The National Consumer Disputes Redressal Commission, led by AVM J. Rajendra, found Canon Properties at fault for a service deficiency. They were held accountable for not passing on maintenance charges to the flat owners, which they had collected.
Here’s a quick summary of the case: The Residents Association of Dum Dum Club Town, who is the Complainant, pointed out that Canon Properties had signed sale agreements with the flat owners during the property’s development and sale. These agreements stated that the buyers should contribute to a sinking fund. The purpose of this fund was to manage, maintain, repair, and upkeep the residential building and other related contingencies for Dum Dum Club Town Estates. The agreed upon sinking fund was Rs. 30 per square foot. After the flats’ completion, the builder handed over the properties to the owners and transferred the management to the Residents’ Association. However, they failed to transfer the sinking fund, which amounted to Rs. 78,05,510. Despite several communications, the builder ignored this issue. The Complainant thus lodged a complaint in the State Commission, which was accepted. In response, the builder appealed against this order in the National Commission.
Canon Properties defended their actions by stating that the complaint was filed too late, hence was time-barred. They also held that they hadn’t transferred Rs. 78,65,000 because the Complainant allegedly occupied some of the builder’s properties illegally. The builder promised to provide an account of the sum once the Complainant returned the properties they were alleged to be unlawfully holding.
Upon reviewing the case, the Commission noted that the central concern was whether the builder had failed to transfer the sinking fund of Rs.78,05,510 to the Complainant Association. While the builder did hand over the flats and transferred maintenance responsibilities to the Association, they didn’t transfer the sinking fund. The Commission also clarified that the complaint wasn’t time-barred as the Association couldn’t have claimed the sinking fund earlier since it wasn’t incorporated yet. The builder’s refusal to transfer the fund even after repeated requests from the Association was seen as a continuous cause of action. The Commission dismissed the builder’s argument that the Association had forcefully occupied certain properties, stating that the builder had no right to withhold the sinking fund. If there were illegal possessions, the builder should have sought legal action separately.
The Commission ruled that Canon Properties must transfer the sinking fund collected from the flat owners for maintenance purposes. Their failure to do so was a service deficiency under Sections 2(1)(g) and 2(1)(o) of the Act. Therefore, the builder is required to pay Rs.78,05,510 to the Association with a 9% interest from the date of registration until full payment. The Commission referred to the case of Kamal Kishore & Anr. versus M/s. Supertech Limited, to clarify that maintenance charges are payable only after offering possession with the necessary occupancy certificate.
Finally, the Commission upheld the State Commission’s order and dismissed the appeal. The case was titled Canon Properties Pvt Ltd. Vs. Dum Dum Club Town Residents Association and the case number was F.A. No. 1784/2018.
