A builder's failure to obtain an occupation certificate is a deficiency in service under the Consumer Protection Act of 1988, according to the Supreme Court.

The bench comprising Justices DY Chandrachud and AS Bopanna observed that the flat purchasers are well within their rights as consumers to seek compensation as recompense for the owners' subsequent liability, such as payment of higher taxes and water charges, arising from the lack of an occupancy certificate.

Samruddhi Co-operative Housing Society Ltd filed a complaint, in this case, seeking a refund of the excess taxes and charges paid to the municipal authorities as a result of the builder, Mumbai Mahalaxmi Construction Pvt Limited, allegedly failing to provide adequate service.

The complainant claimed that because the builder failed to obtain an occupancy certificate, its members had to pay a 25% higher property tax and an additional 50% toward water charges as a result of the builder's failure to obtain an occupancy certificate.

The complaint was dismissed by the National Consumer Disputes Redressal Commission (NCDRC) because it was barred by limitation and was not maintainable because it was like a recovery proceeding rather than a consumer dispute.

According to NCDRC, the Housing Society is not a consumer under the Consumer Protection Act because it has sought reimbursement from the builder for higher charges paid to the municipal authorities.

India's National Consumer Disputes Redressal Commission (NCDRC) is a quasi-judicial body established in 1988 under the Consumer Protection Act of 1986. Its headquarters are in New Delhi. The commission is led by a Supreme Court of India judge who is either currently serving or has recently retired.

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