Consumer Rights Strengthened: Supreme Court Directs Builder to Compensate Housing Society
The case of M/s Treaty Construction & Anr. v. M/s Ruby Tower Co-op. Hsg. Society Ltd. revolves around the deficiencies in services provided by a builder to a cooperative housing society. The Supreme Court upheld the ruling of the National Consumer Disputes Redressal Commission (NCDRC), directing the builder to compensate the society for delayed completion, failure to obtain the Occupancy Certificate, and non-execution of the conveyance deed.
Background of the Case
The case originated from complaints by members of the Ruby Tower Co-operative Housing Society in Mumbai, who alleged that the builder failed to complete the promised infrastructure and obtain necessary permissions.
Key Facts
- The builder undertook a project consisting of 64 flats and 13 shops in Jogeshwari (West), Mumbai.
- Flats were sold between 1994 and 2002, and the buyers formed the Ruby Tower Co-op. Housing Society.
- Despite receiving payments, the builder failed to complete construction, obtain the Occupancy Certificate, or execute the conveyance deed.
- The society filed a complaint in the Maharashtra State Consumer Disputes Redressal Commission in 2005.
- The State Commission ruled in favor of the society, ordering the builder to reimburse amounts and fulfill statutory obligations.
- The builder appealed to the National Commission, which modified the order but upheld key directives.
- The builder then approached the Supreme Court.
Arguments of the Parties
Petitioner’s (Builder’s) Argument
- The claim was exaggerated and certain demands were beyond the scope of the agreement.
- Delays in obtaining the Occupancy Certificate were due to alterations made by the society members.
- The amount of Rs. 25,00,000/- agreed in the meetings was conditional on additional construction rights (FSI) being granted.
Respondent’s (Housing Society’s) Argument
- The builder was legally bound to obtain the Occupancy Certificate and execute the conveyance deed.
- The residents had to pay extra taxes and charges due to the builder’s failure to fulfill contractual obligations.
- The additional construction claimed by the builder was unauthorized and had nothing to do with the completion of the existing structure.
Supreme Court’s Analysis
On Builder’s Obligations
The Supreme Court ruled that the builder was obligated to complete the necessary procedures:
“The builder cannot evade responsibility for obtaining the Occupancy Certificate, as possession was handed over without ensuring compliance with municipal requirements.”
On Payment of Rs. 25,00,000/-
The Court noted that the builder had agreed to this payment in a meeting on December 17, 2003 and ruled:
“The appellants are bound by their own commitments and must honor the agreed compensation.”
On Penalty for Delay
The NCDRC had imposed a daily penalty of Rs. 1,000/- for each day of delay in obtaining the Occupancy Certificate and executing the conveyance deed. The Supreme Court modified this, stating:
“While the builder must fulfill its obligations, the penalty should be removed in favor of a structured timeline for compliance.”
On Compensation for Deficiency in Service
The Supreme Court overturned the additional compensation of Rs. 3,00,000/- imposed by the NCDRC, stating:
“There is no clear evidence of financial loss suffered by the society beyond the agreed compensation.”
Final Judgment
The Supreme Court partially allowed the appeal:
“The builder shall pay Rs. 25,00,000/- to the housing society within 45 days. The penalty of Rs. 1,000/- per day is removed, but the builder must obtain the Occupancy Certificate and execute the conveyance deed within five months.”
Significance of the Judgment
- Protects Consumer Rights: Reinforces the obligations of builders towards housing societies.
- Prevents Builders from Avoiding Legal Duties: Ensures that developers fulfill commitments before handing over possession.
- Clarifies Compensation Principles: Distinguishes between contractual obligations and punitive damages.
Conclusion
The Supreme Court’s ruling in M/s Treaty Construction & Anr. v. M/s Ruby Tower Co-op. Hsg. Society Ltd. sets an important precedent in real estate law. It holds builders accountable while ensuring fair and enforceable remedies for homebuyers.
Petitioner Name: M/s Treaty Construction & Anr..Respondent Name: M/s Ruby Tower Co-op. Hsg. Society Ltd..Judgment By: Justice Abhay Manohar Sapre, Justice Dinesh Maheshwari.Place Of Incident: Mumbai, Maharashtra.Judgment Date: 19-07-2019.
Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!
Download Judgment: Ms Treaty Construct vs Ms Ruby Tower Co-op Supreme Court of India Judgment Dated 19-07-2019.pdf
Direct Downlaod Judgment: Direct downlaod this Judgment
See all petitions in Property Disputes
See all petitions in Consumer Rights
See all petitions in Judgment by Abhay Manohar Sapre
See all petitions in Judgment by Dinesh Maheshwari
See all petitions in partially allowed
See all petitions in Modified
See all petitions in supreme court of India judgments July 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
