Bombay High Court : It is Illegal to occupy property without OC

law1By Accommodation Times News Services

A Division Bench comprising of Mr Justice S C Dharmadhikari and Mr Justice Gautam Patel sought action against 49 flats owners as well as a nursing home in two wings of a building with six wings in Sion East.
It is provided in clause (i) of section 4A,of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (MOFA) that a promoter (which term includes developer, builder etc.) shall not allow persons to enter into possession until a completion certification where such certificate is required to be given under any law, is duly given by the local authority and no person shall take possession of a flat until such completion certificate has been duly given by the local authority. We can see that these are the binding provisions but specific details thereof are left to the local authority, which means action for fulfillment of this mandatory condition will be governed by the Acts which govern development activities of the municipalities which are local authorities as well as planning authorities.
To take the example of Mumbai, the Development Control Regulations of the Mumbai Municipal Corporation are sanctioned under the Maharashtra Regional and Town Planning Act,1966. The provisions of this Act and the Mumbai Municipal Corporation Act have many parallel provisions. The section 353A of the Mumbai Municipal Corporation Act is in regard to completion certificates and permission to occupy or use. This section requires that every developer after completion of the building shall apply to the Commissioner within one month of the completion of construction, accompanied by a certificate in the form Schedule T signed by the person employed under section 344A i.e.qualified architect/surveyor approved by the Commissioner. The concerned engineers of the Corporation make a detailed inspection of the construction and if they are satisfied that the building is constructed as per the plan approved by the Corporation and that the rules, regulations and conditions are complied with, the Commissioner gives permission for the occupation of such building. What is implied in MOFA is this occupancy certificate. Under the Development Control Regulations the proformae of Building Completion Certificate, acceptance thereof and Occupancy Certificate are in Appendix XX,XXI and XXII.
Coming to the reality, there are thousands buildings in Mumbai which have not received Occupancy Certificate (OC). Whether all of them are eligible to be demolished? The answer to this question is generally No. There are various reasons for any building to be called illegal or unauthorized ,and type of action depends upon the nature of illegality or irregularity. A building built without any permission can be straightway demolished. However in case of a building which has built extra floors than permitted. The builder/owner can himself demolish the excess portion and apply for regularization. These were distinct examples. But there could be many other reasons for not getting OC. In the past it was it was found that many buildings have not been given OC for the simple reason after completion, necessary certificate of completion of plumbing work was not given by the approved plumber and that he is now not be found. In such cases where some procedural formalities were remained to be complied with and the buildings were otherwise fit to be given OC the Corporation itself took initiatives, obtained government approval for the action and after waiving minor conditions of procedure issued OCs under amnesty scheme.
What shall the flat owners of buildings without OCs do?
The flat owners of such buildings have no option other than to find out the reasons as to why OC was not given, and then proceed to make good those deficiencies . As aforesaid the Municipal Corporation provides help and guidance if they are approached.

Occupancy certificate :- On receipt of the acceptance of completion certificate in the form given at Annexure 19, the owner, through his licensed surveyor or his architect shall submit to the Commissioner a development completion certificate in the form given at Annexure 18 with three copies of the completion plan, one of which shall be cloth mounted for record. The Commissioner may inspect the work and after satisfying himself that there is no deviation from the sanctioned plans, issue an occupancy certificate in the form given at Annexure 20 or refuse to sanction the occupancy certificate within 21 days from the date of receipt of the said completion certificate, falling which the work shall be deemed to have been approved for occupation, provided the construction conforms to the sanctioned plans. One set of plans, certified by the Commissioner as the completed plans, shall be returned to the owner along with the occupancy certificate. Where the occupancy certificate is refused or rejected, the reasons for refusal or rejection shall be communicated to the owner in writing.
(8) Part occupancy certificate :- When requested by the owner, the Commissioner may issue a part occupancy certificate for a building or part thereof, before completion of the entire work as per the development permission, provided sufficient precautionary measures are taken by the holder to ensure public safety and health. The part occupancy certificate shall be subject to the owner’s indemnifying the Commissioner in the format given at Annexure-21


Under Real Estate (Regulation and Development) Act 2016, it is mandatory to register all ongoing real estate projects. Let us understand the provisions of the new Act. The Act will regulate all real estate development process and real estate transaction process in the country. The Act came into force from 1st May 2016.

Though housing is a state subject, new Act wants all state to establish Real Estate Regulatory Authority.  According to Sec 20 (1)  after the establishment of the Authority, which will be within one year from date of commencement (1st May 2016) all new and ongoing projects will have to register with the Authority within three months. The relevant section says :

3. (1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons

to purchase in any manner any plot, apartment or building, as the case may be, in any real

estate project or part of it, in any planning area, without registering the real estate project

with the Real Estate Regulatory Authority established under this Act:

Provided that projects that are ongoing on the date of commencement of this Act and

for which the completion certificate has not been issued, the promoter shall make an application

to the Authority for registration of the said project within a period of three months from the

date of commencement of this Act:

Now , the problem is hundreds and thousands of buildings do not Occupation Certificate. Once the Commencement Certificate along with IOD (Intimation of Disapproval) is granted the project is treated as under construction. Even after ten or fifteen years, the building is occupied, many transaction take place and housing finance availed but the building is not finished in the eye of law unless it gets Occupation Certificate (OC) or Building Completion Certificate (BCC) whichever is applicable.

All estate agents who sell flats in these buildings will also be liable to penalties imposed under the Act because the Act says in Sec 10 no broker should facilitate any sale in projects which do not have license or approval from RERA Authority. Any building which not got OC is under construction and all under construction buildings must be registered with RERA. If there is no license to the building or OC then all those who are instrumental will be liable for punishment which could be imprisonment and fine.

All builders who have not got the OC for their property need to register it with authority. One cannot run away with this provision as Authority are tracing unscrupulous builders who do not complete projects. Thousands of buildings in Mumbai, Pune, Bangalore, Delhi and elsewhere in the country have not got OC since last 15 to 20 years. All these buildings will have to be registered under the authority as under construction projects and builders will have to bring in OC. If not then no broker or no buyer will purchase properties without OC.

All the occupants of such building will have trace builders to get them OC or file consumer complaint against builders or start the process of getting OC of their own which requires huge capital and penalties.

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