Is OC required for flat registration? Who should pay for OC, builder or owner?

Hello Sir, Madam, I just want you clarify certain things based on our experience in the new apartment. Builder is asking bribe of RS.40000 for OC and Khata(A) transfer, we all(80 resident) made our flat registration (Shivaji nagar sub-registrar office, that time also they took bribe of Rs. 14K - 18K from resident) prior to this as recommended by builder and availed Loan from National bank like SBI. Builder also gave us possession letter(on his company letter head paper), 2 copies, one for us and another for himself. After that we moved to this apartment , now when we asked for OC, Kahata and meter trasfer, he is threatening people as without OC it is illegal to stay in apartment and if he shell out 2Lacs from his account he can do any thing, can make 10yrs stay on this completed building which will be problem for all 80 residents. He is also justifying this money is need by BBMP Authorities, not sure if this is valid. Most of the people are scared now and not raising out the voice. Currently some work is still not happened like swimming pool, painting etc.. We have all papers like sales deed, registration, possession letter, building layout plan & Khata A on name of builder currently, land ownership and all loan papers, also complete bundle of other papers related to this project. Based on this situation, 1. Is it legal to have flat registration without OC? 2. Can one move to new apartment on basis of the possession letter? 3. On what bases we can negotiate with builder? Thanks.