Consumer Rights and Builder Responsibilities: Supreme Court’s Landmark Ruling on Housing Societies

The case of Jiten K. Ajmera & Another vs. M/s Tejas Co-operative Housing Society highlights the legal obligations of builders towards homebuyers and housing societies. The Supreme Court was called upon to decide whether the builder was responsible for obtaining an Occupancy Certificate, executing a Conveyance Deed, and refunding amounts collected towards service amenities. This ruling reinforces consumer rights in real estate transactions and strengthens legal protections for cooperative housing societies.

Background of the Case

The appellants, Jiten K. Ajmera and another, were the legal representatives of Late Smt. Mrudula K. Ajmera, who was the owner of a plot of land on Military Road, Andheri (East), Mumbai. She constructed a building named Tejas Apartments and sold flats to various buyers on an ownership basis. The flat buyers formed the respondent society, M/s Tejas Co-operative Housing Society, and later filed a consumer complaint against the appellants.

The complaint, filed before the District Consumer Disputes Redressal Forum, Mumbai, alleged that the appellants failed to:

Obtain the Occupancy Certificate from the Municipal Corporation.
Execute the Conveyance Deed in favor of the housing society.
Provide promised service amenities and refund charges collected from members.

The District Forum ruled in favor of the society, directing the appellants to obtain the occupancy certificate within three months and execute the conveyance deed within six months. Additionally, they were ordered to refund amounts collected from society members towards amenities, formation of the society, and water taxes. The appellants challenged this decision before the State Consumer Disputes Redressal Commission.

Legal Issues Considered

Whether the builder was responsible for obtaining an occupancy certificate.
Whether the society was entitled to a conveyance deed for the property.
Whether the builder was liable to refund amounts collected for service amenities.
Whether additional documents submitted by the appellants at the appellate stage should be considered.

Arguments Presented

Petitioners (Jiten K. Ajmera & Another)

The occupancy certificate could not be obtained due to unauthorized structures erected by occupants, which violated the approved building plan.
The appellants had already made efforts to apply for the certificate, but the Municipal Corporation denied it due to violations by society members.
The amounts collected were used for legitimate purposes, and refunding them would cause financial loss.
Additional documents should be admitted as evidence in the appeal, as they provided critical information regarding the compliance process.

Respondent (M/s Tejas Co-operative Housing Society)

The builder was legally obligated to obtain the occupancy certificate before handing over possession.
The delay in execution of the conveyance deed violated the Maharashtra Ownership Flats Act, 1963.
The society members were unfairly burdened with expenses that should have been borne by the builder.
The builder’s failure to comply with legal requirements affected the residents’ rights and property valuation.

Supreme Court’s Observations

1. Builder’s Responsibility for Occupancy Certificate

The Supreme Court reaffirmed that obtaining the occupancy certificate was the responsibility of the builder. The Court noted:

“A builder cannot escape liability by blaming occupants for unauthorized alterations when the completion process itself was incomplete.”

2. Obligation to Execute the Conveyance Deed

The Court held that the appellants were bound to execute the conveyance deed under the Maharashtra Ownership Flats Act, 1963. The law requires builders to convey title to housing societies within four months of formation, failing which legal action can be initiated.

3. Refund of Collected Amounts

The Court upheld the order for refunding charges collected from society members, stating:

“A builder cannot charge amounts for promised amenities and then fail to provide them. Such conduct amounts to deficiency in service.”

4. Consideration of Additional Documents

The Court ruled that additional documents submitted at the appellate stage should be admitted if they provide relevant information and were unavailable earlier. It set aside the rejection of these documents by the State and National Consumer Commissions.

Final Judgment

The Supreme Court ruled:

The appellants must obtain the occupancy certificate within three months.
The appellants must execute the conveyance deed in favor of the housing society within six months.
The amounts collected from society members for service amenities, society formation, and water tax must be refunded.
The case was remanded to the State Consumer Commission for fresh consideration, taking additional documents into account.

Implications of the Judgment

Reinforces consumer rights against builders who fail to meet legal obligations.
Establishes that builders must obtain occupancy certificates before handing over possession.
Strengthens protections for housing societies under cooperative housing laws.
Encourages proper documentation in real estate transactions.

Conclusion

The Supreme Court’s ruling in this case sets an important precedent for homebuyers and cooperative housing societies. By holding builders accountable, the judgment ensures transparency and fairness in the real estate sector. This ruling reinforces that legal compliance is a builder’s obligation, not a choice.

Petitioner Name: Jiten K. Ajmera & Another.
Respondent Name: M/s Tejas Co-operative Housing Society.
Judgment By: Justice Uday Umesh Lalit, Justice Indu Malhotra.
Place Of Incident: Mumbai, Maharashtra.
Judgment Date: 06-05-2019.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: Jiten K. Ajmera & An vs Ms Tejas Co-operati Supreme Court of India Judgment Dated 06-05-2019.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in Property Disputes
See all petitions in Contract Disputes
See all petitions in Landlord-Tenant Disputes
See all petitions in Consumer Rights
See all petitions in Judgment by Uday Umesh Lalit
See all petitions in Judgment by Indu Malhotra
See all petitions in allowed
See all petitions in Remanded
See all petitions in supreme court of India judgments May 2019
See all petitions in 2019 judgments

See all posts in Civil Cases Category
See all allowed petitions in Civil Cases Category
See all Dismissed petitions in Civil Cases Category
See all partially allowed petitions in Civil Cases Category