Its mandatory for builders to hand over all documents to co-op housing society

From Business Standard

Builders are legally required to hand over all documents to the co-operative housing society. However, builders seldom comply with this statutory obligation. As these are statutory compliances, the cause of action continues as long as the default continues. Here is a case where a builder was held liable several years later, was ordered to comply with the formalities and also pay compensation.

Salot Builders had undertaken a housing project at Juhu Koliwada in Mumbai. Those who had purchased flats in this project were given possession in 1975-1976. The following year, the Beach Resorts Co-operative Housing Society was formed and registered.

The Society repeatedly asked the builder to execute conveyance and hand over the title deeds. The Society also asked for various other documents that the builder is legally obliged to hand over to the Society. Since the builder did not comply, the Society, in 2009, filed a complaint before the Mumbai Suburban District consumer forum against Salot Builders and its partners. During the proceedings, it was found most of the partners had expired, except Chandrakant Salot. The Society deleted the names of the deceased partners without bringing the legal heirs on record, and proceeded against Chandarakant Salot alone.

The builder contested the case, saying the partnership firm of Salot Builders had been dissolved due to financial difficulties. Chandrakant Salot claimed due to advanced age, he was no longer in active business. He alleged the complaint had been belatedly filed to harass him, even though he had all along been willing to execute conveyance. He said in 1977, when the Society was formed, he had sent a draft of the conveyance deed for approval but the Society had not responded. He attributed the delay to the Society’s negligence. He also claimed all documents had been handed over to the Society. Chandrakant Salot argued the complaint should be dismissed as the legal heirs of the deceased partners had not been brought on record, and only he was being singled out and targetted.

The forum rejected Salot’s argument. It agreed with Vinod Sampat, the Society’s lawyer, that the builder was legally bound to execute conveyance in favour of the Society as provided under the Maharashtra Ownership Flats Act. The forum observed there was no evidence to substantiate the builder’s contention that the draft of the conveyance deed had been sent to the Society for approval. Similarly, there was no documentary evidence to prove that the builder had handed over the original title deed and other documents.

Accordingly, by its order of October 9, 2015, delivered by presiding officer A Z Telgote for the bench along with Members Kriti Kulkarni and S R Sanap, the Forum held that the builder was guilty of deficiency in service. It ordered the builder to hand over the property card, the clearance order from the Urban Land Ceiling Department, the development agreement between the builder and the land owners along with the power of attorney, the registration of the document, the permission and the plans given by the municipal corporation, the occupation certificate, the tax payment receipts, the title clearance certificate. The builder was also directed to pay Rs 15 lakh to the Society toward compensation and Rs 10,000/- as costs. The Forum also directed the builder to comply with the order within 30 days, or else pay the amount with 18 per cent interest.

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