By I C Naik
Maharashtra builders and developers had field day so far to take care of basics of housing societies. They have been made legally liable under Maharashtra Ownership Of Flats (Regulation Of The Promotion of Construction, Sale, Management And Transfer) Act, 1963 (Popularly called MOFA1963) for various compliances which were supposed to facilitate housing societies operate smoothly and concentrate on their object being providing amenities and common services to its members (Section 2(16) of the MCS Act 1960. Elaborate law casting all and sundry obligations on the developer were scuttled for decades to gather.
The State Administration has conceded its defeat in taming the developer lobby as evidenced in the preamble to its latest version 2012 yet to be notified. WHEREAS the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963,though enacted to provide for relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale,management and transfer of flats, it is noticed by the State Government that, the said Act did not provide for an effective implementing arm for its various statutory provisions.
Then came the rescuer in the form of Consumer Protection Act 1986. Though Housing Construction was a service to consumer it did not catch up till in 1993 when this service was added to the illustrative list of services covered by the Act. The cases concluded under this Act has started creating impact and has left the Government and the Courts way behind in providing redress to the housing societies.
This storey is of Dhurv Cooperative Housing Society Limited part of a project called “Dhruv Park“ at Orlem in Malad in Mumbai in which City Life Developers were responsible for the construction of several residential buildings. Dhurv CHS is situated in one of the buildings called Agarwal Trinity Towers, comprising 24 floors. Around 2005, Sale agreements with prospective members were executed and possession was completed over three year period ending March 2008.
Dhrove CHS had made out a strong case of host of deficiencies in services like:
1.The Developers had not drawn a conveyance deed in its favour
2.There was no water, and the society had to obtain a connection at a higher rate in the absence of an occupancy certificate.
3.The property tax had not been cleared
4.There were leakages in the flats
5.No recreation ground, clubhouse and swimming pool, though promised
6.Shortage of exterior open space required to be maintained around buildings as per the Development Control Regulations.
7.The parking spaces were sold off illegally
8.A corpus of Rs 35.2 lakh was not given to the society
The society issued a legal notices and went to the NCDRC with a complaint against Dhruv Constructions as well as City Life Developers and their partners.
The Developer’s defense that the complaint was time-barred as the possession was given more than four years ago. It’s lame defense was that the conveyance deed was pending as it had to be executed in favour of a federation to be formed of all societies after completion of the entire project.
The commission saw full merits in Society’s argument on time barring that the cause of action would continue till the execution of the conveyance deed. It also recognized held that the complaint was within limitation. In this case, there was no water connection, and even the occupancy certificate was still to be obtained, both weighed heavily in defense of time barring argument. The commission rejected the excuses put forth by the builders. It said that no matter what the reason, conveyance would have to be executed in favour of the federation, and if this was not possible, giving a separate conveyance to the society within one year was directed. If delayed, the builders were made liable to pay the society a penal compensation of Rs 5,000 per day. Justice J M Malik along with Dr S M Kantikar reportedly delivered the judgment, on February 1, 2016.
Brief details of the reliefs were:
1.The builders to reimburse Rs 5,50,900 incurred to obtain water connection and for borewell payable along with 12% interest from the date of the complaint.
2.The builder to provide separate tanks, one for borewell water to be used for sanitary purpo ses, and the other for municipal water for potable purposes.
3.The builders are to bear 50% charges billed by the municipal corporation, right from the inception till such time as the occupancy certificate was obtained.
4.The builders to make clubhouse facilities available within 90 days, failing which pay a penal compensation of Rs 5,000 till compliance of the direction.
5.The builders to refund the amount charged for allotment of car parking space along with 12% interest from the date of payment till refund.
6.The builders to hand over the Rs 35.2 lakh corpus along 12% interest from April 12, 2009, when the default was committed, till realization.
7.The builders to refund Property tax of Rs 27.17 lakh paid by the society on behalf of the builders along with 12% interest.
8.The builders to refund the Maintenance charges collected for the period prior to handing over the possession.
9.The builders are to reimburse Rs 2 lakh spent by the society for fencing of the duct area.
10.Awarded Rs 3 lakh as litigation costs to be paid within 90 days, else with 12% interest thereafter.
The State may well draw the lessons and better leave the handling of erring real estate players to be dealt with under Consumer Protection Act 1986 as it is proving to be an effective remedy. The Regulation Act 2012 may be remodeled to deal with local issues but as far as protecting purchaser’s interest is concerned national enactment is proving far more effective.