Supreme Court of India - The power to supersede the authority is entrusted to the appropriate Government in terms of Section 82.

Supreme Court of India - The power to supersede the authority is entrusted to the appropriate Government in terms of Section 82.

Facts:-

• On 5 January 2024, one of the members of RERA superannuated.
• On 7 February 2024, the Chairperson resigned without giving notice of three months and the resignation was accepted immediately by the state Government.
• with effect from 10 March 2024, the remaining member of RERA proceeded on leave for a period of three months until 6 June 2024.
• On 9 March 2024, the State Government in the Department of Housing and Urban Development issued notice to the Authority proposing to supersede the Authority.

• On 12 March 2024, the State Government issued an order under Section 82(1) superseding the Authority.

• On 13 March 2024, the Government  appointed Shri M S Jaggi, IAS to exercise the powers and discharge the functions of the Authority under the Act in terms of the provisions of Section 82(1).

PIL in Punjab & Haryana High Court :-

• A Public Interest Litigation KEERTI SANDHU & ORS. V/s  STATE OF PUNJAB & ANR.CWP-(PIL) No. 48/2024  was moved before the High Court of Punjab & Haryana in which the order dated 14 March 2024 was passed by a Division Bench, where it noted that the authority has to exercise sensitive functions including permissions to be given to builders and dealing with complaints against builders and hence it is not in the interest of justice if the supersession is allowed at that point of time. Consequently, the order of the Government dated 12 March 2024 was stayed by the High Court.

Appeal in the Supreme Court of India :- 

• An appeal was preferred by the state in the matter of STATE OF PUNJAB & ANR. V/s KEERTI SANDHU & ORS.7152/2024 where the supreme court of india set aside the impugned order dated 14 March 2024 of the High Court.
• It also held that The power to supersede the authority is entrusted to the appropriate Government in terms of Section 82. 
• It also noted that The order of the High Court staying the notification of the State Government dated 12 March 2024 would not advance the purpose and object of the statute. 
• A stay on the supersession cannot either bring back the member who has superannuated or restore the Chairperson who has tendered his resignation.

P&H High Court - sole proprietors cannot be treated as an entity “other than individual” in RERA AGENT Registration.

 In the matter of Kumar Raunak and others versus State of Haryana and another CWP-20382-2018 The petitioners  who are sole proprietor(s)/ proprietorship , therefore, submitted an application for the registration as Real Estate agents to the Haryana Real Estate Regulatory Authority along with a Fees of 25,000/- which was the requisite registration fee as applicable to individuals under Rule 9 (2) of the 2017 Haryana Rules. 

The petitioners were issued the Registration Certificates as per law, valid for a period of 05 years. The petitioners, however, were served with letters by Haryana Real Estate Regulatory Authority, wherein it was submitted that the petitioners, having applied as a proprietorship concern, were required to submit the fee as applicable to the categories “other than individual” i.e. a sum of Rs. 2,50,000/- instead of Rs. 25,000/-.

A Demand for the deficient amount of Rs. 2,25,000/- was thus raised from the petitioners to be deposited within a period of 15 days failing which their license was threatened to be revoked.The period for depositing the amount was thereafter extended by the respondents vide public notice dated 18.05.2018 mandating the sole

proprietors to convert their registration certificates in the name of their respective proprietorship concerns on payment of the charges applicable to the entities “other than individuals”

The Court opined that Ordinarily understood, sole proprietorship is an unincorporated business that is just one owner by himself or herself. Creation of a separate business or a trade name is not necessary or a prerequisite in a sole proprietorship/sole proprietory business module and even if a separate business name is used for carrying on the business, the same by itself does not give any separate juristic entity or legal existence to the proprietary name separate and distinct from the owner.

The Court further opined that It is a well settled position in law that a proprietary concern and the proprietor are one and the same and that they cannot be treated as separate juristic entities and the petitioners as sole proprietors cannot be treated as an entity “other than individual”

P&H High Court - Courts, should adopt a liberal approach in allowing amendment of pleadings, for just and effective adjudication of the matter

AMENDMENT OF PLAINT 

Vishwa Nath through his LRs ..... Petitioners

Versus

Onkar Chand and another ..... Respondents

CR No.3838 of 2022 (O&M) Date of Decision: 30.11.2022

The petitioners-defendants have filed the present petition under Article 227 of the Constitution of India is for quashing of the order dated 09.08.2022 (Annexure P-1) passed by the learned Civil Judge (Junior Division), Mukerian, vide which an application filed under Order 6 Rule 17 of CPC by the respondents-plaintiffs, was allowed.

The High court opined that The Courts, no doubt, cannot be expected to turn a blind eye and rather must stay alive to any prejudice or injustice which may be caused to the opposite party on account of some amendment to the pleadings, which may have been allowed in an application moved under Order 6 Rule 17 of CPC. However, at the same time, the Courts, should adopt a liberal approach in allowing such amendment of pleadings, which may be necessary for just and effective adjudication of the matter in issue between the parties. The Administration of Justice cannot be allowed to be obstructed by a hyper technical approach while adjudicating upon the question of amendment of pleadings.

Court did not find any merit in the instant petitioner and the same stands dismissed. 

Mere obtaining of occupancy certificate does not oust the jurisdiction of the RERA Authority

Occupancy Certificate - Developer has obtained the occupancy certificate and not the completion certificate before the RERA came into effect - Therefore, it cannot be held that there was no requirement for even registration of the project by the developer with the RERA authority.

Court would not consider the petitioner to be outside the purview of the jurisdiction of the respondent- authority - Mere obtaining of occupancy certificate does not oust the jurisdiction of the respondent authority.

Section 3 - Haryana Real Estate Regulation and  Development Rules, 2017, Rule 2 - Registration - Petitioner having already applied for and obtained an occupation certificate as referred to above in terms of the Haryana Building Code, 2017, prior to  01.05.2017 - Petitioner still Required to get itself registered with the Authority - 

Held that simply obtaining of an occupancy certificate or having applied for  such certificate in terms of the Haryana Building Code, 2017 - Petitioner not outside the purview of the jurisdiction of the Authority.

Experion Developers Private Limited v. State of Haryana, 2022 (2) Law Herald 1660: 2022 (4) R.C.R.(Civil) 339 : 2022 (3) PLR 290 (P&H) (DB): Law Finder Doc Id #1981966 

If shared use of common areas is not allowed, the concept of apartments may not be workable

 In the Matter of Cap.(Retd.) Manmohan Lowe vs State Of Haryana And Others CWP No.960 of 2000 decided on 9 September, 2009 before Punjab-Haryana High Court

The High court observed that “If shared use of common areas is not allowed, the concept of apartments may not be workable as persons living on different floors require certain services in the complex itself. Purchasers of apartments are also attracted by the services available in a complex and are directly or indirectly made to pay for such services.”

P&H High Court - The intent of the advisory issued by the Government of India was certainly not to accommodate such defaulters

 The Ministry of Housing and Urban Affairs (MOHUA) in its Office Memorandum dated 13 May 2020 (Advisory) has declared the current pandemic as a force majeure event for the purposes of Real Estate (Regulation and Development) Act 2016 (RERA) and extended the timelines for registration and completion of real estate projects.

The circular dated 13.5.2020 issued by Real Estate Regulatory Authority, Punjab (RERA) whereby it extended the period of validity of registration of projects by six months was challenged in the Punjab and Haryana High Court in the Matter of Vinod Kumar v. Union of India and others CWP-8781-2020 decided on dated 30.06.2020 whereas the High court held that “we are not impressed by the argument. We fail to understand the need for passing a omnibus order giving protection to all the projects in State of Punjab, particularly when the Act has a specific provision for entertaining an application on behalf of the promoter/builder for extension of time. There is no doubt that 'Force Majeure' clause can be invoked for this purpose. However, the applicant who would approach the RERA would have to convince it that he has been forced by circumstances beyond his control to continue with the Project. Surprisingly, the circular may even give protection to those promoters/builders whose registration may have expired long back. The intent of the advisory issued by the Government of India was certainly not to accommodate such defaulters. We, thus, find something palpably wrong with the circular. Thus, operation of impugned circular dated 13.5.2020 (Annexure P-1) is hereby stayed.

P&H High Court - Authority has no power or jurisdiction to reduce the time period mentioned in the declaration

 In the Matter of M/S Parador Developers ... vs Real Estate Regulatory Authority RERA Appeal No.19 of 2020 decided on 27 November, 2020 before THE HIGH COURT OF PUNJAB AND HARYANA

Fact of the Matter

• Vide request dated 13.10.2017, the appellant sought permission for change of land use of an area measuring 93.265 acres for development of a residential colony. 
• The Department of Town and Country Planning, Punjab, granted permission for change of land use vide its memo dated 17.10.2017. 
• Consequently, an application for grant of licence was made to the Amritsar Development Authority, who, granted the licence vide its memo dated 13.06.2019. Licence period was 5 years ending on 12.06.2024. 
• Thus, application dated 10.09.2019 was filed before the Real Estate Regulatory Authority, Punjab (hereinafter referred to as the 'Authority) for registration of Phase-I of the residential colony under the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as 'the Act'). 
• A declaration in Form-B was also filed stating that the development 1 of 8 work would be completed on or before 12.06.2024. 
• Phase-I was registered but the validity thereof was reduced by one year i.e. upto 12.06.2023. 
• The appellant sought a clarification and vide memo dated 13.11.2019. 
• The Authority clarified that registration was uptill 12.06.2023 only as the group housing component was not being executed in Phase-I. 
• Thus, the appellant filed a statutory appeal before respondent No.2 but the same has been dismissed vide order dated 03.07.2020.  (This Order is published on this blog on 18.05.2021)
• Hence, the present appeal has been filed under Section 58 of the Act.

Order of the High Court 

 It is held that the Authority has no power or jurisdiction to reduce the time period mentioned in the declaration. If it feels that the period mentioned is arbitrary or unacceptable due to any reasons, a notice to show cause for rejection of the application must be given.

The sole member of the RERA Authority & RERA APPETITE Tribunal does not have jurisdiction to dispose of order and appeal.

 In the case of man global limited vs ram prakash joukani (Second Appeal No. 14840 Of 2019 Alongwith Civil Application No. 785 Of 2019) the Bombay high court observed that “the sole member of the said Tribunal does not have jurisdiction to dispose of appeal or any application including even an application for condonation of delay in filing appeal.”

Reliance was made on the earlier matter of Neelkamal Realtors Suburban Pvt. Ltd. and Anr. (2017 SCC OnLine Bom9302) where the Bombay high court has held that two member bench of the Tribunal shall always consist of a judicial member. It is also held that in the constitution of the Tribunal, the majority of the members shall always be judicial members.

In the matter of Altus Space Builders Pvt. Ltd vs Union Of India And Others CWP No.32437 of 2019 decided on 16 October, 2020 before Punjab & Haryana High Court the Court struck down Regulations 7 and 8 of the Punjab RERA Procedure Regulations as being ultra vires the Act.

the Court ruled that “A Single Member of the Authority cannot validly pass orders on a complaint under the Act.” 

the Court also ruled that “A Single Member of the Appellate Tribunal cannot validly pass orders in the appeals before it.”

Punjab & Haryana High Court - the requirement of pre- deposit of the amount, as set out in the proviso to Section 43 (5) of the Act, cannot be held to be unreasonable or arbitrary

 In the Matter of Experion Developers Pvt. Ltd. V/s State of Haryana and others Complaint no, CWP No. 38144 of 2018 and other connected matters decided on 16.10.2020 before Punjab & Haryana High court

• These writ petitions under Article 226 of the Constitution raise several important questions of law concerning the interpretation of the provisions of the Real Estate (Regulation and Development) Act, 2016 (hereinafter 'the Act') as well as the Haryana Real Estate (Regulation and Development) Rules, 2017 (hereinafter 'the Haryana Rules').

• In some of these petitions, a challenge has been raised to the constitutional validity of the proviso to Section 43 (5) of the Act and correspondingly the orders passed by the Real Estate Appellate Tribunal (hereinafter 'Appellate Tribunal') rejecting the prayer of the Petitioners for waiver of the pre-deposit for entertaining the appeal against an order of either the Real Estate Regulatory Authority ('Authority') or the Adjudicating Officer ('AO'), as the case may be.

• Under Section 43(5) ,where the order appealed against imposes a penalty, the promoter has to deposit at least 30% of the penalty amount or such higher amount as may be directed by the Appellate Tribunal. 

• Where the appeal is against any other order which involves the payment of an amount to the allottee, then what has to be deposited with the Appellate Tribunal is "the total amount to be paid to the allottee" by such promoter/appellant "including interest and compensation imposed on him, if any, or with both, as the case may be." Further, such an amount has to be deposited "before the appeal is heard."

• The further prayer in these petitions is that given the undue hardship faced by the Petitioners, the aforesaid orders of the Appellate Tribunal should be interfered with by this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, and the Appellate Tribunal be directed to entertain the Petitioners' appeals without insisting on the pre- deposit.

Order of the High Court

• This Court has perused the decision in M/s. Lotus Realtech Pvt. Ltd. v. State of Haryana CWP No. 15205 of 2020 (O&M) 

• The law laid down by the Supreme Court in the  M/s. Technimont Pvt. Ltd. v. State of Punjab AIR 2019 SC 4489 is that the right of appeal is the creature of a statute and therefore, is and can be made conditional upon fulfilling certain conditions by the statute itself and therefore, any requirement of fulfillment of a condition imposed by the statute itself before a person can avail the remedy of appeal is a valid piece of legislation.

• Appellate Authority does not have the inherent powers to waive the limitation or precondition prescribed by the statute for filing an appeal as the inherent incidental or implied powers vested in the Appellate Authority cannot be invoked to render a statutory provision nugatory or meaningless.

• the treatment of promoters as a class different from other appellants satisfied the test of reasonableness laid down by several judgments of the Supreme Court explaining Article 14 of the Constitution of India.

• as the promoters form a distinct and separate class and as the prescription of the condition of pre-deposit upon the promoters is in furtherance of the object of the legislation, therefore, the imposition of the condition of pre- deposit upon the promoters satisfies the test of Article 14 of the Constitution of India."

• The proviso to Section 43 (5) of the Act clearly states that the pre-deposit is required to be made "before the said appeal is heard." In other words, the Appellate Tribunal is not obliged to proceed to 'entertain' or hear an appeal that has been filed before it, if the promoter, who has filed such appeal, fails to comply with the direction for making the pre-deposit in terms of the proviso to Section 43 (5) of the Act.

• even the High Court cannot issue any direction in that regard contrary to the Act, since it does not have the powers vested in the Supreme Court under Article 142 of the Constitution of India.

• In each of the individual writ petitions before this Court, where the order of the Appellate Tribunal declining to waive the requirement of pre-deposit has been challenged, this Court finds that in the facts and circumstances of the individual cases, no grounds have been made out to persuade this Court to exercise its writ jurisdiction under Article 226 of the Constitution to grant any relief in respect thereof. In none of the cases is the Court satisfied that a case of 'genuine hardship' has been made out.

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There is no provision in the RERA Act which envisaged either the Authority or the Appellate Tribunal to function with a single member

 The Punjab & Haryana High Court vide its order Janta Land Promoters Pvt. Ltd vs Union Of India And Others CWP No. 8548 of 2020, dated 16.10.2020, ruled that there was no provision in the Real Estate (Regulation and Development) Act, 2016, (“RERA Act”) which envisaged either the Authority or the Appellate Tribunal to function with a single member while exercising quasi-judicial or adjudicatory functions.

The key points of this judgement are as follows:  

•  The High Court ruled that the adjudicatory power of the Authority could not be transferred to a single member without express provision in the RERA Act.

• While interpreting the provisions provided under Section 21 of the RERA Act, the court held that it is clear that the Authority is a multi member body and that it cannot be considered to be an Authority if it is not comprised of its Chairperson and at least two whole time members. This has to be read along with Section 29 of the RERA Act which deals with the meetings of the Authority.

• Similarly referring to Section 43 of the RERA Act, the Court declared that an Appellate Tribunal was required to have at least two members, out of which, one was to be a judicial and other a technical or administrative member.

•  The court went to hold that any order passed by such Single Member Bench of the Appellate Tribunal would be null and void in law.