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NCDRC orders Raja Construction to pay Rs 6 crore for OC failure in Mumbai redevelopment
A Mumbai redevelopment project that began two decades ago has landed a builder in serious trouble. The has directed and its partners to pay a whopping ₹6 crore to for handing over flats without an and building far beyond the . The bench—comprising President Justice A.P. Sahi and Member Bharatkumar Pandya—held that the builder’s actions amount to a .
A 20-Year Wait for Occupation Certificate
In , the society, representing 33 members in Balaji Apartments at Santa Cruz (West), Mumbai, entered into a redevelopment agreement with Raja Construction. The builder was to demolish the old structures and erect two new towers, providing existing members flats with 20% extra carpet area for free. In return, the builder could sell the remaining flats and utilise TDR/FSI.
Physical possession of the new flats was handed over . But the builder never provided the sanctioned plans or the mandatory Occupation Certificate. When a society member filed an RTI application in , the shocking truth emerged: the construction deviated massively from the approved plans. The total sanctioned area was only 21,424 sq. ft. , while the builder had actually constructed 32,170 sq. ft. —an illegal excess of nearly 45% . This included an entirely unauthorised 12th floor in the ‘B’ Wing.
“The additional construction was in violation of the and therefore unauthorized,” the Commission noted. “Such additional is not only an but has also resulted in .”
Society Alleges Builder Pocketed Crores from Unauthorised Flats
The society argued that the builder sold the illegally constructed extra area, generating ₹32 crore from the free-sale flats. Despite repeated demands, the builder refused to regularise the excess construction or pay the requisite premium to obtain the OC. The absence of the certificate left residents paying higher municipal taxes and prevented them from getting proper water and electricity connections.
Clause 11.7 of the agreement stipulated that any increase in permissible FSI beyond 100% exclusive consumption would belong to the society. The builder, however, unilaterally pocketed the benefit.
Builder's Defence: Members Accepted Possession, Raised Illegal Constructions
Raja Construction countered that the complaint was barred by limitation since possession was taken in 2008 and the complaint filed in . It argued that members had certified satisfaction upon receiving their flats and that by the occupants—including complainant No. 2, Mr. Amrik Singh Suri—were the real reason the OC could not be obtained.
The builder also pointed to a pending suit before the , where it had sought correction of the property card area from 1,264.20 sq. mtrs. to 1,344 sq. mtrs. , claiming the discrepancy affected the FSI calculations. It argued the immense claim of ₹101 crore involved disputed questions of fact unsuitable for summary consumer proceedings.
NCDRC: Failure to Obtain OC is Continuing Deficiency
Rejecting the limitation objection, the Commission held that the absence of an Occupation Certificate is a under the ’s ruling in “The handing over of possession without the OC by the developer, in itself, is a ,” the bench emphasised.
The Commission also dismissed the builder’s plea that members’ illegal constructions blocked the OC. “It was for the developer to submit valid and sanctionable plans and to ensure speedy correction of the property card if it was viable. The builder cannot take shelter under the plea of ‘’,” it said.
In its legal analysis, the NCDRC found that the builder had “pocketed the fruits of additional ” and that the extra area (10,764 sq. ft.) could not be explained by the mere 70 sq. mtrs. discrepancy in plot area. Even if that discrepancy accounted for about 2,100 sq. ft. of construction, the remaining excess remained unjustified.
Key Observations
- “The illegal and intentional revenue and profits from illegal extra construction of nearly 45% have been pocketed by the OP by raising and selling extra construction in violation of the .”
- “Having illegally handed over the possession, the OPs now cannot be allowed to take shelter under the plea of ‘’ of the members.”
- “The non-obtaining of the OC and putting the members under the continuing risk of demolition of the building due to illegality in construction over a longish period of more than 20 years calls for .”
Court's Decision and Directions
The NCDRC partly allowed the complaint and issued the following orders:
- Raja Construction and its partners—Narendra V. Bhatia, Amitabh N. Bhatia, and Avinash N. Bhatia—are for the deficiency.
- They must pay ₹6 crore to the society within three months. If delayed, the amount will attract .
- The builder shall obtain the Occupation Certificate within 12 months and bear all charges, including .
- of ₹10 lakh must be paid within three months.
The society is directed to place the amount in a nationalised bank and decide its utilisation through a general body meeting as per law.
This ruling reinforces the principle that builders cannot escape liability for failing to secure an OC, especially when they have profited from unauthorised construction. The judgment serves as a strong deterrent against such unfair trade practices in the real estate sector.
