1. Heard Sri. Anshul Kumar Singhal, learned counsel for the petitioner, learned Standing Counsel for the State respondents and Sri. Anil Tiwari, Senior Advocate, assisted by Sir Waseem Masood Khan, learned counsel for the respondent no. 2.
2. Present petition has been filed assailing the order dated 12.09.2019 passed in complaint no. 10201822383 (Vipin Kumar Baliyan v. Habitech Infrastructure Ltd.) by the U.P. Real Estate Regulatory Authority under Section 18 of the Real Estate (Regulation & Development) Act, 2016 (for short ‘the Act of 2016’), as well as recovery certificate and citation dated 07.02.2020 issued by the respondent no. 2.
3. Briefly stated, facts as disclosed in the writ petition are that petitioner is a promoter of a project named “Habitech Panchtatva’ which is a group housing scheme situated at plot No. GH-8-A, Tech Zone-IV, Greater Noida (West), U.P. It is also stated that the aforesaid project is registered with the Real Estate Regulatory Authority (for short “RERA”). It appears that respondent no. 3 booked a flat in the said project on 16.10.2012 for a total sale consideration of Rs. 28,16,655/- including taxes and other charges. Allotment letter was issued on 01.02.2013 and a Builder Buyer Agreement was subsequently executed between the parties. It appears that as the project was not completed in time. Therefore, the respondent no. 3 approached the RERA on 11.09.2018 and a complaint was registered by the said authority, pursuant to which notices were issued to the petitioner. On 12.09.2019 the respondent authority directed the petitioner to refund the entire amount alongwith interest @ MCLR + 1% from the date of deposit till the date of order. Thereafter, recovery certificate and citation was issued on 07.02.2020.
4. Learned counsel for the petitioner contended that the order dated 12.09.2019 has been passed against the provisions of Act of 2016, as the aforesaid Act was notified by Central Government on 26.04.2016 and the entire Act came into force on 01.05.2017. The State of U.P. exercising power under Section 20 designated the Regulatory Authority from 01.05.2017. It was contended that the Act is prospective in nature and the authority could not have directed for payment of interest from the date of deposit and could have only granted interest since the enforcement of the Act.
5. The second limb of argument of Sri. Singhal is that Regulatory Authority was to appoint an Adjudicating Officer in consultation with the State Government, as Section 71 (1) provides that such Adjudicating Officer shall deal with the matters falling under Sections 12, 14, 18 and 19 of the Act of 2016. He laid emphasis on the fact that complaint moved under Section 18 and the amount of compensation, so awarded, against the promoter cannot be adjudicated by the Regulatory Authority and the matter was to be dealt by the Adjudicating Officer under Section 71 of the Act of 2016. He also submitted that Section 34 of the Act provides for functions of the authority which does not envisage power of adjudication.
6. Lastly, reliance has been placed upon the order of Apex Court passed in Special Leave to Appeal (Civil) No. 20585 of 2019 which was filed against the decision of this Court rendered in Writ-C No. 18812 of 2019 (M.R. Mittals Infratech Pvt. Ltd. v. State of U.P.) wherein a challenge was made to a notice issued by the Regulatory Authority for payment of interest and this Court had dismissed the said petition.
7. On the other hand, Sri. Anil Tiwari, learned Senior Advocate, appearing for the respondent no. 2, vehemently denied the submission, so made by the counsel for petitioner, and submitted that Section 71 has no application on the facts of the present case, inasmuch as, no compensation has been awarded by the authority, and only on complaint under Section 18 authority proceeded to direct for the refund of the money alongwith payment of interest @ MCLR + 1%, which was in view of Real Estate (Regulation & Development) (Agreement to Sale) Regulations, 2018. He further submitted that the order passed under Section 18 by the Regulatory Authority was within its competence as no compensation was awarded to the allottee and thus no adjudication as contemplated in Section 71 was required and only interest has been given as per Section 18 which did not require adjudication and was within the power of the authority as provided under Section 34 (f) of the Act of 2016. Sri. Tiwari lastly submitted that petitioner has an alternative remedy under Section 43 (5) of the Act of 2016 of filing an appeal before the Real Estate Appellate Tribunal as the said order is an appealable one.
8. Having heard learned counsel for the parties and from the perusal of records, before proceeding to decide the case on merits, we would like to have a conspicuous glance of the relevant provisions of the Act of 2016;
Section 2 (a) defines the Adjudicating Officer as under:
(a) “adjudicating officer” means the adjudicating officer appointed under sub-section (1) of section 71; Section 2 (I) defines the Authority as under:
(i) “Authority” means the Real Estate Regulatory Authority established under sub-section (1) of section 20; Section 2 (m) defines the commencement certificate as under:
(m) “commencement certificate” means the commencement certificate or the building permit or the construction permit, by whatever name called issued by the competent authority to allow or permit the promoter to begin development works on an immovable property, as per the sanctioned plan;
Section 2 (za) defines the interest as under:
(za) “interest” means the rates of interest payable by the promoter or the allottee, as the case may be. Explanation.-For the purpose of this clause- (i) the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default;
(ii) the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid;
9. Similarly, Section 2 (zk) defines Promoter.
10. Further, Chapter II of the Act deals with the registration of real estate project and registration of real estate agents. Section 3 is in regard to prior registration of real estate projects with RERA, which provides that no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the RERA established under the Act.
11. However, the first proviso provides for those projects that are going on the date of commencement of the Act and for which completion certificate has not been issued, the promoter shall make an application to authority for registration of said project within three months from the date of commencement of the Act.
12. Similarly, Section 4 provides application for registration of a real estate project. Section 18 of the Act provides for the return of money and compensation in case promoter fails to complete or give possession within time. Relevant portion is extracted here as under;
“18. Return of amount and compensation.- (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building-(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason,
he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:
Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this subsection shall not be barred by limitation provided under any law for the time being in force.
(3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.”
13. Chapter V deals with the Real Estate Regulatory Authority, Section 20 is in regard to the establishment and incorporation of Real Estate Regulatory Authority, which is extracted here as under;
“20. Establishment and incorporation of Real Estate Regulatory Authority.- (1) The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Authority to be known as the Real Estate Regulatory Authority to exercise the powers conferred on it and to perform the functions assigned to it under this Act:
Provided that the appropriate Government of two or more States or Union territories may, if it deems fit, establish one single Authority:
Provided further that, the appropriate Government may, if it deems fit, establish more than one Authority in a State or Union territory, as the case may be:
Provided also that until the establishment of a Regulatory Authority under this section, the appropriate Government shall, by order, designate any Regulatory Authority or any officer preferably the Secretary of the department dealing with Housing, as the Regulatory Authority for the purposes under this Act:
Provided also that after the establishment of the Regulatory Authority, all applications, complaints or cases pending with the Regulatory Authority designated, shall stand transferred to the Regulatory Authority so established and shall be heard from the stage such applications, complaints or cases are transferred.
(2) The Authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal, with the power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued.”
14. Section 31 of the Act deals with the filing of complaints with the authority or the Adjudicating Officer which provides for any person, who is aggrieved, may file a complaint with the authority or Adjudicating Officer in case of any violation or contravention of provisions of this Act or the rules and regulations made thereunder against any promoter, allottee or real estate agent.
15. Section 34 of the Act deals with the function of the authority, which is extracted here as under;
“34. Functions of Authority.-The functions of the Authority shall include-
(a) to register and regulate real estate projects and real estate agents registered under this Act;
(b) to publish and maintain a website of records, for public viewing, of all real estate projects for which registration has been given, with such details as may be prescribed, including information provided in the application for which registration has been granted;
(c) to maintain a database, on its website, for public viewing, and enter the names and photographs of promoters as defaulters including the project details, registration for which has been revoked or have been penalised under this Act, with reasons therefor, for access to the general public;
(d) to maintain a database, on its website, for public viewing, and enter the names and photograhps of real estate agents who have applied and registered under this Act, with such details as may be prescribed, including those whose registration has been rejected or revoked;
(e) to fix through regulations for each areas under its jurisdiction the standard fees to be levied on the allottees or the promoter or the real estate agent, as the case may be;
(f) to ensure compliance of the obligations cast upon the promoters, the allottees and the real estate agents under this Act and the rules and regulations made thereunder;
(g) to ensure compliance of its regulations or orders or directions made in exercise of its powers under this Act;
(h) to perform such other functions as may be entrusted to the Authority by the appropriate Government as may be necessary to carry out the provisions of this Act.”
16. Section 38 of the Act deals with the powers of authority, which is extracted here as under;
“38. Powers of Authority.- (1) The Authority shall have powers to impose penalty or interest, in regard to any contravention of obligations cast upon the promoters, the allottees and the real estate agents, under this Act or the rules and the regulations made thereunder.
(2) The Authority shall be guided by the principles of natural justice and, subject to the other provisions of this Act and the rules made thereunder, the Authority shall have powers to regulate its own procedure.
(3) Where an issue is raised relating to agreement, action, omission, practice or procedure that-
(a) has an appreciable prevention, restriction or distortion of competition in connection with the development of a real estate project; or
(b) has effect of market power of monopoly situation being abused for affecting interest of allottees adversely, then the Authority, may suo motu, make reference in respect of such issue to the Competition Commission of India.”
17. Chapter VII of the Act deals with the Real Estate Appellate Tribunal and Section 43 (5) provides for a remedy to any person aggrieved by any direction or decision or order made by the authority or by any Adjudicating Officer under the Act to file an appeal before the appellate tribunal within the timeline prescribed thereunder.
18. Chapter VIII of the Act deals with the offences, penalties and adjudication. Section 71 provides for the power to adjudicate. It is the Adjudicating Officer who is empowered under this provision to adjudicate in matters relating to compensation under Sections 12, 14, 18 and 19 of the Act. It is the Regulatory Authority who in consultation with the appropriate government shall appoint the Adjudicating Officer.
19. From the conjoint reading of the aforesaid provisions of law, it emerges that the Regulatory Authority which is established under Section 20 of the Act shall have the power of appointing Adjudicating Officer for adjudication of compensation under Section 71 in matters of Sections 12, 14, 18 and 19 of the Act. Section 2 (m) provides for the commencement certificate in regard to the construction of any project by the competent authority. In the present case, as it is evident from the pleadings of the parties that the project started sometimes in the year 2012, but on the date of enforcement of this Act the petitioner got their project registered with the RERA. The first proviso to Section 3 envisages a situation where on the date of commencement of the Act if any project is ongoing, the promoter shall make an application to the authority for registration of the project. In paragraph 4 of the writ petition there is a categorical averment to the fact that the project was registered with RERA.
20. Section 2 (za) deals with the matter relating to payment of interest payable by the promoter or the allottee, as the case may be. Explanation (ii) of the said section provides for those cases where interest is payable by the promoter to the allottee and it shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereof is refunded.
21. Thus, it is clear that Section 2 (za) (ii) does not restrict or provide that interest is payable only after the commencement of the Act, and it takes care of the fact that once the allottee had made deposit with the promoter he is liable to pay the interest from the date of deposit of the entire amount or part of the amount. Section 3 also takes care of those projects which are ongoing on the date of commencement of the Act and first proviso makes it mandatory for all the projects to be registered with the Regulatory Authority within three months from the date of commencement of the act.
22. Thus paving way for those projects also to be embraced within the fore-corners of this Act. Had the intention of the legislature was to exclude the ongoing projects, then such proviso to Section 3 would not have been added.
23. Similarly, Section 18 envisages a situation where promoter fails to complete the project in time or is unable to give possession of the apartment, plot or building, the allottee can demand back his money and can withdraw from the project and the promoter is duty bound to return the amount with interest, as prescribed, including the compensation. Sub-section 1 of Section 18 is very clear as far as the return of the amount alongwith interest is concerned.
24. The argument raised by learned counsel for the petitioner that the authority did not have the power of adjudication under Section 18 and it was only the Adjudicating Officer who was empowered under Section 71, who could have granted interest and compensation cannot be accepted as the provisions of Sub-section (1) of Section 18 is very clear that the allottee is entitled for refund of his amount alongwith interest, and in the present case the regulatory authority has not granted any relief beyond the return of the deposited amount with the promoter alongwith interest as has been provided under the Real Estate (Regulation & Development) (Agreement to Sale) Regulations, 2018.
25. Had the regulatory authority awarded any compensation then it would have been beyond its legal competence to do so as the matters relating to adjudication of compensation under Section 18 lies with the Adjudicating Officer.
26. As we have seen that Section 20 is in regard to the establishment of the regulatory authority and further Section 34 (f) provides for the functions of authority to ensure compliance of the obligations cast upon the promotes, allottees and real estate agents under this Act and the regulations made thereunder.
27. The importance of Section 38 lies on the fact that it provides power to the authority to impose penalty or interest in regard to any contravention of obligation cast upon the promoter and the allottees and the real estate agents under the Act.
28. In the present case the authority on the complaint of respondent no. 3 (allottee) proceeded to issue notices to the petitioner in regard to the refund of amount alongwith interest on the delayed project. Thus, the argument that power did not vests in the authority is totally misconceived as the Act categorically provides for the power to the authority under Section 38 to impose penalty or interest in regard to the contravention of obligation caste upon the promoters, the allottees and the real estate agents.
29. Similarly on the reading of Section 71 it is crystal clear that Adjudicating Officer has been adorned with the power of adjudicating compensation only under Sections 12, 14, 18 and 19 of the Act and not in regard to the refund of the amount or grant of interest on the amount deposited by the allottee with the promoter. Thus power of refund of amount alongwith interest which has been provided under Section 18, with the authority was rightly exercised by it in the interest of justice.
30. The argument raised by learned counsel for petitioner to the extent that the entire Act came into force on 01.05.2017 and the authority was constituted under Section 20 on that date, thus, it had no power to grant interest prior to the said date is totally misconceived and against the provisions of the Act, as Section 2 (za) (ii) clearly saves such situation and provides for the grant of interest to any allottee by the promoter from the date of deposit of the amount till the amount is refunded alongwith interest. Similarly, first proviso of Section 3 also provides for registration of ongoing project on the date of commencement of the Act, bringing within its ambit not only those projects which are going on but also projects started subsequently after the date of commencement of the Act so as to bring all projects within the fore-corner of the Act.
31. The argument of Sri. Tiwari, learned Senior Counsel, has force to the extent that petitioner has an alternative remedy under Section 43 (5) of the Act for filing an appeal before the Appellate Tribunal against any order, direction of the authority.
32. Reliance placed by Sri. Singhal upon the decision of this Court passed in M.R. Mittals Infratech Pvt. Ltd. (Supra) which is engaging the attention of the Apex Court is distinguishable in the facts of the present case, as in that case the petitioner had approached this Court for quashing the notice issued by the regulatory authority for the payment of interest, while present case has been filed challenging the final order so passed by the regulatory authority on the ground that the power vests in the Adjudicating Officer and not in the regulatory authority. In that case the Division Bench of this Court had directed the payment of interest to the allottee relying upon certain decision of Apex Court without examining and going into the provisions of the Act of 2016.
33. Thus, looking to the facts and circumstances of the case, we find that no indulgence is required in the present matter as the petitioner has an efficacious alternative remedy under Sub-section (5) of Section 43 of the Act of 2016 before the Appellate Tribunal.
34. Writ petition is misconceived and dismissed, accordingly.
35. No order as to costs.
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