SAMRUDDHI CO-OPERATIVE HOUSING SOCIETY LTD. versus MUMBAI MAHALAXMI CONSTRUCTION PVT. LTD.

Citation: [2022] 2 S.C.R. 376 · Decided: 11-01-2022 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 2 S.C.R.
[2022] 2 S.C.R. 376
376
SAMRUDDHI CO-OPERATIVE HOUSING SOCIETY LTD.
v.
MUMBAI MAHALAXMI CONSTRUCTION PVT. LTD.
(Civil Appeal No 4000 of 2019)
JANUARY 11, 2022
[DR. DHANANJAYA Y. CHANDRACHUD AND
A. S. BOPANNA, JJ.]
Consumer Protection Act, 1986 – ss.2(1)(d), 2(1)(g) and 24A
– Maharashtra Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963 – ss. 3,6
– Respondent made constructions and entered into agreements to
sell flats with individual purchasers – Appellant is a co-operative
housing society – Members of the appellant booked the flats in
1993 and were granted possession in 1997 – Respondent failed to
take steps to obtain occupation certificate from municipal authorities
– In absence of occupation certificate, individual flat owners were
not eligible for electricity and water connections – Temporary water
and electricity connections were granted by the authorities due to
efforts of appellant – Members of appellant society had to pay
property tax at a rate 25% higher than the normal rate and water
charges 50% higher than the normal charge – Appellant instituted
consumer complaint before State Consumer Disputes Redressal
Commission (SCDRC) Mumbai seeking direction to respondent to
obtain occupation certificate – SCDRC directed respondent to
obtain occupancy certificate within four months; and also directed
respondent to pay Rs. 1,00,000/- towards reimbursement of extra
water charges paid – Appellant sent legal notice to respondent
demanding payment of outstanding dues – Respondent failed to
comply with the demand – Appellant filed application for execution
of the order of SCDRC – Appellant also filed a complaint before
the NCDRC – NCDRC dismissed the complaint on the ground that it
was barred by limitation and that it was not maintainable under the
Consumer Protection Act, 1986 since it was in the nature of a
recovery proceeding and not a consumer dispute – Held: Respondent
was responsible for transferring the title to the flats to the society
along with the occupancy certificate – Failure of respondent to
obtain the occupation certificate is a deficiency in service for which
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respondent is liable – Continuous failure to obtain an occupancy
certificate is a breach of the obligations imposed on the respondent
under the Maharashtra Ownership Flats Act (MOFA) and amounts
to a continuing wrong – Appellants entitled to damages arising out
of this continuing wrong – Members of appellant society are well
within their rights as ‘consumers’ to pray for compensation as a
recompense for the consequent liability (such as payment of higher
taxes and water charges by the owners) arising from the lack of an
occupancy certificate – Rejecting the complaint as being barred by
limitation, when the demand for higher taxes is made repeatedly
due to lack of an occupancy certificate, is a narrow view which is
not in consonance with the welfare objective of Consumer Protection
Act 1986 – Complaint of appellants not barred by limitation – NCDRC
to dispose the complaint within three months – Limitation Act, 1963
– s.22.
Allowing the appeal, the Court
HELD: 1.1. Section 24A of the Consumer Protection Act
1986 provides for the period of limitation period for lodging a
complaint. A complaint to a consumer forum has to be filed within
two years of the date on which the cause of action has arisen. In
the instant case, the appellant has submitted that since the cause
of action is founded on a continuing wrong, the complaint is within
limitation. Section 22 of the Limitation Act 1963 provides for the
computation of limitation in the case of a continuing breach of
contract or tort. It provides that in case of a continuing breach of
contract, a fresh period of limitation begins to run at every moment
of time during which the breach continues. A continuing wrong
occurs when a party continuously breaches an obligation imposed
by law or agreement. Section 3 of the Maharashtra Ownership
Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act 1963 (MOFA) imposes certain
general obligations on a promoter. These obligations inter alia
include making disclosures on the nature of title to the land,
encumbrances on the land, fixtures, fittings and amenities to be
provided, and to not grant possession of a flat until a completion
certificate is given by the local authority. The responsibility to
obtain the oc

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