Case title:
Samruddhi Co-operative Housing Society Ltd vs Mumbai Mahalaxmi Construction Pvt. Ltd.
Date of Order:
11th January 2022
Bench:
Justice Dr Dhananjaya Y Chandrachud and AS Bopanna
Parties:
Petitioner: Samruddhi Co-operative Housing Society Ltd
Defendant: Mumbai Mahalaxmi Construction Pvt. Ltd.
Facts:
- The National Consumer Disputes Redressal Commission1 issued a decision and an order on December 3, 2018, which is the basis for the appeal. Due to the alleged inadequate service provided by the respondent, the appellant filed the complaint seeking a refund of the extra taxes and fees that were paid by the appellant to the municipal authorities. The NCDRC dismissed the complaint by the contested order on the grounds that it was time-barred and that it could not be maintained because it was a recovery process and not a consumer dispute.
- A cooperative housing society is the appellant. The respondent builds Wings 'A' and 'B, and in compliance with the Maharashtra Ownership Flats (Regulation of the Promotion of Building, Sale, Management and Transfer) Act 19632, entered into agreements to sell flats to certain buyers. The members of the appellant made a reservation for the apartments in 1993, and possession was awarded in 1997. The appellant claims that the respondent did not take the necessary efforts to request the occupation certificate from the local authorities. Individual flat owners were not qualified for power and water connections without the occupation certificate. The authorities approved temporary water and electricity connections as a result of the appellant's efforts.
- In order to get the respondent to get the occupation certificate, the appellant filed a consumer complaint with the State Consumer Disputes Redressal Commission of Mumbai3 on July 8, 1998. The respondent offered the appellant a one-time settlement on April 7, 2014, which the appellant rejected in a letter dated April 18 since it was reportedly less than the sum the respondent owed. The SCDRC ordered the respondent to obtain an occupancy certificate within four months in its judgement and order dated 20 August 2014. The SCDRC further ordered the respondent to pay, among other things, Rs. 1,000,000 as compensation for overcharges for water.
- On December 28, 2015, the appellant sent a legal notice on the respondent for payment of Rs. 3,56,42,257 in unpaid debts. The demand was not met by the responder. Following that, the appellant submitted a request for the SCDRC's 20 August 2014 order to be put into effect.
- The appellant also filed a complaint with the NCDRC, requesting payment of Rs. 2,60,73,475/- as reimbursement for excess charges and tax paid by the appellant's members due to the respondent's deficiency in service as well as Rs. 20,000/- to compensate for the mental anguish and inconvenience the appellant's members endured.
- The appellant argued before the NCDRC that the payment of excess water usage fees and the failure to issue an occupancy certificate constitute a continuous cause of action, hence the complaint was not limited by limitation. Even yet, the respondent allegedly admitted its responsibility and agreed to pay a settlement of Rs. 1 crore on April 7, 2014, marking the start of the cause of action. Additionally, it was claimed that the respondent's failure to pay the sum that the appellant had requested on December 15, 2015, gave rise to the cause of action. Hence, the complaint was, in the appellant's opinion, submitted within the allowed window of time under Section 24A of the Consumer Protection Act of 1986.
- Regarding the dispute's grounds, the NCDRC noted that the complaint was submitted in order to receive a refund of the excess money the appellant had paid to the authorities. In essence, the case was brought to have the respondent pay back the excess sum. According to the NCDRC, the respondent did not supply the services for which the real estate tax or water fees were assessed. The NCDRC determined that the appellant would not meet the description of "customer" under Section 2(1)(d) of the Consumer Protection Act 1986 because these services were rendered by the municipal authorities. As a result, the NCDRC dismissed the complaint on the grounds that it was time-barred and unenforceable under the 1986 Consumer Protection Act.
Issued Raised:
The appeal revolves around the maintainability of the complaint and whether it is barred by limitation Act?
Arguments:
- The complaint's maintainability and whether it is time-barred are at the heart of the appeal. According to the NCDRC, the cause of action arose when the municipal authorities initially demanded that the appellant pay increased fees; as a result, a complaint needed to be made within two years of the cause of action accruing. Nonetheless, the appellant has contended that the cause of action is ongoing because the appellant's members have continued to pay higher fees while the respondent failed to issue the occupancy certificate.
- The time restriction for filing a complaint is set forth in Section 24A of the Consumer Protection Act of 1986. A complaint must be submitted to a consumer forum within two years of the date the cause of action first accrued. In this instance, the appellant claims that the complaint is time-limited because the cause of action is based on a persistent injustice. In the event of a persistent breach of a contract or tort, the computation of limitation is provided under Section 22 of the Limitation Act 19635. It states that in the event of a continuing breach of contract, a new statute of limitations will start to run at every instant that the breach persists.
- A party commits a continuing wrong when they repeatedly violate a legal or contractual requirement. A promoter is subject to a number of general requirements under Section 3 of the MOFA. These requirements include, among other things, disclosing information about the type of title to the property, liens on the property, furnishings, fittings, and amenities to be delivered, and deferring granting possession of a flat until the local authority issues a completion certificate. According to the terms of the sale agreement between the appellant and the respondent, the latter is also responsible for obtaining the occupancy certificate from the local authorities.
- The promoter must give the flat owners the occupancy certificate, according to Sections 3 and 6 of the MOFA. In addition, until the land is passed to the flat owners, the promoter must pay expenses including ground rent, municipal taxes, water rates, and energy prices. Even after the property has been transferred, the promoter is still responsible for any unpaid fees.
- It is clear from these requirements that the respondent had a duty to deliver the occupancy certificate and to cover the associated costs up until the certificate was given. The respondent has repeatedly neglected to give the appellant society the occupancy certificate. In addition, the NCDRC levied a fine for any delays past these four months in getting the occupancy certificate.
- The respondent has not given the occupancy certificate since 2014 to this day. The members of the appellant have directly been impacted by the respondent's refusal to get the certificate in terms of paying greater taxes and water fees to the municipal authority. This ongoing failure to obtain an occupancy certificate constitutes a continued violation of the respondent's obligations under the MOFA. As a result, the appellants are entitled to damages for this ongoing violation, and the statute of limitations does not apply to their complaint.
- In this instance, the respondent was in charge of giving the society both the occupancy certificate and the title to the units. The respondent is accountable for any deficiencies in service caused by their failure to get the occupation certificate. Therefore, the appellant society's members are fully within their rights as "consumers" to ask for compensation in order to make up for the liability that results from the lack of an occupancy certificate (such as higher taxes and water costs by the owners).
- Any pending applications are hereby dismissed.
Conclusion:
For the aforementioned grounds, we uphold the complaint's maintainability and approve the appeal against the NCDRC's order from 3 December 2018. We order the NCDRC to resolve the complaint within three months of the date of this judgement and to assess the merits of the dispute while taking into account the observations made in the current opinion.
