Offer of Possession Without Occupation Certificate Is Invalid; Forfeiture of Booking Amount Not Permissible.

The Respondent booked a flat in the Petitioner’s project in 2011.

Although the Petitioner offered possession in 2017, it admittedly lacked a valid Occupation Certificate (OC) at that time.

Consequently, the Respondent sought a refund, but the Petitioner forfeited ₹3,83,406/-, consisting of cancellation charges (₹2,06,220/-) and service tax (₹1,77,186/-).

The State Commission found a deficiency in service and ordered a full refund.

The National Consumer Disputes Redressal Commission (NCDRC) affirmed this, holding that the Petitioner could not forfeit funds as the offer of possession was invalid without an OC.

The Petitioner challenged these concurrent findings before the High Court under Article 227 of the Constitution.

Article 227 of the Constitution, emphasizing that supervisory jurisdiction is not appellate and must be exercised "most sparingly" only to correct patent perversity or jurisdictional errors, as established in Waryam Singh v. Amarnath.

Doctrine from Shalini Shyam Shetty v. Rajendra Shankar Patil on the scope of Article 227.

Lucknow Development Authority v. M.K. Gupta, which categorizes housing delays as a deficiency in service.

Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghavan, which establishes that an offer of possession without a valid OC is not a valid offer in law.

The Court observed that its role under Article 227 is limited to ensuring subordinate tribunals remain "within the bounds of their authority" and not to correct mere errors of law or fact.

In the present case, the Petitioner admitted that no valid OC existed at the time of the possession offer in 2017.

Applying the precedent from Pioneer Urban Land, the Court reasoned that since the Petitioner failed to fulfill its fundamental contractual obligation (delivering possession with a valid OC), it was legally precluded from invoking forfeiture or cancellation clauses against the allottee.

The Court found no "patent perversity" or "grave dereliction of duty" in the lower commissions' findings, as the delay and lack of OC were undisputed material facts.

Furthermore, the Court rejected the Petitioner's procedural grievance regarding the striking off of its Written Statement, noting that the issue had already been litigated and rejected across multiple forums.

The Court held that a housing organization cannot forfeit any amount when it has failed to provide a valid offer of possession supported by an OC.

The orders of the State and National Commissions directing the refund of the deducted amounts were upheld.