State consumer commissioned slapped fined of rs.6.50 lacs to ravi group The state commission has slapped heavy fine of rs.6.50 lacs to ravi group for false promises to flat purchasers at time of booking and not obtaining occupancy certificate of building. the project name is "gaurav empire" cts no. 620 village malad. address:kannyapada, ahead of gokuldham, filmcity road, goregaon (e). However, what is regrettable is that the complaint have to wait for ten long years for this justice! better you do not purchase the flat from ravi group!!! The entire state commission order is as under: Consumer disputes redressal commission Maharashtra state, mumbai date of filing : 08/01/2000 Consumer complaint no. 07 of 2000 date of order : 27/12/2010 1. pradip kumar roy 2. anirban roy both r/at flat no.502, “gaurav arpan” gokuldham, goregaon (e), mumbai – 400 063. … complainants v/s. 1. m/s. ravi ashish land developers ltd. regd. office at laxmi palace, 76-mathuradas road, kandivali (w), mumbai – 400 067. 2. the directors of m/s. ravi ashish land developers ltd. …opponents quorum : shri p.n. kashalkar, hon’ble presiding judicial member mrs. s.p. lale, hon’ble member Appearance : ms. ratnarani roy, advocate for the complainants. ms. payal agrawal, advocate for the o. ps. -: order :- Per shri p.n. kashalkar, hon’ble presiding judicial member this consumer complaint has been filed under section 17 of consumer protection act, 1986 by father and son. it is the case of the complainants against o. ps. who are builders/developers that they are consumers of o.p. no.1 who is builder/developer of which o.p. no.2 as per list are directors. according to the complainants, complainant no.1 was serving in indian oil corporation in 1982 and throughout his tenure he was in mumbai. till his retirement in 1995 he was provided accommodation by the company in best locality of the city. he did not have any place of residence of his own in mumbai. he therefore wanted to book a flat through estate agency.in 1997 he learnt that o.p. no.1/m/s. ravi ashish land developers ltd. were inviting applications for housing complex in goregaon (east), mumbai. said housing complex is styled as “gaurav empire” and advertised as ‘exclusive home for exclusives’. brochure of the o.p. no.1 mentioned that the entire housing complex would be completed and possession of the flats would be delivered in june 1997. complainant no.1 was assured that he would be getting real value of his money, if he purchase a flat in the said gaurav empire. on inquiring with o.p. no.1 he was satisfied that the flat in gaurav empire housing complex will be best suited flat for the person like him, who wanted house in mumbai. so, they applied for purchase of flat in gaurav empire building. the saleable area of the flat was 825 sq. ft. and carpet area was 612 sq. ft. consideration fixed was `16, 50, 000/-. out of which `12, 37, 500/- was payable in cheque and balance amount of `4, 12, 500/- was payable in cash before issuance of allotment letter. by letter dated 05/03/1997 o.p. no.1 agreed to allot flat no.502 in “gaurav arpan” in the “gaurav empire housing complex” to the complainants. complainant no.1 took housing loan to pay the consideration of this flat. he mortgaged said flat to the lok group housing finance company. he is paying emis on the said loan amount. after issuance of allotment letter by o.p. no.1, complainants paid `4, 12, 500/- in cash. they also paid further payment as per particulars given in para 11 of the complaint. these payments were made by the cheques. they claimed that the entire consideration of `16, 50, 000/- was paid by complainant no.1 to o.p. no.1 within five months from the date of issuance of allotment letter. according to the complainants, o. ps./builder had assured that there would be seven storey building with three wings, arpan, darpan and samarpan and three towers, namely, deep, darshan and maharaja retreat and 12 row-houses in the gaurav empire housing complex and there would be amenities of road and sufficient street lights, flower decked landscaped garden, club house & community hall, paygrounds and kinder-garden, jogging tracks, gymnasium, swimming pool, library and would be surrounded by compound wall and there would be security gate at main entrance of the lay out. with these assurances, complainants entered into an agreement of sale of the said flat with o.p. no.1 on 29/03/1998 (exhibit-c of complaint). representative of the o.p. no.1 had initially assured that gaurav empire housing complex will be completed and possession would be given very soon. according to the complainants, even before execution of agreement of sale, they were assured that flat would be ready by june 1997 and would be delivered to the flat purchasers. but, they went on changing the dates and even on the date of execution of agreement they were unable to give possession of the flat to them. complainants found that at the site, progress of developing gaurav empire housing complex was not going on with full swing because the area was occupied by slum dwellers and the builder/developer had simply started construction of only one 7 storey building having two wings. there was no access to the gaurav arpan building by way of any approach road. the entry to the site as depicted in the plan did not exist. there was only one pathway leading to the building from the adjacent road. complainants found that the flat booked by them in gaurav arpan was not complete and ready for possession. there was no regular water connection and water was supplied to the building by tanker. lift of the building was not in operation. according to the complainants on 17/01/1998 o.p. no.1 wrote to the complainants referring to their letter dated 26/10/1997 that said letter was threatening one and complainants were asked to take physical possession by completing payment within 7 days. said letter is at exhibit-j dated 17/01/1998. complainants then undertook another inspection of said flat on 23/01/1998 and as expected there is no iota of change in the situation as in october 1997. they told o.p./builder that said flat and building were not habitable in any respect and once again asked the director of o.p. no.1 to inspect the site and decide if they can ask him to take possession of the flat in the conditions in which it stood. there was no approach road and there was no bmc water connection even when the joint inspection was made at their request by the complainants themselves and representative of o.p./builder. complainants enclosed copy of joint inspection report dated 02/02/1998. however, on the assurance given about completion of remaining work, complainants reposed faith in o.p. no.1 and accordingly entered into the agreement of sale with o.p. no.1 on 29/03/1998. said agreement is at exhibit-c.in the said agreement, it was conveyed by o.p. no.1 that possession would be handed over on 30/04/1998. thereafter, complainants made final payment of `64, 500/- and after that payment, complainant no.1 agreed to take temporary possession for furnishing the flat. he also paid certain other charges as demanded by the o.p. vide exhibit-m and receipts issued by o.p. no.1 evidencing receipt of payments with regard to electricity charges, etc. is at exhibit-m1. complainants pleaded that thus on 14/07/1998 total payment of flat was completed in every respect and on the same day, complainants wrote o.p. no.1 and asked them to issue final possession letter. however, o.p. no.1 failed to produce occupation certificate of bmc and consequently failed to hand over possession as promised and they merely issued a letter handing over temporary possession dated 17/07/1998. even on that date water connection of bmc was not obtained nor there was any approach road. construction of flat on site had come to standstill. according to the complainants, flat in their possession is certainly not habitable in any manner and was not certainly in a state for which they had bargained. o.p. no.1 has failed to give official legal possession to them even after 13 months of the originally promised date. since previous landlord asked the complainants to move out of his licence premises in july 1998, complainants had not option, but to shift to the flat under the guise of temporary possession of flat in july 1998, on which date, according to the complainants flat was neither habitable nor it was as per the agreement. but, they were required to shift to the said flat since otherwise they would have to take resort of bmc roads. complainants have pleaded in the complaint that following are the deficiencies in the said complex :– a) absence of approach road b) non-availability of regular water supply from bmc. c) absence of occupation certificate of bmc d) poor quality of construction and poor building maintenance. Listing these grievances, complainants have prayed that they should be refunded the amount of `12, 37, 500/- the purchase price paid to the o.p. no.1 by the complainants on 29/03/1998. they also prayed `4, 12, 500/- be refunded to them which o.p. no.1 collected by way of additional cash component. they also prayed that `1, 32, 000/- be reimbursed towards stamp duty, registration charges and brokerage paid by the complainants. they also prayed for `55, 835/- being reimbursement of the society maintenance charges paid by the complainants. further, amount of `1, 58, 450/- being financial burden incurred by the complainants in terms of licensed flat rents and interest @ 18% p.a. on the entire amount of consideration paid by the complainants and suitable compensation. o.p. filed affidavit in reply.in the affidavit, constituted attorney of o.p. no.1 mentioned that complaint as filed is not maintainable as the complaint filed by the complainants did not constitute any service and therefore, it should be dismissed with cost. he further stated in his affidavit in reply that complaint is pre-mature and in as much as, housing complex in which gaurav arpan is situated is a vast complex under construction as admitted by the complainants themselves and therefore, complaint of the complainants is false and imaginary and o. ps. are in the process of completing the housing complex and providing all the amenities. they have admittedly not abandoned the project and therefore, the complaint is pre-mature and should be dismissed. o. ps.in their affidavit stated that complainants had suppressed material fact from this commission that they themselves had requested for temporary possession of the flat for furniture and as per their request, possession of the flat was handed over to them to carry out furniture work as per their letter under exhibit-1. complainants also suppressed the fact that o. ps. agreed to complete the building gaurav arpan by 30/04/1998 as clearly mentioned in para 10 of the agreement annexed at exhibit-c to the complaint. complainants are clearly molding the facts to suit their convenience. complainants have filed this complaint just to pressurize them to refund the purchase price and other amounts and for this purpose the complaint has been filed. but, it is nothing but the abuse of process of law and should be dismissed. o. ps. pleaded that they never promised the complainants that the entire housing complex would be completed by june 1997. as per allotment letter and agreement annexed to the complaint, rate charged to the complainants was not fixed at 2, 000/- per sq. ft. as alleged by the complainants. o. ps. pleaded that date of possession was mutually extended by talking to complainants and in the agreement, it was specifically stated that expected date of possession was 30/04/1998. however, on 30/04/1998 no possession was given, but at the request of complainants as per exhibit-1, o. ps. handed over temporary possession of the flat to the complainants in july 1998 and consequently, complainants were not entitled in law for making any grievance in that regard. they pleaded that o. ps. are in the process of completing the entire complex but construction has been delayed on account of various factors, namely, sudden and continuous slump in the estate market and dealing with about 900 slum dwellers with several litigations, order of injunctions, etc. o. ps. pleaded that grievances of the complainants about the approach road is absolutely false. approach road of gaurav arpan building is already completed and street lights have been installed and they are functional. o. ps. pleaded that because of non-availability of water from bmc, it was pleaded that though regular supply is not given, mcgm is already supply water on humanitarian ground and therefore, grievance of non-availability of water made by the complainants is false. o. ps. pleaded that occupation certificate has been held up by the bmc on account of default in payment of property taxes committed by the complainants and other flat purchaser for the building. liability of the flat purchasers in the building is at present to the tune of `27 lakhs and only upon payment of said tax amount together with current property tax, if any, mcgm would issue occupation certificate. complainants are suppressing this relevant fact from this commission. they are taking advantages of their own wrong. o. ps. pleaded that when payment of entire property tax is made by complainants and other flat purchasers, then only they would procure occupation certificate from mcgm and consequently, mcgm would also grant bigger water connection for the said building. o. ps. pleaded that poor building maintenance is because of flat purchasers not paying maintenance charges. there was no builder’s liability to maintain the building. it is flat purchasers’ liability who are occupying their own flats.in the circumstances, o. ps. pleaded that grievance of the complainants regarding deficiencies in services are absolutely false and imaginary and even pre-mature since entire lay out is yet to be completed and after buildings are completed layout amenities would be provided by the o. ps. therefore, it pleaded that complaint should be dismissed with costs. parties filed their own affidavits in support of their respective pleadings. we heard submissions of both the parties. written arguments have been placed on record by counsel for the complainants. we also perused the same. following issues arise for our consideration and our findings thereon are as under :- issues findings 1. do the complainants prove that o. ps. have yes Not been procured occupation certificate From mcgm? 2. do the complainants prove that they have not yes given dream flat as promised by o. ps? 3. whether complainants are entitled to get yes compensation on two counts – 1) non- supply of municipal water and 2) non- procurement of occupation certificate? 4. what order? as per final order. Reasons Issue no.1 :- it is not in dispute that complainants took possession of the flat in july 1998 in terms of agreement executed between the parties on 29/03/1998. it is not in dispute that the full consideration was paid by the complainants. however, it is the grievance of the complainants that o. ps. have not procured occupation certificate. now, it is common knowledge that occupation certificate is an essential pre-requisite for giving legal possession of the flat to the person booking flat. unless occupation certificate is there, legally flat purchaser is not permitted to occupy the said flat. so, it is therefore sine-quo-non on the part of the builder/developer to procure completion certificate immediately after completion of the construction of the building.in this case, building was completed somewhere in june-july 1998. possession was given in on 31/07/1998 and though the complainants are occupying said flat their occupation is illegal because builder has not procured occupation certificate from the bmc. this is per se a deficiency in service. builder’s case is that property tax of the said building has not been paid by the occupants of the flats, but he did not adduce any evidence in that behalf. what is important to note is the fact that it is statutory as well as contractual obligation on the part of the builder to procure occupation certificate. then only, the flat purchasers can be put in possession of their respective flats. so, there is contractual as well as statutory deficiency in service on the part of builder/m/s. ravi ashish land developers ltd.in not procuring occupation certificate till this date since more than 10 years has lapsed from filing of the complaint. we therefore record our finding on issue no.1 in the affirmative. Issue no.2 :- it is the grievance of the complainants that they had booked flat in gaurav empire housing complex being developed by o.p. no.1. complex necessarily means a group of buildings with facility of swimming pool, gardens, gymnasium, club house, school, etc. and it is the complainants’ grievance that no such amenities have been provided by the builder though 13 years have elapsed since they took possession of the flat on 31/07/1998. builder’s case is that it is the housing complex of very large scale and about 900 hutments are required to be removed and therefore, he constructed only two buildings. gaurav arpan is one in which complainants had occupied the flat. he has not denied his liability to raise housing complex styled as ‘gaurav empire housing complex’ as exclusive home for exclusives. but, fact remains even after 13 years he could hardly construct two buildings and there is only one road leading to these buildings from the nearby municipal road which is having streetlight. nothing else is developed. therefore, grievance of the complainants that ‘a dream house in dream project’ which was catch word of o. ps./builder is nowhere seen and they are leaving in a very sorry state of affairs. housing complex is not fully developed by the builder. complainants mentioned that they are ashamed of their house given by the o.p. and their dream of a good house as per their advertisement published in the brochure has been shattered.in any view of the matter, we are finding that the state of affairs of the present building of the complainants which is seen from the photographs and which is admittedly surrounded by the hutments and slum dwellers, cannot be said to be a dream house which was advertised by the builder and therefore, there is deficiency in service on the part of builder in not building housing complex styled as ‘gaurav empire – exclusive home for the exclusives’ as per their advertisement and brochure. we therefore record our finding on issue no.2 in the affirmative. Issue no.3 :- it is no doubt true that occupation certificate is not procured by the builder and once occupation certificate is not there, the municipal corporation of greater mumbai is not releasing legal water connection to such society or to such building. when occupation certificate is not there, we have to presume that (leaving apart the affidavit of complainants) the building is not having legal water connection. no doubt, o.p./builder in his affidavit in reply stated that on humanitarian ground, municipal corporation was supplying water. but, such water supply can be withdrawn at any point of time because it was not legally given water connection. moreover, when water is being supplied on humanitarian ground, full supply of water per person of the family member is not released by the municipal corporation. so, the flat purchaser in such a situation gets reduced water supply than otherwise entitled to if they would have had legal water connection taken from the municipal corporation. so, on this count, complainants are entitled to get compensation for the deficiency in service on the part of o.p./builder. complainants have also claimed in their revised prayers that o.p. be directed to take back the flat from the complainants and complainants should be given compensation as per market value obtainable for such flat in that locality or builder should be directed to give any other flat of same carpet area in the same locality at his expenses or alternatively, complainants have claimed `70 lakhs being market value of the subject flat. complainants also asked compensation for mental harassment they suffered because of deficiency in service on the part of builder relating to the home of the complainants when they have spent entire lifetime income for procuring flat in housing complex. moreover, they have been given a flat of ordinary construction with no proper environment. we are finding that there has been deficiency in service on the part of o.p./builder in not developing whole of the housing complex as per brochure. builder has also not constructed swimming pool, garden, etc. building is surrounded by hutments and slum dwellers and it is an ordeal for persons like complainants to stay in such surrounding in their flat which is not having occupation certificate and legal water connection. despite the fact, that since july 1998 till 30th october 2010 nothing has been done to improve the situation of gaurav empire housing complex.in the circumstances, we are inclined to allow the complaint partly to give some reliefs to the complainants though we do not agree with the complainants that their agreement should be cancelled and they should be given back refund of moneys together with difference between the price of said flat and the market value of the flat which they would be required to purchase in 2010. what is important to note is the fact that the complainants had taken possession of the flat despite the fact that the building was not having occupation certificate and water connection. from the undated letter produced on record attached to the affidavit in reply, it is clear that the complainants were hard pressed to vacate their then existing leave and licence premises. landlord was after them and therefore, ultimately they approached the o.p./builder and took possession of the flat on emergency basis by end of july 1998. under these circumstances, they had taken possession of the flat and they have resided in the said flat for more than 12 years and now, they cannot be permitted to surrender this flat in favour of o.p. and to claim from o.p. refund of consideration paid plus difference in the current market value of the flat which they would be required to purchase. so, this prayer cannot be allowed, but some compensation will have to be granted to the complainants for the situation they are put in by the builder and for the obvious deficiency in service, builder is guilty. hence, we are of the view that amount of `5 lakhs should be granted as compensation for the mental harassment suffered by the complainants in requiring to take possession of such flat in their undeveloped ‘gaurav empire housing complex’. complainants are also required to be duly compensated for non-giving of occupation certificate of their flat though more than 12 years have elapsed. we are of the view that we should direct o.p./builder to pay `1, 000/- per month as compensation from 31/07/1998 till the builder actually procures occupation certificate from the municipal corporation of greater mumbai. this sort of penalty is required to be imposed so as to induce the builder to immediately procure occupation certificate for the said flat from the municipal corporation of greater mumbai, so that the complainants could live peacefully in the said flat and can have legal water connection from the municipal corporation. the builder will have to be directed to pay cost of `25, 000/- to the complainants since complainants are required to prosecute this complaint for last 10 years.in the circumstances, we pass the following order :- -: order :- 1. complaint is partly allowed. 2. o.p./builders are directed to pay a sum of `5 lakhs as compensation for mental harassment to the complainants for various deficiencies in service discussed above. 3. o. p/builders are further directed to pay `1, 000/- per month to the complainants right from 01/08/1998 till actual procurement of occupation certificate from the municipal corporate of greater mumbai. 4. o.p. /builders are further directed to pay `25, 000/- as cost of the complaint o the complainants and bear their own costs. 5. copies of the order be furnished to the parties. (s.p. lale) (p.n. kashalkar) member presiding judicial member