Offering Possession Of Flat Without Obtaining Occupation Certificate Is Illegal, NCDRC Holds Hamilton Heights Liable

Brief Facts:

The Complainants booked a flat in the project named 'Hamilton Heights' in Faridabad, Haryana, developed by Hamilton Heights Pvt. Ltd. (“Developer”). The Complainant paid an initial amount of Rs. 5,00,000/- out of the total sale consideration of Rs. 66,24,000/- on 14th October 2007. The buyer's agreement was executed after a delay of 13 months when the Complainants had already paid further instalments. As per the buyer's agreement, the possession was to be delivered within 36 months of the execution, that is, by December 2011. Further, it contained several arbitrary and one-sided clauses which included the forfeiture of previous instalments in case of non-acceptance. Subsequently, the Complainants paid up to Rs. 46,70,000/- by December 2011. However, the Developer failed to deliver the possession of the flat. The Developer extended the completion deadline to 1st February 2013. By this time, the Complainants had paid Rs. 69,94,488/-. The possession was delivered and during an inspection conducted on 3rd April 2013, the Complainants noticed multiple defects and deficiencies in the flat. Despite repeated requests for rectification, the Developer failed to make necessary repairs and instead, kept on demanding more money. Additionally, the Developer also failed to obtain an occupation certificate by this time.

Subsequently, the Complainants discovered that the offered possession of the flat was illegal. The Developer had failed to obtain mandatory permissions at the time of delivery. Feeling aggrieved, the Complainants filed an FIR against the Developer on 24th May 2014 and another complaint before the Punjab and Haryana High Court (“High Court”) on 28th August 2013, which were pending adjudication. The Complainants also filed a consumer complaint before the National Consumer Disputes Redressal Commission (“NCDRC”), New Delhi.

The Complainants contended that the Developer unilaterally revised the flat's area and failed to obtain the necessary statutory permissions and documents (including the occupation certificate) by the time of the flat's delivery. The Developer also imposed one-sided and unfair terms and diverted the collected sale consideration towards its other projects.

Contentions of the Developer:

The Developer contended that the occupation certificate was already issued by the appropriate authorities in 2015. Further, the Complainants were offered possession of the flat in 2013 and despite repeated reminders, they refused to accept the possession. The complaint was also barred by limitation as it was filed with a delay of 4 years without any reasonable cause. The previous FIR filed by the Complainants was also dismissed uncontested. Moreover, the Developer had already approached the High Court to quash the FIR as the matter was purely civil in nature. Further, the change in the flat's area was not unilateral as it was instructed by competent authorities, and the Complainants were timely informed about the said changes. The buyer's agreement was also willingly signed by the Complainants, having the full opportunity to review it. The project was delayed due to circumstances beyond the Developer's control as multiple flat buyers failed to pay their instalments timely under the construction-linked payment plan. The defects cited by the Complainants were also minor in nature and would have been addressed promptly.

Observations by the NCDRC:

The NCDRC observed that the Developer initially offered possession of the flat to the Complainants in 2013, without obtaining the mandatory occupation certificate. Reliance was placed on Debashis Sinha and Ors. vs M/s R.N.R. Enterprise [2023 LiveLaw (SC) 92] and Samruddhi Co-operative Housing Society Ltd. vs Mumbai Mahalaxmi Construction Pvt. Ltd. [Appeal No. 4000 of 2019], wherein the Supreme Court held that offering possession of the flat without obtaining the occupation certificate is inherently illegal and constitutes a deficiency in service and unfair trade practice on the part of the developer.

The NCDRC also observed that the Developer failed to submit a revised offer of possession letter along with an occupation certificate on record during the proceedings. The Developer's claim regarding the alleged offer only surfaced when the matter was announced to be reserved for final orders on 19th March 2025. The Developer failed to prove the authenticity of the said letter or any prior communication to the Complainants regarding the offer. This suggested that the Developer's claim about the purported offer was an afterthought, raised as a vague defence.

The NCDRC held that an offer for possession is only valid when it is clearly documented, accompanied by all statutory clearances (including the occupation certificate) and properly communicated to the buyer. It was further observed that the Developer failed to fulfil these requirements and attempted to introduce the alleged offer at a highly belated stage. This constituted a deficiency in service and unfair trade practice on the part of the Developer.

Relying on the Supreme Court's decision in Experion Developers (P) Ltd. v. Sushma Ashok Shiroor [(2022) 15 SCC 286], the NCDRC held a just and fair interest rate is imposed from the respective date of deposits of the consideration amount, and not merely from the date of last deposit. Based on this decision, the NCDRC noted that an interest rate of 9% is fair and just. As a result, the NCDRC directed that Developer to refund Rs. 68,94,488/- along with 9% interest per annum from the respective dates of deposit till the actual date of realization, within 6 weeks of the date of the order. In case of failure to pay the aforementioned amount, the NCDRC held that the interest rate would be increased to 12% per annum for any outstanding amount. The Developer was also directed to pay Rs. 40,000/- as legal costs to the Complainants.

Case Title: Vaibhav Garg and Anr. vs Hamilton Heights Pvt. Ltd. and Anr.

Case No.: Consumer Complaint No. NC/CC/496/2019

Advocate for the Complainant: Mr Pranjal Mishra

Advocate for the Opposite Party: Mr Brijesh Chaudary and Mr Prins Kumar

Date of Pronouncement: 8th April 2025

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