Holding

The builder's failure to obtain the occupancy certificate is a continuing wrong and a deficiency in service, making the society a consumer entitled to compensation, and the complaint is not barred by limitation.

Summary

The appellant, a co‑operative housing society, booked flats from the respondent builder in 1993 and took possession in 1997, but the builder never obtained the required occupancy certificate. Because of this omission, the flat owners had to pay substantially higher property tax and water charges and could not obtain regular electricity and water connections. The society filed a consumer complaint in 1998 seeking an order for the builder to obtain the occupancy certificate and compensation for the excess charges; the State Consumer Disputes Redressal Commission directed the builder to obtain the certificate and pay a sum, but the builder failed to comply. The National Consumer Disputes Redressal Commission dismissed the appeal, holding it barred by limitation and that the society was not a consumer. On appeal, the Supreme Court held that the builder’s failure to obtain the occupancy certificate constituted a continuing wrong and a deficiency in service, making the society a consumer entitled to compensation, and that the complaint was not time‑barred under the doctrine of a continuing cause of action. Consequently, the Court allowed the appeal and remanded the matter to the NCDRC for disposal on merits within three months.

Issues considered

The whether the failure to obtain an occupancy certificate by the builder amounts to a deficiency in service under the Consumer Protection Act, 1986.
Whether the appellant society qualifies as a 'consumer' for purposes of the Consumer Protection Act.
Whether the complaint is barred by limitation or is maintainable as a continuing cause of action under Section 24A of the CPA and Section 22 of the Limitation Act.
The extent of liability of the builder for higher taxes and water charges incurred by the flat owners due to the absence of an occupancy certificate.

Legislation cited

Consumer Protection Act, 1986s. 2(1)(d), s. 2(1)(g), s. 24A
Limitation Act, 1963s. 22
Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963s. 3, s. 6

Subjects

Consumer Protection ActContinuing wrongLimitation periodOccupancy certificateDeficiency in serviceCo‑operative housing societyCompensationMOFAConsumer dispute

Judgment

376 SUPREME COURT
[2022]REPORTS
2 S.C.R. 376 [2022] 2 S.C.R.

A SAMRUDDHI CO-OPERATIVE HOUSING SOCIETY LTD.
v.
MUMBAI MAHALAXMI CONSTRUCTION PVT. LTD.
(Civil Appeal No 4000 of 2019)
B JANUARY 11, 2022
[DR. DHANANJAYA Y. CHANDRACHUD AND
A. S. BOPANNA, JJ.]
Consumer Protection Act, 1986 – ss.2(1)(d), 2(1)(g) and 24A
– Maharashtra Ownership Flats (Regulation of the Promotion of
C
Construction, Sale, Management and Transfer) Act, 1963 – ss. 3,6
– Respondent made constructions and entered into agreements to
sell flats with individual purchasers – Appellant is a co-operative
housing society – Members of the appellant booked the flats in
1993 and were granted possession in 1997 – Respondent failed to
D take steps to obtain occupation certificate from municipal authorities
– In absence of occupation certificate, individual flat owners were
not eligible for electricity and water connections – Temporary water
and electricity connections were granted by the authorities due to
efforts of appellant – Members of appellant society had to pay
property tax at a rate 25% higher than the normal rate and water
E
charges 50% higher than the normal charge – Appellant instituted
consumer complaint before State Consumer Disputes Redressal
Commission (SCDRC) Mumbai seeking direction to respondent to
obtain occupation certificate – SCDRC directed respondent to
obtain occupancy certificate within four months; and also directed
F respondent to pay Rs. 1,00,000/- towards reimbursement of extra
water charges paid – Appellant sent legal notice to respondent
demanding payment of outstanding dues – Respondent failed to
comply with the demand – Appellant filed application for execution
of the order of SCDRC – Appellant also filed a complaint before
the NCDRC – NCDRC dismissed the complaint on the ground that it
G
was barred by limitation and that it was not maintainable under the
Consumer Protection Act, 1986 since it was in the nature of a
recovery proceeding and not a consumer dispute – Held: Respondent
was responsible for transferring the title to the flats to the society
along with the occupancy certificate – Failure of respondent to
H obtain the occupation certificate is a deficiency in service for which
376
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 377
PVT. LTD.

respondent is liable – Continuous failure to obtain an occupancy A
certificate is a breach of the obligations imposed on the respondent
under the Maharashtra Ownership Flats Act (MOFA) and amounts
to a continuing wrong – Appellants entitled to damages arising out
of this continuing wrong – Members of appellant society are well
within their rights as ‘consumers’ to pray for compensation as a
B
recompense for the consequent liability (such as payment of higher
taxes and water charges by the owners) arising from the lack of an
occupancy certificate – Rejecting the complaint as being barred by
limitation, when the demand for higher taxes is made repeatedly
due to lack of an occupancy certificate, is a narrow view which is
not in consonance with the welfare objective of Consumer Protection C
Act 1986 – Complaint of appellants not barred by limitation – NCDRC
to dispose the complaint within three months – Limitation Act, 1963
– s.22.
Allowing the appeal, the Court
HELD: 1.1. Section 24A of the Consumer Protection Act D
1986 provides for the period of limitation period for lodging a
complaint. A complaint to a consumer forum has to be filed within
two years of the date on which the cause of action has arisen. In
the instant case, the appellant has submitted that since the cause
of action is founded on a continuing wrong, the complaint is within E
limitation. Section 22 of the Limitation Act 1963 provides for the
computation of limitation in the case of a continuing breach of
contract or tort. It provides that in case of a continuing breach of
contract, a fresh period of limitation begins to run at every moment
of time during which the breach continues. A continuing wrong
occurs when a party continuously breaches an obligation imposed F
by law or agreement. Section 3 of the Maharashtra Ownership
Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act 1963 (MOFA) imposes certain
general obligations on a promoter. These obligations inter alia
include making disclosures on the nature of title to the land, G
encumbrances on the land, fixtures, fittings and amenities to be
provided, and to not grant possession of a flat until a completion
certificate is given by the local authority. The responsibility to
obtain the occupancy certificate from the local authority has also

H
378 SUPREME COURT REPORTS [2022] 2 S.C.R.

A been imposed under the agreement to sell between the members
of the appellant and the respondent on the latter. [Para 11,12 and
15][386-C-E; 389-G-H; 390-A-B]
1.2. Sections 3 and 6 of the MOFA indicate that the promoter
has an obligation to provide the occupancy certificate to the flat
B owners. Apart from this, the promoter must make payments of
outgoings such as ground rent, municipal taxes, water charges
and electricity charges till the time the property is transferred to
the flat-owners. Where the promoter fails to pay such charges,
the promoter is liable even after the transfer of property.
[Para 17][390-F-H]
C
1.3. Based on these provisions, it is evident that there was
an obligation on the respondent to provide the occupancy
certificate and pay for the relevant charges till the certificate has
been provided. The respondent has time and again failed to
provide the occupancy certificate to the appellant society. For
D this reason, a complaint was instituted in 1998 by the appellant
against the respondent. The NCDRC on 20 August 2014 directed
the respondent to obtain the certificate within a period of four
months. Further, the NCDRC also imposed a penalty for any delay
in obtaining the occupancy certificate beyond these 4 months.
E Since 2014 till date, the respondent has failed to provide the
occupancy certificate. Owing to the failure of the respondent to
obtain the certificate, there has been a direct impact on the
members of the appellant in terms of the payment of higher taxes
and water charges to the municipal authority. This continuous
failure to obtain an occupancy certificate is a breach of the
F obligations imposed on the respondent under the MOFA and
amounts to a continuing wrong. The appellants therefore, are
entitled to damages arising out of this continuing wrong and their
complaint is not barred by limitation. [Para 18][390-H]
2. The continuing wrong in the present case is the failure
G to obtain the occupancy certificate. Against this act of the
respondent, the appellant society has taken appropriate action
by filing a complaint before the consumer forum. The appellant is

H
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 379
PVT. LTD.

currently pursuing the execution of the order of the SCDRC A
arising from that complaint. However, that itself does not preclude
it from claiming compensation for the consequences which have
arisen out of this continuing wrong. The failure to obtain the
occupancy certificate has resulted in the levy of higher taxes on
the members of the appellant society repeatedly by the municipal
B
authorities. Despite the order of 20 August 2014, the respondent
has failed to obtain the occupancy certificate. This has resulted
in a situation where the appellant, despite having followed the
correct course of litigation in demanding the furnishing of an
occupancy certificate, will continue to suffer the injury inflicted
by the respondent merely due to the delay in the execution of C
the order against the respondent. Rejecting the complaint as
being barred by limitation, when the demand for higher taxes is
made repeatedly due to the lack of an occupancy certificate, is a
narrow view which is not in consonance with the welfare objective
of the Consumer Protection Act 1986. [Para 19][391-E-H;
D
392-A-B]
3. Section 2(1)(d) of the Consumer Protection Act defines
a ‘consumer’ as a person that avails of any service for a
consideration. A ‘deficiency’ is defined under Section 2(1)(g) as
the shortcoming or inadequacy in the quality of service that is
required to be maintained by law. In the present case, the E
respondent was responsible for transferring the title to the flats
to the society along with the occupancy certificate. The failure of
the respondent to obtain the occupation certificate is a deficiency
in service for which the respondent is liable. Thus, the members
of the appellant society are well within their rights as ‘consumers’ F
to pray for compensation as a recompense for the consequent
liability (such as payment of higher taxes and water charges by
the owners) arising from the lack of an occupancy certificate.
[Paras 21 & 22][392-C-D, F-G]
Wing Commander Arifur Rahman Khan & Others v. DLF G
Southern Homes Private Limited & Others (2020) 16
SCC 512 : [2020] 9 SCR 136; Pioneer Urban Land
Infrastructure Limited v. Govindan Raghavan (2019) 5
SCC 725 : [2019] 5 SCR 1169 – relied on.

H
380 SUPREME COURT REPORTS [2022] 2 S.C.R.

A Balakrishna Savalram Pujari Waghmare v. Shree
Dhyaneshwar Maharaj Sansthan AIR 1959 SC 798 :
[1959] 2 Suppl. SCR 476; CWT v. Suresh Seth (1981)
2 SCC 790 : [1981] 3 SCR 419; M. Siddiq v. Suresh
Das (2020) 1 SCC 1 : [2019] 18 SCR 1 and Treaty
Construction v. Ruby Tower Cooperative Housing
B
Society Ltd. (2019) 8 SCC 157 : [2019] 9 SCR 606 –
referred to.
Case Law Reference
[1959] 2 Suppl. SCR 476 referred to Para 12
C [1981] 3 SCR 419 referred to Para 13
[2019] 18 SCR 1 referred to Para 14
[2020] 9 SCR 136 relied on Para 21
[2019] 5 SCR 1169 relied on Para 21
D
[2019] 9 SCR 606 referred to Para 21
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4000
of 2019.
From the Judgment and Order dated 03.12.2018 of the National
E Consumer Disputes Redressal Commission, New Delhi in Consumer
Case No.1329 of 2016.
Sunil Fernandes, Hitesh Rajpurohit, Ms. Nupur Kumar, Prastut
Dalvi, Darpan Sachdeva, Shubham Sharma, Advs. for the Appellant.
Atul Babasaheb Dakh, Adv. for the Respondent.
F
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
A Factual Background..................................................3*
B Submissions of Counsel.............................................6*
G
C Analysis....................................................................9*
D Conclusion..............................................................17*

H * Ed. Note : Pagination is as per the original Judgment.
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 381
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

A Factual Background A
1. The appeal arises from a judgment and order of the National
Consumer Disputes Redressal Commission1 dated 3 December 2018.
The complaint was filed by the appellant for refund of the excess taxes
and charges paid the appellant to the municipal authorities, due to the
alleged deficiency of service of the respondent. By the impugned order, B
the NCDRC dismissed the complaint on the ground that it was barred
by limitation and that it was not maintainable since it was in the nature of
a recovery proceeding and not a consumer dispute.
2. The appellant is a co-operative housing society. The respondent
constructed Wings ‘A’ and ‘B’ and entered into agreements to sell flats C
with individual purchasers in accordance with the Maharashtra
Ownership Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act 19632. The members of the appellant
booked the flats in 1993 and were granted possession in 1997. According
to the appellant, the respondent failed to take steps to obtain the D
occupation certificate from the municipal authorities. In the absence of
the occupation certificate, individual flat owners were not eligible for
electricity and water connections. Due to the efforts of the appellant,
temporary water and electricity connections were granted by the
authorities. However, the members of the appellant had to pay property
tax at a rate 25% higher than the normal rate and water charges at a E
rate which was 50% higher than the normal charge.
3. On 8 July 1998, the appellant instituted a consumer complaint
before the State Consumer Disputes Redressal Commission Mumbai3
seeking a direction to the respondent to obtain the occupation certificate.
On 7 April 2014, the respondent made an offer of aone-time settlement F
to the appellant, which the appellant refused by a letter dated 18 April
2014 as it was allegedly lower than the amount owed by the respondent.
By its judgment and order dated 20 August 2014, the SCDRC directed
the respondent to obtain an occupancy certificate within four months.
The SCDRC also directed the respondent to pay, inter alia Rs. 1,00,000/ G
- towards reimbursement of extra water charges paid.

1
“NCDRC”
2
“MOFA”
3
“SCDRC” H
382 SUPREME COURT REPORTS [2022] 2 S.C.R.

A 4. On 28 December 2015, the appellant sent a legal notice to the
respondent demanding the payment of outstanding dues in an amount of
Rs. 3,56,42,257/- . The respondent failed to comply with the demand.
Thereafter, the appellant filed an application for execution of the order
of the SCDRC dated 20 August 2014. The appellant also filed a complaint4
before the NCDRC seeking payment of Rs. 2,60,73,475/- as reimbursement
B
of excess charges and tax paid by the members of the appellant due to
the deficiency in service of the respondent and Rs. 20,00,000/- towards
the mental agony and inconvenience caused to the members of the
appellant.

C 5. Before the NCDRC, the appellant claimed that the complaint
was not barred by limitation as the payment of excess water usage
charges and the non-issuance of occupancy certificate is a continuing
cause of action. Even otherwise, the cause of action was stated to have
arisen on 7 April 2014, when the respondent allegedly acknowledged its
liability and agreed to pay an amount of Rs. 1 crore in settlement. The
D cause of action was also alleged to have arisen on 15 December 2015,
when the respondent failed to pay the amount demanded by the appellant.
Thus, the complaint was, according to the appellant, filed within the
prescribed period of limitation under Section 24A of the Consumer
Protection Act 1986.
E
6. By the impugned order, the NCDRC held that the complaint
was barred by limitation as:
(i) The members of the appellant booked the flats in 1993 and
obtained possession in 1997, which they have continued to
F enjoy since then. The possession was obtained against the
law as no occupancy certificate had been provided by the
respondent-builder;
(ii) The cause of action arose at the time when the appellant
made efforts to obtain individual water and electricity
G connections and the municipal authorities ordered the
members to pay higher charges. The complaint should have
been filed within two years of the accrual of the cause of
action;

4
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SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 383
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

(iii) Since the cause of action arose on the date when the A
municipal authorities demanded payment of higher taxes
and charges, the period of limitation also commenced from
this date and cannot be extended by the communication
between parties;
(iv) With respect to the claim that there was a continuing cause B
of action due to non-availability of the occupancy certificate,
no relief was sought by the appellant in their complaint
regarding the obtaining of an occupancycertificate. The only
relief which was sought is a refund of Rs. 2.60 crores for
payment of higher taxes.
C
7. On the merits of the dispute, the NCDRC observed that the
complaint was filed for refund of the excess amount paid by the appellant
to the authorities. In essence, the complaint was filed for recovery of
this excess amount from the respondent. The NCDRC held that the
respondent was not the service provider of the services for which the D
property tax or water charges were levied. Since these services were
provided by the municipal authorities, the NCDRC held that the appellant
would not fall under the definition of ‘consumer’ under Section 2(1)(d)
of the Consumer Protection Act 1986. Thus, the NCDRC dismissed the
complaint as being barred by limitation and as being not maintainable
under the Consumer Protection Act 1986. E

B Submissions of Counsel
8. Mr Sunil Fernandes, counsel for the appellant, urged the
following submissions:
(i) There is a continuing cause of action in the present case as F
the respondent has failed to provide the occupancy
certificate;
(ii) Due to the failure of the respondent to obtain the occupancy
certificate, the members of the appellant have had to pay a
25% higher amount on account of the property tax and an G
additional 50%towards the water charges;
(iii) Under Section 6 of the MOFA, it is the duty of the builder
to provide the occupancy certificate to the society, which
the respondent has failed to fulfil;
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384 SUPREME COURT REPORTS [2022] 2 S.C.R.

A (iv) Prior to the order of the SCDRC, the respondent offered to
pay an amount of Rs. 1 crore as a one-time settlement
amount towards payment of the extra charges or penalty
incurred by the appellant for the increased property tax and
water charges;
B (v) The offer of a one-time settlement had no relation to the
complaint pending before the SCDRC as the relief claimed
before the SCDRC was for the grant of an occupancy
certificate and payment of penalty to the appellant for excess
charges and deficiencies;
C (vi) When the residents started residing in the society’s premises,
they had to incur increased amount towards the property
tax and water charges. These charges were levied on an
annual basis and continue to be raised due to the failure of
the respondent to obtain an occupancy certificate;

D (vii) The conduct of the respondent has been improper. The
respondent has not obtained the occupancy certificate even
twenty four years after giving possession and has not
complied with the order of the SCDRC dated 20 August
2014. Due to the failure of the respondent to comply with
the order of the SCDRC, non-bailable warrants have been
E issued against the respondent; and
(viii) Under the MOFA and the agreement to sell with the
members of the appellant, the respondent has an obligation
to obtain the occupancy certificate. Due to the deficiency
in service, the members of the appellant have had to make
F excess payment. Thus, the appellant is a consumer under
the Consumer Protection Act 1986.
9. Opposing these submissions, Mr Atul Babasaheb Dakh,
appearing on behalf of the respondent submitted that:
(i) When the construction of the project was completed in 1997,
G
the respondent applied for an occupancy certificate.
However, the respondent did not offer possession to the
flat-purchasers;
(ii) The members of the appellant society took possession of
their flats to refurbish the interiors and to make suitable
H
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 385
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

arrangements till the occupancy certificate was issued. A
Instead, they started occupying the premises and made
arrangements for water and electricity by paying additional
charges;
(iii) The members of the appellant made unauthorized
constructions due to which there was a delay in obtaining B
the occupancy certificate;
(iv) The proposal for one-time settlement in 2014 did not pertain
to the additional property tax and water charges;
(v) In the consumer complaint filed by the appellant in 1998,
the appellant had raised the issue of excessive water charges C
and the SCDRC had directed payment of Rs. 1,00,000/- to
them. On 2 May 2016, the appellant society received an
amount of Rs. 11,55,885/- in the proceedings for execution
ofthe order dated 20 August 2014 of the SCDRC;
(vi) The complaint is barred by limitation as the cause of action D
arose in 1997 and the complaint was filed 18 years later;
(vii) The appellant’s failure to incorporate their present grievances
in the prior complaint before the SCDRC indicates
relinquishment of their grievances;
E
(viii) Under Section 6 of the MOFA, the builder is entitled to pay
all outgoing charges till the grant of possession. The
members of the appellant received possession in 1997 and
there is no claim for an amount due till 1997;
(ix) Section 12 of the MOFA provides that it is the liability of
F
the flat purchasers to pay municipal taxes and water and
electricity charges;
(x) The respondent is not a service provider of water supply
and has not received any payment for water and property
tax. Thus, the appellant is not a consumer under the
Consumer Protection Act 1986 and the complaint is not G
maintainable; and
(xi) There is no privity of contract between the parties for
payment of extra charges in the absence of an occupancy
certificate.
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386 SUPREME COURT REPORTS [2022] 2 S.C.R.

A C Analysis
10. The crux of the appeal revolves around the maintainability of
the complaint and whether it is barred by limitation. The NCDRC held
that the cause of action arose when the municipal authorities asked the
appellant to pay higher charges in the first instance and thus, a complaint
B should have been filed within two years of the accrual of the cause of
action. The appellant however, has argued that the cause of action is of
a continuing nature, since members of the appellant havecontinued paying
higher charges as the respondent failed to provide the occupancy
certificate.
C 11. Section 24A of the Consumer Protection Act 1986 provides
for the period of limitation period for lodging a complaint. A complaint to
a consumer forum has to be filed within two years of the date on which
the cause of action has arisen. In the instant case, the appellant has
submitted that since the cause of action is founded on a continuing wrong,
the complaint is within limitation.
D
12. Section 22 of the Limitation Act 19635 provides for the
computation of limitation in the case of a continuing breach of contract
or tort. It provides that in case of a continuing breach of contract, a
fresh period of limitation begins to run at every moment of time during
which the breach continues. This Court in Balakrishna Savalram Pujari
E Waghmare v. Shree Dhyaneshwar Maharaj Sansthan6 elaborated
on when a continuous cause of action arises. Speaking for the three-
judge Bench, Justice PB Gajendragadkar (as the learned Chief Justice
then was) observed that
“31. […] Does the conduct of the trustees amount to a continuing
F wrong under Section 23? That is the question which this contention
raises for our decision. In other words, did the cause of action
arise de die in diem as claimed by the appellants? In dealing with
this argument it is necessary to bear in mind that Section 23 refers
not to a continuing right but to a continuing wrong. It is the very
G essence of a continuing wrong that it is an act which creates
a continuing source of injury and renders the doer of the

5
“22. Continuing breaches and torts.—In the case of a continuing breach of contract
or in the case of a continuing tort, a fresh period of limitation begins to run at every
moment of the time during which the breach or the tort, as the case may be, continues.”
6
H AIR 1959 SC 798
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 387
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

act responsible and liable for the continuance of the said A
injury. If the wrongful act causes an injury which is complete,
there is no continuing wrong even though the damage
resulting from the act may continue. If, however, a wrongful
act is of such a character that the injury caused by it itself
continues, then the act constitutes a continuing wrong. In
B
this connection it is necessary to draw a distinction between
the injury caused by the wrongful act and what may be
described as the effect of the said injury. It is only in regard
to acts which can be properly characterised as continuing
wrongs that Section 23 can be invoked.”
(emphasis supplied) C

The Court held that the act of the trustees to deny the rights of
Guravs as hereditary worshippers and dispossessing them through a
decree of the court was not a continuing wrong. Although the continued
dispossession caused damage to the appellants, the injury to their rights
was complete when they were evicted. D

13. In CWT v. Suresh Seth7, a two-judge Bench of this Court
dealt with the question of whether a default in filing a return under the
Wealth Tax Act amounted to a continuing wrong. Justice ES
Venkataramiah (as the learned Chief Justice then was) observed that:
E
“11. […] The distinctive nature of a continuing wrong is
that the law that is violated makes the w rongdoer
continuously liable for penalty. A wrong or default which
is complete but whose effect may continue to be felt even
after its completion is, however, not a continuing wrong
or default. It is reasonable to take the view that the court should F
not be eager to hold that an act or omission is a continuing wrong
or default unless there are words in the statute concerned which
make out that such was the intention of the legislature. In the
instant case whenever the question of levying penalty arises
what has to be first considered is whether the assessee has G
failed without reasonable cause of file the return as required by
law and if it is held that he has failed to do so then penalty has to
be levied in accordance with the measure provided in the Act.
When the default is the filing of delayed return the penalty may
7
(1981) 2 SCC 790 H
388 SUPREME COURT REPORTS [2022] 2 S.C.R.

A be correlated to the time-lag between the last day for filing it
without penalty and the day on which it is filed and the quantum
of tax or wealth involved in the case for purposes of determining
the quantum of penalty but the default however is only one which
takes place on the expiry of the last day for filing the return
without penalty and not a continuing one. The default in question
B
does not, however, give rise to a fresh cause of action every
day. Explaining the expression “a continuing cause of action”
Lord Lindley in Hole v. Chard Union [(1894) 1 Ch D 293 : 63
LJ Ch 469 : 70 LT 52] observed:
“What is a continuing cause of action? Speaking accurately, there
C
is no such thing; but what is called a continuing cause of action is
a cause of action which arises from the repetition of acts or
omissions of the same kind as that for which the action was
brought.”
(emphasis supplied)
D
The Court further provided illustrations of continuous wrongs:
“17. The true principle appears to be that where the wrong
complained of is the omission to perform a positive duty requiring
a person to do a certain act the test to determine whether such a
E wrong is a continuing one is whether the duty in question is one
which requires him to continue to do that act. Breach of a covenant
to keep the premises in good repair, breach of a continuing
guarantee, obstruction to a right of way, obstruction to the right of
a person to the unobstructed flow of water, refusal by a man to
F maintain his wife and children whom he is bound to maintain under
law and the carrying on of mining operations or the running of a
factory without complying with the measures intended for the
safety and well-being of workmen may be illustrations of continuing
breaches or wrongs giving rise to civil or criminal liability, as the
case may be, de die in diem.”
G
14. In M. Siddiq v. Suresh Das8,a Constitution Bench of this
Court (of which one of us (Justice DY Chandrachud) was a part)
examined the precedents with regards to a continuing wrong. The Court
observed that:
8
H (2020) 1 SCC 1
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 389
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

“343. The submission of Nirmohi Akhara is based on the principle A
of continuing wrong as a defence to a plea of limitation. In
assessing the submission, a distinction must be made
between the source of a legal injury and the effect of the
injury. The source of a legal injury is founded in a breach of
an obligation. A continuing wrong arises where there is an
B
obligation imposed by law, agreement or otherwise to
continue to act or to desist from acting in a particular manner.
The breach of such an obligation extends beyond a single
completed act or omission. The breach is of a continuing
nature, giving rise to a legal injury which assumes the
nature of a continuing wrong. For a continuing wrong to C
arise, there must in the first place be a wrong which is
actionable because in the absence of a wrong, there can be
no continuing wrong. It is when there is a wrong that a
further line of enquiry of whether there is a continuing wrong
would arise. Without a wrong there cannot be a continuing wrong.
D
A wrong postulates a breach of an obligation imposed on an
individual, whether positive or negative, to act or desist from acting
in a particular manner. The obligation on one individual finds a
corresponding reflection of a right which inheres in another. A
continuing wrong postulates a breach of a continuing duty or a
breach of an obligation which is of a continuing nature. […] E
Hence, in evaluating whether there is a continuing wrong within
the meaning of Section 23, the mere fact that the effect of the
injury caused has continued, is not sufficient to constitute it as a
continuing wrong. For instance, when the wrong is complete
as a result of the act or omission which is complained of, no F
continuing wrong arises even though the effect or damage
that is sustained may enure in the future. What makes a
wrong, a wrong of a continuing nature is the breach of a
duty which has not ceased but which continues to subsist.
The breach of such a duty creates a continuing wrong and
hence a defence to a plea of limitation.” G

(emphasis supplied)
15. A continuing wrong occurs when a party continuously breaches
an obligation imposed by law or agreement. Section 3 of the MOFA
imposes certain general obligations on a promoter. These obligations H
390 SUPREME COURT REPORTS [2022] 2 S.C.R.

A inter alia include making disclosures on the nature of title to the land,
encumbrances on the land, fixtures, fittings and amenities to be provided,
and to not grant possession of a flat until a completion certificate is given
by the local authority. The responsibility to obtain the occupancy
certificate from the local authority has also been imposed under the
agreement to sell between the members of the appellant and the
B
respondent on the latter.
16. Section 6 of the MOFA make the promoter responsible for
payments of outgoings till the property is transferred. Section 6 reads as
follows:
C “A promoter shall, while he is in possession and where he collects
from persons who have taken over flats or are to take over flats
sums for the payment of outgoings even thereafter, pay all outgoings
(including ground rent, municipal or other local taxes, on income
taxes, water charges, electricity charges, revenue assessment,
interest on any mortgage or other encumbrances, if any), until he
D transfers the property to the persons taking over the flats, or to
the organisation of any such persons,[where any promoter fails
to pay all or any of the outgoings collected by him from the
persons who have taken over flats or are to take over flats,
before transferring the property to the persons taking over
E the flats or to the organisation of any such persons, the
promoter shall continue to be liable, even after the transfer
of the property, to pay such outgoings and penal charges (if
any) to the authority or person to whom they are payable
and to be responsible for any legal proceedings which may
be taken therefor by such authority or persons.]”
F
(emphasis supplied)
17. Sections 3 and 6 of the MOFA indicate that the promoter has
an obligation to provide the occupancy certificate to the flat owners.
Apart from this, the promoter must make payments of outgoings such as
G ground rent, municipal taxes, water charges and electricity charges till
the time the property is transferred to the flat-owners. Where the promoter
fails to pay such charges, the promoter is liable even after the transfer
of property .
18. Based on these provisions, it is evident that there was an
obligation on the respondent to provide the occupancy certificate and
H
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 391
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

pay for the relevant charges till the certificate has been provided. The A
respondent has time and again failed to provide the occupancy certificate
to the appellant society. For this reason, a complaint was instituted in
1998 by the appellant against the respondent. The NCDRC on 20 August
2014 directed the respondent to obtain the certificate within a period of
four months. Further, the NCDRC also imposed a penalty for any the
B
delay in obtaining the occupancy certificate beyond these 4 months.
Since 2014 till date, the respondent has failed to provide the occupancy
certificate. Owing to the failure of the respondent to obtain the certificate,
there has been a direct impact on the members of the appellant in terms
of the payment of higher taxes and water charges to the municipal
authority. This continuous failure to obtain an occupancy certificate is a C
breach of the obligations imposed on the respondent under the MOFA
and amounts to a continuing wrong. The appellants therefore, are entitled
to damages arising out of this continuing wrong and their complaint is
not barred by limitation.
19. The NCDRC in its impugned order has held that the cause D
of action arose when the municipal authorities ordered the payment of
higher taxes in the first instance. Further, the impugned order also
states that the present complaint is barred by limitation as there is no
prayer for supply of occupancy certificate. We are unable to subscribe
to the view of the NCDRC on both counts. Undoubtedly, the continuing E
wrong in the present case is the failure to obtain the occupancy
certificate. Against this act of the respondent, the appellant society
has taken appropriate action by filing a complaint before the consumer
forum. The appellant is currently pursuing the execution of the order
of the SCDRC arising from that complaint. However, that itself does
not preclude it from claiming compensation for the consequences which F
have arisen out of this continuing wrong. The failure to obtain the
occupancy certificate has resulted in the levy of higher taxes on the
members of the appellant society repeatedly by the municipal
authorities. Despite the order of 20 August 2014, the respondent has
failed to obtain the occupancy certificate. This has resulted in a situation G
where the appellant, despite having followed the correct course of
litigation in demanding the furnishing of an occupancy certificate, will
continue to suffer the injury inflicted by the respondent merely due to
the delay in the execution of the order against the respondent. Rejecting
the complaint as being barred by limitation, when the demand for higher
H
392 SUPREME COURT REPORTS [2022] 2 S.C.R.

A taxes is made repeatedly due to the lack of an occupancy certificate,
is a narrow view which is not consonance with the welfare objective
of the Consumer Protection Act 1986.
20. We shall now briefly advert to the finding of the NCDRC on
the merits of the dispute. The NCDRC has held that the appellant is not
B a ‘consumer’ under the provisions of the Consumer Protection Act as
they have claimed the recovery of higher charges paid to the municipal
authorities from the respondent. Extending this further, the NCDRC has
observed that the respondent is not the service provider for water or
electricity and thus, the complaint is not maintainable.
C 21. Section 2(1)(d) of the Consumer Protection Act defines a
‘consumer’ as a person that avails of any service for a consideration. A
‘deficiency’ is defined under Section 2(1)(g) as the shortcoming or
inadequacy in the quality of service that is required to be maintained by
law. In its decisions in Wing Commander Arifur Rahman Khan &
Others v. DLF Southern Homes Private Limited & Others9 and
D Pioneer Urban Land Infrastructure Limited v. Govindan
Raghavan10, this Court has held that the failure to obtain an occupancy
certificate or abide by contractual obligations amounts to a deficiency in
service. In Treaty Construction v. Ruby Tower Cooperative
Housing Society Ltd.11, the Court also considered the question of
E awarding compensation for not obtaining the certificate. In that case,
the Court declined to award damages as there was no cogent basis for
holding the appellant liable for compensation, and assessing the quantum
of compensation or assessing the loss to the members of the respondent
society.

F 22. In the present case, the respondent was responsible for
transferring the title to the flats to the society along with the occupancy
certificate. The failure of the respondent to obtain the occupation
certificate is a deficiency in service for which the respondent is liable.
Thus, the members of the appellant society are well within their rights as
‘consumers’ to pray for compensation as a recompense for the
G consequent liability (such as payment of higher taxes and water charges
by the owners) arising from the lack of an occupancy certificate.

9
(2020) 16 SCC 512
10
(2019) 5 SCC 725
11
H (2019) 8 SCC 157
SAMRUDDHI CHS LTD. v. MUMBAI MAHALAXMI CONSTRUCTION 393
PVT. LTD. [DR. DHANANJAYA Y CHANDRACHUD, J.]

D Conclusion A
23. For the above reasons, we allow the appeal against the order
of the NCDRC dated 3 December 2018 and hold that the complaint is
maintainable. We direct the NCDRC to decide the merits of the dispute
having regard to the observations contained in the present judgment and
dispose the complaint within a period of three months from the date of B
this judgment.
24. Pending applications, if any, shall stand dismissed.

Bibhuti Bhushan Bose Appeal allowed.
C

D

E

F

G

H