Therefore, I do not find any error in the order of the State Commission in respect of the OP obtaining occupancy certificate and then executing the conveyance deed in favour of  the  Society.  The  penalty  of  Rs.  1,000/-  per  day  was effective from 17.03.2015, however, looking at the difficulties of  the appellant  in  getting the occupancy certificate  due to some modifications, additions and alterations in the building, I deem it appropriate to put a lump sum compensation of Rs. 3 lakhs to be paid to the Complainant Society by the appellant for not obtaining occupancy certificate till  today. It is further ordered that the order of the State Commission for paying Rs. 1,000/- per day shall be applicable now from the expiry of 60 days from the date of this order. This amount shall be paid regularly  at  every  month to  the complainant  society  till  the occupancy  certificate  is  obtained  and  conveyance  deed  is executed in favour of the Society.

14. As  regard  the  objection  of  the  appellants  regarding pecuniary jurisdiction of the State Commission, it appears that this  objection  has  not  been  taken  before  the  State Commission specifically. As the matter has now been decided by the State Commission on merits, the technical objection of pecuniary jurisdiction cannot be raised at this stage. This view gets support from the decision of the Hon’ble Supreme Court in Harshad Chiman Lal Modi Vs. DLF Universal and Anr., AIR 2005 SC 4446, wherein the Hon’ble Apex Court has held as follows:-

“So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken  at  the  earliest  possible  opportunity  and  in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at  the earliest,  it  cannot be taken at a subsequent stage.”  

15. Based  on  the  above  discussion,  the  appellants  are directed to pay Rs. 28,00,000/- (rupees twenty eight lakhs only) to the respondent No. 1 Society within a period of 45 days, failing which this amount shall carry an interest @ 8%

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p.a. from date of this order till  actual  payment. Appellants are  further  directed  to  pay  Rs.  1,000/-  (rupees  one thousand) per day after 60 days from date of this order to the Complainant Society till obtaining of the full Occupancy certificate. It is further directed that appellants shall convey the title of the property as detailed in the order of the State Commission  in  favour  of  the  complainant  Society  by registered  deed  within  a  period  of  four  months  after obtaining the Occupancy Certificate. The impugned order of the State Commission stands modified accordingly. The cost of Rs. 50,000/- is also upheld. First Appeal No. 109 of 2015 stands disposed of accordingly.”

4. Assailing the order aforesaid, learned counsel for the appellants has

argued that  as  per  the admitted position on record,  the members of  the

respondent-society had carried out additional constructions/alterations to the

building  due  to  which,  the  Municipal  Corporation  was  not  issuing  the

Occupancy Certificate and hence,  the National  Commission ought  not  to

have issued directions for obtaining the Occupancy Certificate. The learned

counsel has referred to the reply letter dated 01.10.2002 by one Shri Nazeer

H. Kadri in support of the contention that the members of respondent-society

did carry out alterations to their respective flats/shops. The learned counsel

has  further  submitted  that  the  respondent-society  violated  the  terms  of

undertaking as mentioned in  the pursi  dated 21.03.2013 filed before the

State  Commission,  wherein  they  had  undertaken  to  remove  the  illegal

alteration, if so required by the Municipal Corporation. The learned counsel

has  further  pointed  out  that  removal  of  additional

structures/changes/additions put up by the members of respondent-society

was the subject-matter of a writ petition, being W.P. No. 970 of 2015, filed

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before the High Court of Judicature at Bombay, which was disposed of by

the order dated 12.06.2017 with directions that a designated officer of the

concerned  ward  shall  visit  the  property  in  question  so  as  to  ascertain

whether  there  were  illegal  constructions/unauthorized  changes/additions/

alterations; and if such violations were found, then to intimate the necessary

parties prior to taking of any action for demolition or removal2.

4.1 Learned counsel has also contended that when the State Commission

had rejected the prayer for payment of Rs. 25,00,000/- to the respondent-

society and the same was not the subject-matter of  appeal,  the National

Commission has gravely erred in awarding this amount to the respondent.

Learned counsel has further submitted that even if handing over possession

of  flats  to  the members  of  the respondent-society  in  the absence of  the

Occupancy Certificate was being questioned, fact of the matter remains that

illegal/unauthorized  construction/alterations  were  carried  out  by  the

members  of  respondent-society;  and  in  these  circumstances,  the

responsibility  for  delay  in  completion  of  all  other  requirements  could  not

have been fastened on the appellants.  

5. Per contra, learned counsel for the respondent-society has supported

the  order  passed  by  the  National  Commission  as  regards  holding  the

appellants responsible for the deficiency in services as also for the delay in

obtaining the Occupancy Certificate. The learned counsel would submit that

2 The learned counsel for  the appellants has further pointed out that the Municipal Corporation has initiated necessary proceeding, as noticed by the High Court in its order dated 07.01.2019 in Notice of Motion No. 221 of 2018 moved in W.P. No. 970 of 2015.

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the  appellants  handed  over  the  flats/commercial  units  not  only  without

Occupancy  Certificate  but  also  without  providing  basic  facilities  such  as

water,  electrical  meter  etc.;  and  in  any  case,  non-compliance  with  the

conditions  to  obtain  Occupancy  Certificate  speaks  volumes  about  the

deficiency of services on the part of the appellants. According to the learned

counsel,  the  building  is  in  the  same  condition  as  it  was  on  the  day  of

handing over possession to the members of  respondent-society;  in  other

words,  the  members  of  respondent-society  have  not  carried  out  any

alterations/constructions  in  the  said  premises.  While  further  refuting  the

contention of appellants that the Occupancy Certificate was not issued for

unauthorized  construction  or  alteration  by  the  members  of  respondent-

society,  the  learned  counsel  has  contended,  with  reference  to  the

correspondence with the Municipal Corporation, that Occupancy Certificate

was  not  issued  for  want  of  compliance  by  the  appellants  of  various

requisites and the attempt to shift the burden in that regard on the members

of the respondent-society was entirely unjustified.  According to the learned

counsel,  the appellants had attempted to amend the plan of  the building

which was resisted by respondent; and there exists a dispute between the

parties in relation to a portion of  a property demarcated for Recreational

Ground inasmuch as the said portion is being used by one garage owner as

a  parking  space  at  the  behest  of  the  appellants,  which  has  resulted  in

harassment of the members of respondent-society.  

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6. Having heard learned counsel for the parties and having perused the

material placed on record, we are satisfied that in the given set of facts and

circumstances, directions by the National Commission as regards payment

of a sum of Rs. 25,00,000/ by the appellants to the respondent-society calls

for  no  interference  but  then,  other  parts  of  the  order  impugned  call  for

suitable modification.  

7. The  contention  on  the  part  of  appellants  as  regards  pecuniary

jurisdiction has only been noted to be rejected. The National Commission

has observed, and rightly so, that such a plea was not specifically raised

before  the  State  Commission  at  the  earliest  opportunity;  and  the  State

Commission having already decided the matter on merits, such a technical

objection  as  regards  pecuniary  jurisdiction  could  not  have  been

countenanced  before  the  National  Commission.  We find  no  error  in  the

National Commission rejecting this plea as being wholly untenable at the

given stage.  

8. As regards merits of the case, to put it in a nutshell, the respondent-

society, while filing their complaint, sought for reimbursement of the amount

of: (i) Rs. 35,16,820/- that was borrowed by appellants; (ii) Rs. 26,25,000/-

collected towards possession charges; and (iii) Rs. 46,40,000/- towards the

amount  spent  by  the  members  for  completing  the  interior  works  in  their

respective  units.  By  way  of  the  application  dated  21.03.20133 the

respondent-society did not press on prayer (d) concerning the said amount

3 Reproduced hereinbefore in paragraph 3.4.

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of Rs. 35,16,820/- towards temporary loan and at the same time, restricted

their claim in prayer (f) to the extent of Rs. 25,00,000/- with reference to the

minutes  of  the  meetings  dated  17.12.2003  and  14.12.20034.  The  State

Commission, while issuing directions for executing the Deed of Conveyance

by obtaining Completion Certificate and Occupation Certificate, also directed

the appellants to pay Rs. 26,25,000/- with interest, being the amount illegally

collected  towards  possession  charges.  The  State  Commission,  however,

held that there was no documentary evidence to establish that the amount of

Rs. 46,40,000/- was incurred by the members of the respondent-society to

complete  the  interior  civil  works.  On  the  other  hand,  the  National

Commission  agreed  with  the  submissions  of  the  appellants  that  the

directions regarding refund of Rs. 26,25,000/- could not have been issued

when there was no cogent proof and when the President of the society, who

had issued the receipt in question, was deleted from the array of the parties

on  the  request  of  the  complainant.  However,  the  National  Commission

ordered payment of Rs. 25,00,000/- by the appellants as agreed by them in

the meeting dated 17.12.2003.  

9. When  the  prayers  made  in  the  complaint  are  read along  with  the

contents of the application dated 21.03.2013 as also with the findings of the

State Commission and the National Commission, it may appear at the first

blush that the amount claimed towards temporary loan in prayer (d) was

given up by the respondent-society whereas no proof was found in relation

4 Reproduced hereinbefore in paragraph 3.4.1.

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to amounts claimed in prayers (e) and (f) towards possession charges and

interior  civil  works  respectively.  However,  fact  of  the matter  remains that

there had been long drawn disputes between the parties on several issues,

including those regarding monetary claims made by the respondent-society

and its members; and meetings were held for resolution of such disputes.

The  prayers  (d)  to  (f)  for  money  recovery  in  the  complaint  and  the

submissions made in the application dated 21.03.2013 are required to be

viewed in the context  of  such claims and the resolutions adopted in the

meetings. In our view, it  would be wholly inappropriate and unjustified to

consider  the  prayers  as  made  in  the  complaint  and  as  modified  in  the

application de hors the context and disjointed from the decisions taken in the

meetings aforesaid.   

10. Indisputably, in the application dated 21.03.2013 as moved before the

State Commission, the respondent-society restricted its prayer for  money

recovery to a sum of Rs. 25,00,000/- with reference to the aforesaid minutes

dated 17.12.2003 and 14.12.2003. It is at once clear that the aforesaid sum

of Rs. 25,00,000/- was agreed to be paid by the appellants in full and final

settlement  of  the claim of  the  respondent-society.  The appellants  having

agreed to make such payment, in our view, the National Commission has

rightly  put  them  to  the  terms  of  honouring  their  unequivocal

commitment/promise.  In the given set of  facts  and circumstance,  we are

unable to accept the contention that a particular part of order of the State

Commission  having  not  been  challenged  by  the  respondent-society,  the

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National Commission could not have granted the relief otherwise available

on the face of record. In an overall view of the matter, when such a relief

emanates  from  the  very  commitment  made  by  the  appellants  in  the

meetings  aforesaid,  the  National  Commission  had  been  fully  justified  in

granting the same to the respondent-society. Therefore, we find no reason to

consider  any  interference  in  this  part  of  direction  by  the  National

Commission (as contained in paragraph 10 of the order impugned).

11. Even when we find no reason to interfere with the above-mentioned

parts of the order impugned, it appears difficult to approve the directions in

the remaining parts  thereof,  particularly  those relating to other pecuniary

reliefs. The National Commission has saddled the appellants with a liability

to  pay  compensation  to  the  tune  of  Rs.  3,00,000/-  for  not  obtaining

Occupancy Certificate and has issued further directions to the appellants to

obtain such certificate as also to execute the requisite Deed and to pay Rs.

1,000/- per day for every day of delay. True it is that Occupancy Certificate

was not obtained by the appellants but then, fact of the matter remains that

the members of respondent-society chose to take over possession without

such certificate;  and then,  several  questions  have arisen as  regards  the

alteration allegedly carried out by them for which, the Municipal Corporation

has the objections to raise. In any case, there appears nothing on record to

find the basis for holding the appellants liable for compensation and then, for

assessing the quantum of compensation, if at all there be any liability of the

appellants.  In  other  words,  there  is  no  material  on  record  to  find  if  the

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respondent-society or its members suffered any loss; and if so, the extent

thereof. Therefore, this part of the order impugned, directing the appellants

to pay compensation to the tune of Rs. 3,00,000/-, cannot be approved.   

12. As regards direction to appellants to convey the title of the property in

question by executing a registered Deed within a period of four months after

obtaining Occupancy Certificate, in our view, though the appellants cannot

avoid their legal obligation to execute the requisite Deed but then, having

regard to the facts and circumstances of the case and more particularly the

facts relating to the issuance of notices by the Municipal Corporation; and

the  dispute/objection  regarding  alterations  by  the  members  of  the

respondent-society  having  not  been  settled  as  yet  with  the  High  Court

having issued directions for  inspection of  the building and for  necessary

follow-up steps,  awarding  of  Rs.  1,000/-  per  day  for  every  day  of  delay

seems  rather  unwarranted.  In  the  given  situation,  where  the  Municipal

Corporation had been of the view that there were visible illegal constructions

made  by  the  members  of  respondent-society  because  of  which  the

Certificate cannot be issued; and in view of the orders dated 12.06.2017 and

07.01.2019 passed by the High Court in W.P. No. 970 of 2015, the penalty of

Rs.  1,000/-  per  day  deserves  to  be  waived  at  present  but  with  the

requirements  on  the  parties  to  complete  the  respective  requisites,  while

leaving it open for them to take recourse to appropriate remedies, in case of

any grievance arising in future.  

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13. Having regard to the fact and circumstances of this case and looking

to the nature of dispute, we find no justification for saddling the appellants

with cost of Rs. 50,000/- either. The cost deserves to be made easy in this

case.

14. In the result:  

(i) The impugned order dated 07.03.2018 is not interfered with, to

the extent it relates to the payment of Rs. 25,00,000/- by the appellants to

the respondent-society. The appellants shall make payment of this amount

of Rs. 25,00,000/- within 45 days from today failing which, this amount shall

carry interest @ 8% p.a. from today until payment.

(ii) The other part of the order impugned, saddling the appellants

with liability to pay compensation to the tune of Rs. 3,00,000/- is set aside.

(iii) Yet another part of the order impugned, requiring the appellants

to pay Rs. 1,000/- per day after 60 days of the order and until obtaining full

Occupancy Certificate, is also set aside.

(iv) As regards obtaining of Occupancy Certificate and execution of

the  Deed  of  Conveyance  by  the  appellants,  it  is  provided  that:  (a)  the

appellants  shall  complete  all  the  requisites  on  their  part  for  obtaining

Occupancy  Certificate  within  three  months  from  today;  and  (b)  the

respondent-society  and its  members shall  also ensure compliance of  the

requisites on their  part  (with reference to the orders passed by the High

Court in W.P. No. 970 of 2015) within three months from today and for that

22

matter,  they  may  seek  necessary  directions  from  the  High  Court,  if  so

required. Within two months of completion of all the requisites by the parties,

the  appellants  shall  execute  the  Deed  of  Conveyance  in  favour  of  the

respondent-society after obtaining the necessary Occupancy Certificate. As

regards this part  of  the matter,  it  is also left  open for the parties to take

recourse to appropriate remedies in accordance with law, in case of  any

grievance arising in future.

(v) The cost imposed on the appellants is waived and parties are

left to bear their own costs of this litigation.  

15. This  appeal  is  partly  allowed  and  the  impugned  order  dated

07.03.2018 as passed by the National Commission stands modified to the

extent and in the manner indicated above.

………………..………………………J (Abhay Manohar Sapre)

………………..………………………J      (Dinesh Maheshwari)    1

New Delhi, Dated: 19th July, 2019.

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