Case BriefsTribunals/Commissions/Regulatory Bodies

Maharashtra Real Estate Regulatory Authority, Mumbai (MahaRERA): While focusing on the definition of carpet area in Pre-RERA and Post-RERA, Coram of Ajoy Mehta (Chairperson MahaRERA) observed that,

“If the promoter is duty-bound to honour the agreement for sale in its true letter and spirit so also the allottee is duty-bound to adhere to the terms of the agreement for sale and either party cannot shun their duties and responsibilities under the agreement for sale.”

In the present matter, respondents had registered their project “EMERALD ISLE-T8” under Section 5 of the Real Estate (Regulation and Development) Act, 2016.

Complainants seeks the following reliefs:

“Refund is demanded for the excess funds collected by LAT Realty for carpet area of 57.60 square feet at the rate of Rs 28,L3L.67 amounting to Rs 1-6,20,384 plus interest at RERA applicable rate from the date of first payment.”

Issue for consideration:

  • Whether the complaint is barred by the principle of res judicata?
  • Whether the Complainants are entitled to claim refund for difference/variation in area of the said apartment and interest thereon from date of payment of the excess amount?

Respondent had raised the issue of the principle of res judicata stating that a matter that was finally decided on merits cannot be litigated again between the same parties.

However, from the submissions of the Respondent herein it is clear that the earlier complaint No. CC00600000000000414 was filed for the purpose of seeking interest for delayed possession and the Complainants in the present complaint is seeking a refund of the difference in the carpet area of the said apartment with interest as applicable thereon.

Further, it was noted that the complainants had signed a letter whereby they confirmed and agreed to their absolute satisfaction and assured the respondent that they shall not be claiming anything further through any forum/Court.

Hence, the above-stated letter certainly binds the complainants from raising any further issues with regard to the said apartment and MahaRERA expresses displeasure with regard to the complainants turning away from their own words and commitments.

Adding to the above, Authority stated that the instant complaint was filed with a different issue and hence the principle of res judicata was not applicable and thus issue 1 was answered in negative.

Definition of carpet area under Section 2(k) of the said Act. It reads thus:

“carpet area” means net usable floor area of an apartment, excluding the area covered by the external walls, area under services, shafts, exclusive balcony or verandah area and exclusive open terrace area, but including the area covered by the internal partition walls of the Apartment.”

 Under MOFA, Section 3(m), Promoter was to disclose one of the particulars in the advertisement for sale of flats and clause (i) states the particulars to the extent of carpet area of the flat including the areas of balconies whereas under RERA, balconies have been excluded in the definition of carpet area.

Coram stated that it was clear from the facts of the complaint that on the date of booking of the said apartment MOFA was in effect and on the date of the said agreement RERA was holding the ground.

A very pertinent observation was made, that the carpet area was defined differently in both the Acts.

Hence, there was no actual change but simply a variation/difference in the methodology of calculation of carpet area as per MOFA and RERA from time to time.

Since the allotment letter was dated 1-10-2015 which was Pre-RERA i.e. MOFA was applicable for calculating carpet area and after May 2017 RERA was applicable after which the said agreement was executed i.e. 20-12-2017

Therefore, no ambiguity on the issue of carpet area was found resulting in no refund and interest.

Coram while concluding added that the discrepancy/variation/difference in terms of the carpet area of the said apartment was as per the said agreement which provided that a variation of up to 3% on account of any design change and construction exigencies which the complainant was aware of and the same had been agreed upon by them. Thus, raising an issue at a later point was not acceptable nor could be changed as the agreement was binding upon both parties.

In the present matter, complainants chose to raise an unreasonable dispute in a very irresponsible manner, leading to wasting the time of the Authority.

Cost of Rs 20,000 was imposed on the complainant and the complaint was dismissed in view of the above.[Deepak Pande v. Larsen & Toubro Ltd., Complaint No. CC006000000100256, decided on 17-08-2021]


Advocate before the Authority:

Advocate Subhashree Chatterjee for the Respondent

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Dinesh Singh (Presiding Member), dismissed a revision petition filed by Haryana Urban Development Authority.

The District Forum had directed the Haryana Urban Development Authority (HUDA) to allot an alternative plot to the Complainant and awarded interest on the entire amount deposited with HUDA.

It was stated that the area in which the originally allotted plot was located was not developed by the HUDA. Consequently, possession of the said plot could not, and was not, offered by the HUDA. An alternative plot was offered in lieu thereof.

In the given facts and circumstances, deficiency in service was determined by the District Forum, and it inter alia awarded compensation by way of interest at the rate of 10% per annum on the total amount deposited with the HUDA from the date of deposit till the date of payment. It did not distinguish between the amount deposited by the original allottee and the amount deposited by the subsequent purchaser/allottee, the Complainant.

The question for consideration in the instant case was that the District Forum, in its wisdom, evidently finding it just and equitable, had adopted the yardstick of determining compensation for the Complainant by computing interest at the rate of 10% per annum on the total amount deposited for the plot in question.

Bench stated that the District Forum (rightly) did not get into the arena of distinguishing between the rights of an original allottee and of a subsequent purchaser/allottee, the question not being germane to the matter at hand i.e. of determining the quantum of (just and equitable) compensation to the Complainant.

What should have been a non-issue has been unnecessarily agitated by the HUDA before this Commission for about 10 years. 

Commission stated that HUDA unnecessarily has been agitating the interest on an amount of Rs 62,773 deposited by the original allottee, unnecessarily entering into the arena of the respective rights of an original allottee and a subsequent purchaser/allottee, without understanding that the question here was not to distinguish between such respective rights but to adopt a yardstick for calculation of just and equitable compensation for the Complainant.

The Complaint was filed in 1997. The District Forum made its order on the contest in 2003. The Appeal was filed in 2003. The State Commission dismissed it (inter alia) on limitation in 2010. The instant Petition was filed in 2011. We are now in 2021. 

Further, the Bench expressed that the Act 1986 is “for better protection of the interests of consumers”, its Statement of Objects and Reasons speaks of “speedy and simple redressal to consumer disputes”.

Concluding the decision, Commission held:

“it is just, and conscionable to dismiss this Petition with the cost of Rs 10,000, to be deposited in the Consumer Legal Aid Account of the District Forum within four weeks from today. It will be open to the Chief Executive of the Petitioner, the HUDA, to recover the said cost from its officers responsible for the unnecessary litigation before this Commission. The Petitioner, the HUDA, through its Chief Executive, is directed to make good the award in its entirety within four weeks from today, failing which the District Forum shall undertake execution, for ‘Enforcement’ and for ‘Penalty’, as per the law.”[HUDA v. Nirmal Madan, Revision Petition No. 269 of 2011, decided on 03-02-2021]

Chhattisgarh High Court
Case BriefsHigh Courts

Chhattisgarh High Court: Sanjay K Agrawal J.,  dismissed the second appeal being devoid of merits.

The facts of the case are such that the first appellate court held that the suit land was ‘Chhote Jhad Ka Jungle’/forest land which has been given in patta to the plaintiff, which was revoked by the Collector in Revision. Being aggrieved present second appeal was filed.

Counsel for the appellant submitted that the first appellate Court was absolutely wrong in reversing the judgment and decree passed by the trial Court.

Section 2 (iii) of the Act, 1980 reads as under:-

2. Restriction on the dereservation of forests or use of forest land for non-forest purpose.-Notwithstanding anything contained in any other law for the time being in force in a State, no State Government or other authority shall make, except with the prior approval of the Central Government, any order directing.-

(i) xxx xxx xxx

(ii) xxx xxx xxx

(iii) that any forest land or any portion thereof may be assigned by way of lease or otherwise to any private person or to any authority, corporation, agency or any other organization not owned, managed or controlled by Government.

(iv) xxx xxx xxx…”

The Court relied on judgment T.N. Godavarman Thirumulkpad v. Union of India, (1997) 2 SCC 267 and B.S. Sandhu v. Government of India, (2014) 12 SCC 172 and observed that keeping in view the provisions contained in Section 2 of the Act of 1980, and that the land is forest land and that the suit land is forest land “Chhote Jhad Ka Jungle” within the meaning of Section 2(iii) of the Act of 1980, this Court is of the considered opinion that no allotment/lease could have been made by the State Government without obtaining prior permission from the Central Government to the plaintiff. Since the land is ‘Chhote Jhad Ka Jungle’ and it was leased out without prior approval of the Central Government under Section 2(iii) of the Act of 1980.

The Court thus held

“in the light of the above legal position, it is quite vivid that the land in question i.e. Chhote Jhad Ka Jungle was allotted to the plaintiff by the Naib Tahsildar which was revoked by Collector on 23.12.2002 in revision. In the suit filed for declaration of permanent injunction even the order dated 23.12.2002 passed by the revisional authority was not challenged. In that view of the matter, the first appellate Court has rightly held that Chhote Jhad Ka Jungle’ /suit land could not have been allotted to the plaintiff and it has been rightly cancelled by the Collector in revision which has not been called in question.”

In view of the above, the appeal was dismissed.[Budheshwar Singh v. Krishna Pratap Singh, 2021 SCC OnLine Chh 188, decided on 29-01-2021]


Arunima Bose, Editorial Assistant has put this story together

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) addressed an issue wherein an allottee after the purchase of the Shed could not get electricity connected due to pending dues of the previous allottee.

The instant revision was filed against the Order passed by the State Consumer Disputes Redressal Commission, Gujarat.

Complainant had applied for allotment of shed pursuant to the advertisement of OP 1. The Complainant paid an amount of Rs 1,76,000 towards the allotment of the shed as initial payment and was informed that he would get electricity connection from the Gujarat Electricity Board in due course.

Further, OP-3 informed the complainant that the previous allottee of the shed was due Rs 1,26,479 to the Gujarat Electricity Board towards electricity charges. The Complainant intimated OP-2 that dues were also pending towards municipal tax of Surat Municipal Corporation. OP 1 requested the Complainant to clear both the outstanding dues and issue clear title of the Shed.

On no action being taken by the OP 1 and 2, Complainant filed a complaint before the District Forum.

Following was the District Forum’s Order:

OP No.1 and OP No.2 herein jointly and /or severally should pay to the complainant in the present case, with reference to the industrial shed in question the amount of Rs.1,76,000/-(Rupees one lakh seventy-six thousand only) paid to the opponent along with simple interest at the rate of 9% per annum on the said amount from the date of complaint till its realization.

State Commission set aside the District Forum’s Order stating that it did not discuss the agreement for sale.

Analysis and Decision

Commission on going through the allotment letter and the agreement found that there was no express provision which mentioned that the purchaser of the premises had to pay the electricity dues of the previous allottee.

Therefore in the absence of there being any specific statutory provision or clause in the Sale Agreement, the allottee could not have been compelled to clear the dues of the previous allottee.

Hence, dues relating to electricity charges cannot be enforced against the next allottee.

Commission cited the Supreme Court decision in Haryana State Electricity Board v. Hamuman Rice Mills Dhanauri, Civil Appeal No. 6817 of 2010, decided on 20-08-2010, held that “electricity arrears do not constitute a charge over the property. Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner/ occupier. Where the statutory rules or terms and conditions of supply which are statutory in character, authorize the supplier of electricity, to demand from the purchaser of a property claiming re-connection or fresh connection of electricity, the arrears due by the previous owner/occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchaser.”

In view of the above discussion, State Commission’s Order was set aside and District Forum’s decision was upheld. [Madhuben Rameshchandra Shah v. Gujarat Industrial Development Corpn., 2021 SCC OnLine NCDRC 17, decided on 28-01-2021]


Advocates for the parties:

Petitioner: Varshal Pancholi, Advocate

Respondents: R1 and R1: Chirag M. Shroff, Advocate

Respondent 3: Jesal Wahi, Advocate

Respondent 4: Ex-parte

Case BriefsSupreme Court

Supreme Court: The 3-Judge Bench of Dr Dhananjaya Y Chandrachud, Indu Malhotra and Indira Banerjee, JJ., observed that

“Developer cannot compel the apartment buyers to be bound by the one-sided contractual terms contained in the Apartment Buyer‘s Agreement.”

Judgment passed by the National Consumer Disputes Redressal Commission is in Challenge

Appellant-Developer challenged the decision of NCDRC wherein refund of the amounts deposited by the Apartment Buyers was directed on account of inordinate delay in completing the construction and obtaining the Occupation Certificate.

Issues for Consideration:

  • Determination of the date from which the 42 months period for handing over possession is to be calculated under Clause 13.3, whether it would be from the date of issuance of the Fire NOC as contended by the Developer; or, from the date of sanction of the Building Plans, as contended by the Apartment Buyers;
  • Whether the terms of the Apartment Buyer‘s Agreement were one-sided, and the Apartment Buyers would not be bound by the same;
  • Whether the provisions of the Real Estate (Regulation and Development) Act, 2016 must be given primacy over the Consumer Protection Act, 1986;
  • Whether on account of the inordinate delay in handing over possession, the Apartment Buyers were entitled to terminate the agreement, and claim a refund of the amounts deposited with interest.

Analysis

Bench made a pointwise analysis of the instant matter wherein in the first issue, the point of controversy was whether the 42 months’ period is to be calculated from the date when the Fire NOC was granted by the authority concerned as contended by the Developer; or, the date on which the Building Plans were approved as contended by the Apartment Buyers.

In accordance with Section 15 of the Haryana Fire Safety Act, 2009, it is mandatory for a Builder/Developer to obtain the approval of the Fire Fighting Scheme conforming to the National Building Code of India, and obtain a ‘No objection Certificate’ before the commencement of construction.

Clause 13.3 of the Apartment Buyer’s Agreement provides that the 42 months’ period has to be calculated from the date of approval of Building Plans and/or fulfilment of the pre-conditions imposed thereunder.

Bench opined that it was a mandatory requirement under the Haryana Fire Safety Act, 2009 to obtain the Fire NOC before the commencement of construction activity. The said requirement was stipulated in the sanctioned Building Plans, as also in the Environment Clearance.

 The 42 months‘ period in Clause 13.3. of the Agreement for handing over possession of the apartments would be required to be computed from the date on which Fire NOC was issued, and not from the date of the Building Plans being sanctioned.

In the instant matter, there was a delay of approximately 7 months in obtaining the fire NOC by Developer.

Whether the terms of the Apartment Buyer’s Agreement are one-sided?

Court observed on perusal of the clauses mentioned in the Agreement that the said clauses were wholly one-sided terms of the Agreement Buyer’s Agreement, which were entirely loaded in favour of the Developer and against the allottee at every step.

For the said issue, Court held that the terms of the Apartment Buyer‘s Agreement are oppressive and wholly one-sided, and would constitute an unfair trade practice under the Consumer Protection Act, 1986.

Incorporation of one-sided and unreasonable clauses in the Apartment Buyer’s Agreement constitutes an unfair trade practice under Section 2(1)(r) of the Consumer Protection Act.

Whether primacy to be given to RERA over the Consumer Protection Act?

Bench expressed that this Court has upheld the applicability of provisions of Consumer Protection Act as an additional remedy, despite the existence of remedies under special statutes, including the Arbitration and Conciliation Act, 1996.

In the decision of  Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751, it was held that the remedy under the Consumer Protection Act, 1986 is confined to the Complaint filed by a Consumer as defined by the Act, for defects and deficiency caused by the service provider.

In a recent decision of this Court in Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783, it was held that remedies under the Consumer Protection Act were in addition to the remedies available under special statutes. The absence of a bar under Section 79 of the RERA Act to the initiation of proceedings before a fora which is not a civil court, read with Section 88 of the RERA Act makes the position clear. Section 18 of the RERA Act specifies that the remedies are “without prejudice to any other remedy available”.

Whether the Apartment Buyers are entitled to terminate the Agreement or refund of the amount deposited with Delay Compensation?

Answering this issue, the Court categorised the buyer/allottees into two categories:

  • Apartment Buyers whose allotments fall in Phase 1 of the project comprised in Towers A6 to A10, B1 to B4, and C3 to C7, where the Developer has been granted occupation certificate, and offer of possession has been made
  • Apartment Buyers whose allotments fall in Phase 2 of the project, where the allotments are in Towers A1 to A5, B5 to B8, C8 to C11, where the Occupation Certificate has not been granted so far.

For category 1, it was held that such allottees (barring an exception) were obligated to take possession of the apartments, since the construction was completed, and possession offered on 28-06-2019, after the issuance of Occupation Certificate on 31-05-2019. The Developer is however obligated to pay Delay Compensation for the period of delay which has occurred from  27-11-2018 till the date of the offer of possession was made to the allottees.

So far category 2 is concerned, it was held that such allottees are entitled to refund of entire amount deposited by them, along with compensation and interest.

In view of the above discussion, civil appeals were disposed of. [Ireo Grace Realtech (P) Ltd. v. Abhishek Khanna, 2021 SCC OnLine SC 14, decided on 11-01-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): The Bench of Justice Venugopal M. (Judicial Member) and V.P. Singh (Technical Member) and Shreesha Merla (Technical Member), while addressing the present Company Appeal observed that:

No penalty can be saddled either under Section 65(1) or (2) of the Code without recording an opinion that a prima facie case is established to suggest that a person ‘fraudulently’ or with malicious intent for the purpose other than the resolution of Insolvency or Liquidation or with an intent to defraud any person has filed the Application.

The instant appeal emanates from the Order passed by National Company Law Tribunal Delhi whereby application under Section 7 of the Insolvency and Bankruptcy Code 2016 was admitted.

Factual Matrix

Corporate Debtor is a builder of High-End Project wherein a flat was booked for a total sale consideration of Rs 3,80,10,000. 

Respondents were the second purchasers of the above-stated flat booked vide Agreement Buyer Agreement. As per Agreement, the completion period was 36 months plus six months as a grace period, i.e. February 2015.

Appellant contended that after adjusting the payments made by the Original buyer, the respondent paid a total sum of Rs 2,75,55,186 as against the total cost of the flat as Rs 3,80,10,000. The last payment was made by the respondents on 26-08-2013, and after that, despite several reminders, no payment was made.

Respondents opted for a Construction linked plan but failed to pay the instalments on time.

Appellants submitted that the respondents are defaulters. Therefore, Corporate Debtor was constrained to cancel their allotment.

Respondents initiated the proceedings under Section 7 of the Insolvency and Bankruptcy Code against the appellant.

Appellant pleaded that the proceedings initiated by respondents 1 and 2 are against the provisions of the Code and have been done so, to pressurise the Corporate Debtor.

Further, respondent 1/Homebuyer submitted that as per the Agreement, possession was to be handed over within 36 months from the date of commencement of the construction or execution of the Agreement, whichever is later.

Despite the assurances, the Appellant failed to deliver the possession of the said unit to the Respondents. Therefore, the Respondents/Financial Creditor had filed the Application under Section 7 of the Code.

NCLT observed that the Corporate Debtor did not hand over the possession of the flat to the Financial Creditor as the construction work could not be completed within the stipulated time and there was no proof of extension of time by the Authority concerned. A debt of more than Rs 1 lakh was due and payable, which the Corporate Debtor failed to pay.

In view of the above circumstances, application wad admitted by NCLT and the same has been challenged in the instant appeal.

Issues for Consideration:

  1. Whether the Corporate Debtor has committed default in not completing the Construction of the flat in time and handing over possession of the same in terms of Agreement?
  2. Whether Financial Creditor/Home Buyer committed default in making payment of the instalments as per ‘ABA’ under construction link Plan?
  3. Whether the Application under Section 7 of the Code is filed fraudulently with malicious intent for the purposes other than for the Resolution of Insolvency or liquidation, as defined under Section 65 of the I&B Code, 2016?
  4. Whether the application is barred by limitation?

Analysis and Decision

On considering the above-stated issues, Bench observed that the Corporate had committed default in completing the construction work of the flat n time and failed to deliver the possession on the stipulated date as per the Agreement.

In a reply to a notice, Corporate Debtor himself admitted that unlike other builders who have abandoned the project and stopped the work, it is completing the Project which is at the final stage where flooring and finishing work is underway.

It was observed from the Agreement that under the Construction linked payment plan, it is mandatory to issue demand notice for instalments in the commencement of respective stages of Construction by speed post or courier.

In the instant case, there was no evidence to show that the demand notice at the respective stages of Construction was ever sent to the Allottee. Whereas, Clause 2.18 of the Agreement makes it mandatory to send the Notice to the Allottee under Construction linked plan. No compliance of conditions of Clause 2.17 and 2.18 were made in the instant case.

Hence, in the present case, it is difficult to ascertain as to when Instalment became due, at the start of the respective stage of the Construction.

Bench observed that:

Mandatory condition of issuing Notice through speed post or courier to the Allottee, at every stage of Construction as per Agreement has not been followed.

Hence, it cannot be concluded that the allotted committed any default in paying the instalment when due and the fact that the flat was to be delivered latest by 2nd week of February 2016, but construction work was still going on in the year 2018 also cannot be denied.

Justification for Invoking Section 65 of the Code

In accordance with the Supreme Court decision in Pioneer’ Urban Land Infrastructure v. Union of India, (2019) 8 S SCC 416, Corporate Debtor has the responsibility to furnish the details of default. It was held that:

“Under Section 65 of the Code, the real estate developer can also point out that the insolvency resolution process under the Code has been invoked fraudulently, with malicious intent, or for any purpose other than the resolution of Insolvency. The Allottee does not, in fact, want to go ahead with its obligation to take possession of the flat/Apartment under RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it. The Allottee does not, in fact, want to go ahead with its obligation to take possession of the flat/Apartment under RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it.”

Bench stressed upon the point that Section 65 of the Code is not meant to negate the process under Section 7 or 9 of the Code. Penal action under Section 65 can be taken only when the provision of the Code has been invoked fraudulently, with malicious intent.

In the Supreme Court decision of Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17, it was held that:

“…in order to protect the corporate debtor from being dragged into the corporate insolvency resolution process mala fide, the Code prescribes penalties.”

Hence, from the above discussion, it is clear that

the Code provides stringent action under Section 65 against the person who initiates proceedings under the Code fraudulently or with malicious intent, for the purpose other than the resolution of Insolvency or liquidation under the Code.

Requirement for levying penalty under Section 65 IBC is that a ‘prima facie’ opinion is required to be arrived at that a person has filed the petition for initiation of proceedings fraudulently or with malicious intent.

While parting with the decision, Tribunal held that the Real Estate Developer failed to prove that Allottee is a speculative Investor and is not genuinely interested in purchasing the flat and initiated proceeding under the Code to pressurise the Corporate Debtor.

Thus, Tribunal found no justification to invoke Section 65 of the I&B Code against the Allottee.

Decision

NCLT’s order requires no interference. [Amit Katyal v. Meera Ahuja, 2020 SCC OnLine NCLAT 748, decided on 09-11-2020]

Case BriefsSupreme Court

Supreme Court: The bench of UU Lalit and Vineet Saran, JJ has held that the Real Estate (Regulation and Development) Act, 2016 (RERA Act) does not bar the initiation of proceedings by allottees against the builders under the Consumer Protection Act, 1986.

“It is true that some special authorities are created under the RERA Act for the regulation and promotion of the real estate sector and the issues concerning a registered project are specifically entrusted to functionaries under the RERA Act. But for the present purposes, we must go by the purport of Section 18 of the RERA Act. Since it gives a right “without prejudice to any other remedy available’, in effect, such other remedy is acknowledged and saved subject always to the applicability of Section 79.”


Background of the Case


The said decision of the Court came in the matter relating of delay in handing over the possession of flats to buyers by the developer. The apartments were booked by the Complainants in 2011-2012 and the Builder Buyer Agreements were entered into in November, 2013. As promised, the construction should have been completed in 42 months. The period had expired well before the Project was registered under the provisions of the RERA Act. Even after four years there were no signs of the Project getting completed and hence, a complaint was filed by the Buyers.


RERA Act vis-à-vis CP Act: Statutory Analysis


The Court discussed the following provisions for the purpose of deciding the case at hand:

  • Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine.
  • Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law.
  • Section 89 provides that the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force.

The Court noticed that an allottee placed in circumstances similar to that of the Complainants, could have initiated following proceedings before the RERA Act came into force.

A) If he satisfied the requirements of being a “consumer” under the CP Act, he could have initiated proceedings under the CP Act in addition to normal civil remedies.

B) However, if he did not fulfil the requirements of being a “consumer”, he could initiate and avail only normal civil remedies.

C) If the agreement with the developer or the builder provided for arbitration:-

i) in cases covered under Clause ‘B’ hereinabove, he could initiate or could be called upon to invoke the remedies in arbitration.

ii) in cases covered under Clause ‘A’ hereinabove, in accordance with law laid down in Emaar MGF Ltd v. Aftab Singh, (2019) 12 SCC 751, he could still choose to proceed under the CP Act.

The Court noticed that on plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated hereinabove, would stand barred from invoking the jurisdiction of a Civil Court.

“The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear.”

To answer the question whether the Commission or Forum under the CP Act is a civil court or not, the Court referred to the decision in Malay Kumar Ganguli v. Dr. Sukumar Mukherjee, (2009) 9 SCC 221 , where it was held,

“The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court.”

Hence, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint.

The Court further discussed the proviso to Section 71(1) of the RERA Act which entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file an appropriate application before the adjudicating officer under the RERA Act. It noticed,

“The proviso thus gives a right or an option to the concerned complainant but does not statutorily force him to withdraw such complaint nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act. As against that the mandate in Section 12(4) of the CP Act to the contrary is quite significant.”

It was held that insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. Further, Section 18 itself specifies that the remedy under said Section is “without prejudice to any other remedy available”.

“Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERA Act.”

[Imperia Structures v. Anil Patni,  2020 SCC OnLine SC 894, decided on 02.11.2020]

Jharkhand High Court
Case BriefsHigh Courts

Jharkhand High Court: Sujit Narayan Prasad, J. dismissed a writ petition under Article 226 of the Constitution of India whereby the petitioner sought for a direction upon the respondents to allot a shop situated at the Municipal Library in the name of the petitioner on the ground that he has been running the aforesaid shop since long. 

The petitioner was not the allottee of the shop, rather, the shop was sublet in his favour by the original allottee. As the period of lease of the original allottee had expired, the petitioner handed over the keys of the shop with an application for consideration for allotment of the shop in his favour, but the shop was allotted to someone else. The petitioner argued that he was not allotted the shop as he was not deemed fit or proper since he was a handicapped person. The petitioner further submitted that he has been running the shop for long, and therefore priority ought to have been given by the respondents in allotment of the said shop. Counsel for the State submitted that the petitioner had no right to claim the allotment of the said shop since the said shop was never allotted in his favour, rather, he was tenant of the original allottee and after expiry of the lease in favour of the original allottee, the petitioner had no right to remain in the said premises. Furthermore, the order of allotment made in favour of the other person was never assailed.

The Court heard both the parties and decided that the shop in question was never allotted in the favour of the petitioner, rather, he was claiming allotment of the said shop by virtue of the fact that he was in occupation by way of the tenant by the original allottee. The allotment of the shop by virtue of the expiry of the lease expired and therefore, the petitioner had no right to remain in possession of the said shop.  The petitioner had simply prayed in this writ petition for allotment of the said shop on the ground that he was handicapped and was running a shop in the said premises since long, but merely because the petitioner is handicapped, no sympathy could be shown by the Court ignoring the process of allotment of the shop. Also, the order of allotment was also never under challenge. The writ petition was dismissed. [Amarendra Kumar v. State of Jharkhand, 2019 SCC OnLine Jhar 1451, decided on 18-10-2019]