IMPORTANT POINT
Consumer Complaint – Limitation – Failure of respondent to obtain occupation certificate is a deficiency in service on part of Builder and constitutes continuing cause of action.

JUDGMENT :

Dr. Dhananjaya Y. Chandrachud, J

A Factual Background

1. The appeal arises from a judgment and order of the National Consumer Disputes Redressal Commission¹[“NCDRC”] dated 3 December 2018. The complaint was filed by the appellant for refund of the excess taxes and charges paid the appellant to the municipal authorities, due to the alleged deficiency of service of the respondent. By the impugned order, the NCDRC dismissed the complaint on the ground that it was barred by limitation and that it was not maintainable since it was in the nature of a recovery proceeding and not a consumer dispute.

2. The appellant is a co-operative housing society. The respondent constructed Wings ‘A’ and ‘B’ and entered into agreements to sell flats with individual purchasers in accordance with the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963²[“MOFA”]. The members of the appellant booked the flats in 1993 and were granted possession in 1997. According to the appellant, the respondent failed to take steps to obtain the occupation certificate from the municipal authorities. In the absence of the occupation certificate, individual flat owners were not eligible for electricity and water connections. Due to the efforts of the appellant, temporary water and electricity connections were granted by the authorities. However, the members of the appellant had to pay property tax at a rate 25% higher than the normal rate and water charges at a rate which was 50% higher than the normal charge.

3. On 8 July 1998, the appellant instituted a consumer complaint before the State Consumer Disputes Redressal Commission Mumbai³[“SCDRC”] seeking a direction to the respondent to obtain the occupation certificate. On 7 April 2014, the respondent made an offer of a one-time settlement to the appellant, which the appellant refused by a letter dated 18 April 2014 as it was allegedly lower than the amount owed by the respondent. By its judgment and order dated 20 August 2014, the SCDRC directed the respondent to obtain an occupancy certificate within four months. The SCDRC also directed the respondent to pay, inter alia Rs. 1,00,000/- towards reimbursement of extra water charges paid.

4. On 28 December 2015, the appellant sent a legal notice to the respondent demanding the payment of outstanding dues in an amount of Rs. 3,56,42,257/- . The respondent failed to comply with the demand. Thereafter, the appellant filed an application for execution of the order of the SCDRC dated 20 August 2014. The appellant also filed a complaint⁴[CC No. 1329 of 2016] before the NCDRC seeking payment of Rs. 2,60,73,475/- as reimbursement of excess charges and tax paid by the members of the appellant due to the deficiency in service of the respondent and Rs. 20,00,000/- towards the mental agony and inconvenience caused to the members of the appellant.

5. Before the NCDRC, the appellant claimed that the complaint was not barred by limitation as the payment of excess water usage charges and the non-issuance of occupancy certificate is a continuing cause of action. Even otherwise, the cause of action was stated to have arisen on 7 April 2014, when the respondent allegedly acknowledged its liability and agreed to pay an amount of Rs. 1 crore in settlement. The cause of action was also alleged to have arisen on 15 December 2015, when the respondent failed to pay t