The Division Bench of Hon’ble Bombay High Court, in the case of Najma Aslam Merchant versus The State of Maharashtra held that there is no concept of a flat-wise Occupancy Certificate (“OC”). OCs are issued to the part or whole of a built structure i.e., either a whole building or up to a specified floor.

Brief Facts:

The Petitioner herein had filed a Writ Petition before the Bombay High Court to facilitate the redevelopment of building known as Quettawala Residency wherein she owned two flats on the 7th floor. After filing the Writ Petition the parties agreed to settle their dispute by entering into Consent Terms on 16 March 2023.

As per the Consent Terms, the Respondent Nos. 7 to 10 were required to apply for the OC in connection with the new building by 20 June 2023 and in the event the Respondent Nos. 7 to 10 failed to obtain the OC they would be liable for payment to Petitioner. Since, the OC was not received by 20 June 2023, the Petitioner filed a Contempt Petition before the Hon’ble Bombay High Court alleging disobedience of an order of the High Court.

Contention of the Parties:

The Petitioners contented that the Respondent Nos. 7 to 10 failed to obtain the OC by 20 June 2023. On failure of the Respondent Nos. 7 to 10 to obtain OC, no amount received by the Petitioner. The Respondents Nos. 7 to 10 argued that the there is no liability to pay because an OC for two flats and only two flats was obtained on 22 June 2023.

Held:

The Division Bench of Bombay High Court rejected the submission made by the Respondents Nos. 7 to 10 holding that there is no concept of a flat-wise OC. OCs are issued for either part or whole of the build structure i.e., either a whole building or up to a specified floor. The Court further held that it would inconceivable that there could be water supply to two flats on the 7th floor but not to other flats on that floor nor to any of the flats above or below the 7th floor.

The Division Bench held that the Municipal Corporation of Greater Mumbai (“MCGM”) must not be misled by any individual into granting certificates contrary to the law. The Court further held that it is always open to any officer of the MCGM to refuse to grant any such OC which is obtained for a particular floor.

The Court further held that it is not open to the developer to go to MCGM citing the consent terms and the order of the High Court and demand issuance of the OC in a manner not contemplated by law.

The Court concluded that the concept of a part OC or an OC applied to the building and not to individual tenements in the building.

MHCO Comment:

The division bench has made an important decision by explaining that a part Occupancy Certificate (OC) cannot be given for individual tenements. They specifically directed the municipal authorities not to approve requests for OCs that apply only to a specific floor.

This decision is a positive move to protect individuals who have faced difficulties with developers. This order is a welcome step to ensure that individuals are not harassed by delays in obtaining OCs for their homes.

Authors: Bhushan Shah - Partner | Hasti Parekh - Associate

This update was released on 29 Jan 2024.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or legalupdates@mhcolaw.com for any assistance.

Legal Update Team
MANSUKHLAL HIRALAL & COMPANY
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