SOME IMPORTANT EXCERPTS FROM SUPREME COURT JUDGMENTS in the past.

1) The below mentioned reference provides direction to the cases involving professionals who deliberately indulge in deviation from approved plan.

Reference ; 2004- Supreme Court cases 733.

Friends Colony Development Committee
vs.
State of Orisa [2004(8) SCC733] Civil appealno: 12984 of 1996, decided on 1-11-2004. para 25

Noteworthy excerpts from this judgment.

"Builders violate with impunity the sanctioned building plans and indulge deviations much to the prejudice of the planned development of the city and at the peril of the occupants of the premises constructed or of the inhabitants of the city at large. Serious threat is posed to ecology and environment and, at the same time, the infrastructure consisting of water supply, sewerage and traffic movement facilities suffer unbearable burden and are often thrown out of gear. Unwary purchasers in search of roof over their heads and purchasing flats from the builders find themselves having fallen prey and become victims to the design of unscrupulous builders. The builder conveniently walks away having pocketed the money leaving behind the unfortunate occupants to face the music in the event of unauthorized CONSTRUCTIONs being detected or exposed and threatened with demolition. Though the local authorities have the staff consisting of engineers and inspectors whose duty is to keep watch on building activities and to promptly stop the illegal CONSTRUCTIONs or deviations coming up, they often fail in discharging their duty, either they do not act or do not act promptly or do connive at such activities apparently for illegitimate considerations. If such activities are to stop, some stringent actions are required to be taken by ruthless demolishing the illegal CONSTRUCTIONs and non-compoundable deviations. The unwary purchasers who shall be the sufferers, must be adequately compensated by the builder. The arms of the law must stretch to catch hold of such unscrupulous builders. See calculation on page 13 of this paper. At the same time in order to secure vigilant performance of duties, responsibility should be fixed on the officials whose duty was to prevent unauthorized CONSTRUCTON, but who failed in doing so either by negligence or connivance'"[emphasis supplied.]"

"The conduct of the builder in the present case deserves to be noticed. He knew it fully well what was the permissible construction as per the sanctioned building plans and yet he not only constructed additional built up area on each floor but also added an additional fifth floor on the building, and such a floor was totally unauthorized. In spite of the disputes and litigation pending he parted with his interest in the property and inducted occupants on all the floors, including the additional one. Probably he was under the impression that he would be able to either escape the clutches of the law or twist the arm of the law by some manipulation. This impression must prove to be wrong."

"…..deliberate deviations do not deserve to be condoned and compounded. Compounding of deviations ought to be kept at a bare minimum. The cases of professional builders stand on a different footing from an individual constructing his own building. A professional builder is supposed to understand the laws better and deviations by such builders can safely be assumed to be deliberate and done with the intention of earning profits (illegitimately) and hence deserve to be dealt with sternly so as to act as a deterrent for future. It is common knowledge that the builders enter into underhand dealings. Be that as it may, the state government should think of levying heavy penalties on such builders and there-from develop a welfare fund which can be utilized for compensating and rehabilitating such innocent or unwary buyers who are displaced on account of demolition of illegal constructions."

"The officials who have connived at unauthorized or illegal constructions should not be spared. In developing cities the strength of staff which is supposed to keep a watch on building activities should be suitably increased in the interest of constant and vigilant watch on illegal or unauthorized constructions."

2) The predicament faced by the persons who deal with builders and promoters, was noticed by the court in Friends Colony Development Committee vs. State of Orisa [2004(8) SCC733] while dealing with town planning laws:

The builder cannot be permitted to avoid or escape the consequences of his illegal acts. The obligation on the part of the builder to secure a sanctioned plan and construct a building, carries with it an implied obligation to comply with the requirements of municipal and building laws and secure the mandatory permissions/certificates. (Para - 25) [728 C-D"

"Builders violate with impunity the sanctioned building plans and indulge deviations much to the prejudice of the planned development of the city and at the peril of the occupants of the premises constructed or of the inhabitants of the city at large. Serious threat is posed to ecology and environment and, at the same time, the infrastructure consisting of water supply, sewerage and traffic movement facilities suffer unbearable burden and are often thrown out of gear. Unwary purchasers in search of roof over their heads and purchasing flats from the builders find themselves having fallen prey and become victims to the design of unscrupulous builders. The builder conveniently walks away having pocketed the money leaving behind the unfortunate occupants to face the music in the event of unauthorized CONSTRUCTIONs being detected or exposed and threatened with demolition. Though the local authorities have the staff consisting of engineers and inspectors whose duty is to keep watch on building activities and to promptly stop the illegal CONSTRUCTIONs or deviations coming up, they often fail in discharging their duty, either they do not act or do not act promptly or do connive at such activities apparently for illegitimate considerations. If such activities are to stop, some stringent actions are required to be taken by ruthless demolishing the illegal CONSTRUCTIONs and non-compoundable deviations. The unwary purchasers who shall be the sufferers, must be adequately compensated by the builder. The arms of the law must stretch to catch hold of such unscrupulous builders. See calculation on page 13 of this paper. At the same time in order to secure vigilant performance of duties, responsibility should be fixed on the officials whose duty was to prevent unauthorized CONSTRUCTON, but who failed in doing so either by negligence or connivance'"[emphasis supplied.]

In Lucknow Development Authority vs M.K.Gupta [1994(1) referring to the nature and objection of the Act.

3) The below mentioned excerpts are from the Supreme Court of India; Civil appeal no 3302 of 2005. Faqir Chand Gulati vs Uppal Agencies Pvt Ltd & another. Date of Judgment 10-07-2008

"……..it (consumer protection act) was enacted ' to provide for the protection of the interest of consumers'…..In fact law meets long felt necessity of protecting the common man from such wrongs for which the remedy under ordinary law for various reasons has become illusory. Various legislations and regulations permitting the state to intervene and protect interest of the consumers have become a heaven for unscrupulous ones and the enforcement machinery either does not move or it moves ineffectively, inefficiently and for reasons which are not necessary to be stated. The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, 'a network of rackets' or a society in which, 'producers have secured power' to 'rob the rest' and the might of public bodies which are degenerating into store house of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked. The malady is becoming so rampart, wide spread and deep that the society instead of bothering, complaining and fighting for it, is accepting it as part of life. The enactment in these unbelievable yet harsh realities appears to be a silver lining, which may in course of time succeed in checking the rot……."

" Any defect in CONSTRUCTION activity would be denial of comfort and service to a consumer. When possession of property is not delivered with in stipulated period the delay so caused is denial of service. Such disputes or claims are not in respect of immovable property as argued but deficiency in rendering of service of particular standard, quality or grade. Such deficiencies or omission are defined in Sub-clause (ii) of Clause ( r) of Section 2 as unfair trade practice. If a builder of a house uses sub-standard material in CONSTRUCTION of a building or makes false or misleading representation about the condition of the house then it is denial of the facility or benefit of which a consumer is entitled to claim value under the Act. When the contractor or builder undertakes to erect a house or flats then it is inherent in it that he shall perform his obligations as agreed to. A flat with a leaking roof or cracking wall or sub-standard floor is denial of service."

"If the construction is part of a building which in law requires a completion certificate or C&D forms (relating to assessment), the builder is bound to provide the completion certificate or C&D forms. He is also bound to provide amenities and facilities like water, electricity and drainage in terms of the agreement. If the completion certificate and C&D forms are not being issued by the Corporation because the builder has made deviations/violations in construction, it is his duty to rectify those deviations or bring the deviations within permissible limits and secure a completion certificate and C&D forms from MCD. The builder can not say that he has constructed a ground floor and delivered it and therefore fulfilled his obligations. Nor can the builder contend that he is not bound to produce the completion certificate, but only bound to apply for completion certificate. He cannot say that he is not concerned whether the building is in accordance with the sanction plan or not, whether it fulfills the requirements of the municipal bye-laws or not, or whether there are violations or deviations. The builder cannot be permitted to avoid or escape the consequences of his illegal acts. The obligation on the part of the builder to secure a sanctioned plan and construct a building, carries with it an implied obligation to comply with the requirements of municipal and building laws and secure the mandatory permissions/certificates. "

26.The surviving prayer is no doubt only for a direction to the builder to furnish the completion certificate and C&D forms. It is not disputed that a building of this nature requires a completion certificate and building assessment (C&D forms). The completion certificate and C&D forms will not be issued if the building constructed is contrary to the bye-laws and sanctioned plan or if the deviations are beyond the permissible compoundable limits. The agreement clearly contemplates the builder completing the construction and securing completion certificate. The agreement, in fact, refers to the possibility of deviations and provides that if there are deviations, the builder will have to pay the penalties, that is do whatever is necessary to get the same regularized. Even if such a provision for providing completion certificate or payment of penalties is not found in the agreement, the builder cannot escape the liability for securing the completion certificate and providing a copy thereof to the owner if the law requires the builder to obtain completion certificate for such a building.<</b>/p>

27.A prayer for completion certificate and C&D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever that is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage. Therefore, the assumption of the State Commission and National Commission that the obligation of the builder was discharged when he merely applied for a completion certificate is incorrect.

PRIYANKA ESTATES I'NATIONAL P.LTD. & ORS
v.
STATE OF ASSAM & ORS. INSC 1782 [2009]
(3 December 2009)

Judgement IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.8026 OF 2009

[Arising out of SLP(C) No.14480 of 2006] Priyanka Estates International Pvt. Ltd. & Ors. ....Appellants Versus State of Assam & Ors. ....Respondents WITH C.A.NO.8025 OF 2009 [Arising out of SLP(C) No.15546 of 2006] C.A.NO.8027 OF 2009 [Arising out of SLP(C) No.15547 of 2006] C.A.NO.8028 OF 2009 [Arising out of SLP(C) No.16898 of 2006] AND C.A.NOS.8029-8032 OF 2009 [Arising out of SLP(C) Nos.28291-28294 of 2009]

Noteworthy excerpts from this judgment.

73. It is a matter of common knowledge that illegal and unauthorised constructions beyond the sanctioned plans are on rise, may be due to paucity of land in big cities. Such activities are required to be dealt with by firm hands otherwise builders/colonisers would continue to build or construct beyond the sanctioned and approved plans and would still go scot-free. Ultimately, it is the flat owners who fall prey to such activities as the ultimate desire of a common man is to have a shelter of his own. Such unlawful constructions are definitely against the public interest and hazardous to the safety of occupiers and residents of multi-storeyed buildings.

To some extent both parties can be said to be equally responsible for this. Still the greater loss would be of those flat owners whose flats are to be demolished as compared to the Builder.

74. Even though on earlier occasions also, under similar circumstances, there have been judgments of this Court which should have been a pointer to all the builders that raising unauthorised construction never pays and is against the interest of society at large, but, no heed to it has been given by the builders. Rules, regulations and bye-laws are made by Corporation or by Development Authorities, taking in view the larger public interest of the society and it is a bounden duty of the citizens to obey and follow such rules which are made for their benefit. If unauthorised constructions are allowed to stand or given a seal of approval by court then it is bound to affect the public at large. An individual has a right, including a fundamental right, within a reasonable limit, it inroads the public rights leading to public inconvenience, therefore, it is to be curtailed to that extent.

75. The jurisdiction and power of courts to indemnify a citizen for injuries suffered due to such unauthorised or illegal construction having been erected by builder/coloniser is required to be compensated by them. An ordinary citizen or a common man is hardly equipped to match the might and power of the builders.

76. In the case in hand, it is noted that number of occupiers were put in possession of the respective flats by the builder/developer constructed unauthorisedly in violation of the laws. Thus, looking to the matter from all angles it cannot be disputed that ultimately the flat owners are going to be the greater sufferers rather than builder who has already pocketed the price of the flat.

77. It is a sound policy to punish the wrong-doer and it is in that spirit that the courts have moulded the reliefs of granting compensation to the victims in exercise of the powers conferred on it. In doing so, the courts are required to take into account not only the interest of the petitioners and the respondents but also the interest of public as a whole with a view that public bodies or officials or builders do not act unlawfully and do perform their duties properly.

8. In the case in hand, admittedly, at no point of time Appellant No.1- M/s. Priyanka Estates International Pvt. Ltd. was able to show to its prospective purchasers the Occupancy Certificate or Completion Certificate issued by the authorities concerned. The same could not even be shown to us and without it, Appellant No.1 could not have embarked into sale of flats as it was mandatorily required.

79. The instant case is not a case of breach of contract. It is a clear case of breach of the obligation undertaken to erect the building in accordance with building regulations and failure to truthfully inform the warranty of title and other allied circumstances.

80. Even though at the first instance, we thought of invoking this Court's jurisdiction conferred under Article 142 of the Constitution of India so as to do complete justice between the parties and to direct awarding of reasonable/suitable compensation/interest to the flat owners, whose flats are ultimately going to be demolished, but, with a very heart, we have restrained ourselves from doing so, for variety of reasons and on account of various disputed questions that may be posed in the matter. However, we grant liberty to those, whose flats are ultimately going to be demolished, to exhaust the remedy that may be available to them in accordance with law.