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Debashis Sinha & Ors. vs M/s R.N.R. Enterprise & Ors.

Civil Appeal · 2023 INSC 114Decided 9 Feb 2023
Civil Appeal No. 3343 of 2020
S. Ravindra Bhat · Dipankar Datta

Background

Thirty-six flat owners in a housing complex on Kailash Ghosh Road, Kolkata, complained to the National Consumer Disputes Redressal Commission (NCDRC) in 2008 that the developers had never obtained the municipal Completion Certificate and had not delivered the playground, community hall, 33-foot road, KMC water supply, "beautified lake" and other amenities advertised in the brochure; a court-approved valuer had also documented construction defects. The developers argued the complaint was time-barred, that the buyers had taken possession in 2006 without objection, and that once sale deeds were registered it was the buyers' job to get the completion certificate. The NCDRC found the developers "casual" and guilty of unfair trade practice, yet dismissed the complaint, reasoning that the buyers "ought to have known what they were purchasing" and that both sides had broken the law by occupying flats without a completion certificate.

Decision Breakdown

The Supreme Court held the NCDRC's reasoning "indefensible." Consumer forums are almost always approached after purchase, so dismissing a complaint because the buyer "knew what they were purchasing" would defeat the whole purpose of the Consumer Protection Act. The Court noted the modern reality that buyers on bank loans are often compelled to take possession of incomplete flats, and taking possession does not forfeit the right to demand the promised services. On the completion certificate, a joint reading of sections 390, 393, 394 and 403 of the KMC Act with Rule 26 of the 1990 Building Rules makes it the builder's obligation to apply for it, not the flat owner's; the NCDRC had let the developers off contrary to law. The Court remitted the complaint to the NCDRC to decide afresh whether the brochure promises were honoured and to direct the developers to obtain the completion certificate, though it closed the chapter on the Rs 1.8 crore compensation claim (which lacked particulars and where the buyers too had occupied without a certificate), and asked the NCDRC to decide within about a year given the complaint was over 15 years old.

Lesson Learnt

Registering a sale deed or moving into your flat does not waive your right to the amenities the builder advertised; a consumer complaint about post-purchase deficiencies cannot be brushed aside on the ground that "you knew what you were buying." Obtaining the municipal completion certificate is the builder's statutory duty, not the flat owner's.

Official source (sci.gov.in)View Judgment (PDF)

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