Developer didn't provide Occupancy Certificate to flat owners for 18 years, NCDRC orders Rs 6 crore compensation for Mumbai society residents

A Mumbai housing society has been awarded Rs 6 crore in compensation after the National Consumer Disputes Redressal Commission (NCDRC) found that its developer handed over flats without an Occupancy Certificate (OC), leaving residents to live under the constant threat of demolition for 18 years.

The commission, comprising Justice A P Sahi and Bharatkumar Pandya, held the developer and its partners jointly and severally liable for deficiency in service, ruling that the absence of the OC was a continuing failure on the developer's part rather than any fault of the residents.

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Developer blamed residents, commission didn't agree

The developer had argued that the members themselves had carried out illegal construction in their units, which was blocking the OC from being issued. The commission rejected this claim, noting there was no evidence of it and that it was the developer who had promised, constructed and handed over the flats, including an additional 20% carpet area to original members, without ever securing the OC.

The bench held that it was the developer's responsibility to calculate the permissible construction, prepare valid building plans, get them sanctioned, and only then build accordingly, something it failed to do even after 18 years.

Construction nearly 45% more than what was sanctioned

The commission found that the developer had raised close to 11,000 square feet more construction than what was sanctioned for the plot, nearly 45% in excess. It said this extra construction was done primarily to secure a larger share of free-sale flats for the developer's own profit, even at the cost of jeopardising the OC and causing prolonged distress to residents.

The commission noted that amended building plans were not even submitted until 2009, 2012 and 2021, and none of those attempts were seriously followed through.

Rs 71 crore claim called "misconceived"

The society had originally sought Rs 71 crore in compensation, based on a comparison between the area sanctioned in the approved plan and the area promised in the agreement. The commission called this claim exaggerated and unsubstantiated, pointing out that residents had accepted possession of their flats with full satisfaction over carpet area, and the real grievance was the missing OC and lack of a municipal water connection.

How the commission arrived at Rs 6 crore

The commission calculated compensation at 1.5 times the rate stipulated in the original agreement, Rs 1 lakh per month for delay, applied across 218 months from June 2008 to August 2026, working out to Rs 324 lakh. It added Rs 26 lakh for the absence of a municipal water connection and extra municipal taxes, bringing the figure to Rs 350 lakh.

On top of this, the commission awarded a further Rs 250 lakh, citing the developer's failure to obtain the OC despite three applications and the prolonged agony and financial burden this placed on the society, bringing the total compensation to Rs 600 lakh (Rs 6 crore).

What NCDRC has directed

The commission has ordered the developer to obtain the OC within 12 months and hand it over to the society, with receipts from each of the 33 members. The compensation of Rs 6 crore must be paid within three months, failing which it will attract 8% simple interest until fully paid. The developer has also been directed to pay Rs 10 lakh towards litigation costs.

Check the case judgement here: