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DEFICIENCY IN SERVICE BY BUILDERS IN CONTEXT WITH THE LATEST LAW LAID DOWN BY SUPREME COURT

Introduction:

The Housing Sector has been hit badly by the poor service and the mischievous deeds of the giant builders, which have crucified the dreams of the homebuyers. The homebuyers are left in the lurch by these builders. Even after investing their hard-earned money towards their residential homes and paying it in advance, the construction of their residential flats or apartments is not complete. The homebuyers have to avail loans from the bank and pay the EMI without even having possession of their residential homes/ property. Demanding Advance Payments, not properly registering flats, structural deficiency, and defects in title etc. affects the homebuyers adversely. All these are considered as deficiency in services by the builders. So therefore, to understand the meaning of deficiency and service, a look at the Consumer Protection Act 2019 is necessary.

Meaning of Deficiency:

Deficiency is defined under section 2(11) of the Consumer Protection Act, 2019 as any default, imperfection or shortcoming in the feature, quality, amount, nature, worth, authenticity, standard and capacity which requires to be maintained by the laws and statutes in function or any product/service claimed by the seller in its agreement/ contract, concerning the products and goods. It also includes any act of negligence, omission, or commission in the service of the seller which impacts the buyer.

Meaning of Service:

The term service has been defined under section 2(42) of the Act, which includes any service related to banking, insurance, telecom, finances, processing, transport, etc. These services in order to be covered within the act should not be free but must be in the paid form. In short, services are the intangible benefit to the consumer from the service providers. Some examples of services are Legal consultation from lawyers, medical checks by the doctor, teaching students, availing internet service etc.

Deficiency of Service under Consumer Protection Act, 2019:

The Consumer Protection Act, 2019 applies to all the goods and services as expressly covered under the service sectors in which there exists a relationship between buyer and seller such as the hospitality, entertainment, maintenance, railways, banks, electricity, construction, legal aid, telex, courier, insurance, education, transportation, aviation, hospitality etc. When there is any negligence, or omission in the service, which leads to inconvenience and harassment to the consumer, is when the deficiency in service is committed, which has legal consequences. Any company, corporation, private person, firm, government body etc., if provides a lack in the services, can be booked under the Act. The act protects the interest of consumers and acts against the deficiency in services by the service providers. It covers the services provided by the seller in the physical domain and also the services provided on the e-commerce platforms as per the new changes in the act.

Some Examples of the Deficiency in Service are:

1. Doctors’ inappropriate treatment of the patient, which increases the patient’s suffering, is a deficiency in service.

2. Hiring AC bus service for travel, but the bus does not provide AC service to the traveler is a deficiency in service.

There are many more examples to add to the deficiency in service by the sellers. The most recent judgment by the Apex Court on Deficiency in Service is on the relationship between the builder and the homebuyer, where the Builder's Failure to Provide Occupancy Certificate was considered a Deficiency of Services under the Consumer Protection Act, 1982. This judgment of the apex court came in an appeal against the order of the NCDRC, which dismissed the complaint of the housing society seeking a refund of the excess taxes and charges paid to the municipal authorities, on the grounds that the complaint is more like a recovery petition and not a consumer dispute.

Builder's Failure To Provide Occupancy Certificate Is Deficiency Of Services:

"Occupancy Certificate" is a document issued by the builder which permits the occupation of the building and permits access to civic utilities like water, electricity and sewage connections. Such a certificate is the prerequisite for the legal possession of the flat in a building and is issued by the municipal corporation under whose jurisdiction the builder's building falls. In Samruddhi Co-operative Housing Society Ltd. v Mumbai Mahalaxmi Construction Pvt. Ltd., the Hon'ble Supreme Court held that a builder's failure to provide the Occupancy Certificate ("OC") to flat owners is a deficiency of service under the Consumer Protection Act, 1986 and the homebuyers are the consumers of the service covered under the ambit of the act. Hence, it is well within their rights to seek compensation for the charges they had paid as property tax and utility charges. The buyers pay these extra charges as their builder does not provide the Occupancy Certificate to them, and hence the builder is liable to refund money to these buyers.

Conclusion:

As the nation will grow and develop, it is evident that it will face many legal hurdles and challenges on its way. Law in order to keep pace with these challenges need to grow and hence the new amendments. The higher judiciary has always acted proactively in defending the right of the consumer and laid down the whole jurisprudence on rights arising from different issues under the act.

References:

1.https://blog.ipleaders.in/analysis-deficiency-services-consumer-protection-act-2019/#:~:text=According%20to%20Section%202

2.https://economictimes.indiatimes.com/industry/services/property-/-cstruction/failure-of-builder-to-obtain-occupation-certificate-is-deficiency-in-service-sc/articleshow/88872491.cms?from=mdr

3.https://ssrana.in/articles/builder-failure-provide-occupancy-certificate/utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration

4.https://www.lexology.com/library/detail.aspx?g=e4640dbe-76ac-43b1-bcd0-e1ceeba3b80b