Hon'ble High Courts shall entertain the Writ petitions and exercise their discretionary powers as provided in terms of Article 226 of the Constitution of India, only in exceptional circumstances

Hon'ble High Courts shall entertain the Writ petitions and exercise their discretionary powers as provided in terms of Article 226 of the Constitution of India, only in exceptional circumstances, where either the Adjudicating Authority acted without jurisdiction or there was violation of the principles of Natural Justice.

 In the case of Whirlpool Corpn. v. Registrar of Trade Marks [1998] 8 SCC 1 

wherein, the Supreme Court laid down the triple test for entertaining a writ petition despite availability of the remedy of an appeal in contractual matters i.e., 

firstly if the action of the respondent is illegal and without jurisdiction, 

secondly if the principles of natural justice have been violated and 

thirdly if the petitioner's fundamental rights have been violated.

In the case of Barik Biswas vs Union of India & Ors., Hon'ble High Court of Delhi also dismissed the writ petition and held that 

"the action of coming to this Court is premature and therefore, this Court is of the view that since the petitioners have effective and efficacious remedy under PMLA, necessitating institution of the petition by invoking extraordinary jurisdiction of this Court is not appropriate at this stage. If this Court were to enter into the merits of this case at this stage, it would amount to scuttling the statutorily engrafted mechanism i.e. PMLA."

However, the Hon'ble High Court of Madras in the case of A.Kamarunnisa Ghori and Others , accepted the Writ Petition on a limited point, where the Enforcement Directorate and Adjudicating Authority interpreted the law in a way different from the view point of the Hon'ble Court. Against the argument of presence of alternate remedy, the Hon'ble Court held that "in view of the fact that the order of the Appellate Tribunal is ultimately subject to an appeal to this Court under Section 42 of the Act. By the time the petitioners go before the Appellate Authority and thereafter come up before this Court under Section 42, the petitioners would have long lost possession of their properties" and hence prejudiced.

Madras High Court : the election dispute raised by the Petitioner in terms of by-laws can be adjudicated only through public fora (Courts) & not through Arbitration, which is confidential in nature.

 Madras Sporting Youngsters Football Club vs. Tamil Nadu Football Association and Ors. (Madras High Court, decided on 31.01.2022), 

was a Petition under Section 11 of the #arbitration & conciliation Act, 1996 for appointment of and #arbitrator, where this question was raised.

Here Madras Sporting Youngsters Football Club (MSYFC) was challenging the appointment of the 4th Respondent (R4), as the secretary of the TN Football Association, and was relying on the arbitration clause contained in the by-laws of the TN Football Association.

The court observed as follows:

1. The dispute raised by MSYFC is an election dispute TN Football Association, in which R4 was elected as Secretary. R4 is not a member of the TN Football association as only Football clubs can be its members.

2. Therefore R4 is not a party to the by-laws of the TN Football association, which contain the arbitration clause. He has neither signed the by-laws nor agreed to the terms and conditions contained therein. 

3. By-laws of a society are internal regulations of the said society applicable only to its members, and is a public document. It is not a person-centric or private documents. 

4. Therefore, several parties may be interested in the by-laws such as players, stage, members, etc. In view of the same, the election dispute raised by the Petitioner in terms of by-laws can be adjudicated only through public fora (Courts) & not through Arbitration, which is confidential in nature. 

5. Matters such as actions for enforcement of in-rem rights can only be adjudicated by public fora, and stand excluded from purview of private fora by necessary implication such disputes are incapable of being resolved in arbitration. (Reliance placed on Booz Allen & Hamilton Inc. V. SBI Home Finance Ltd., 2011 5 SCC 532)

6. If the subject matter of a dispute affects third party rights, it is not arbitrable. (Reliance placed on Vidya Drolia V. Durga Trading Corporation 2021 (2) SCC 1)

7. Disputes involving public interest or interests of numbers persons not parties before Court and disputes relating to election to public offices are non-arbitrable. (Reliance placed on Afcons Infrastructure Ltd. V. Cherian Varkey 2010 (8) SCC 24)

In view of the above observations, the Court dismissed the Petition under Section 11 for appointment of arbitrator. 

Delhi High Court : only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

Bhopal Dal Udyog v. Food Corporation Of India (Delhi High Court, Division Bench, decided on 04.01.2022), 

The Arbitrator had awarded Liquidated Damages (LD) in favour of the Respondent, relying on clause of the Agreement between the parties, in addition to the actual loss suffered by the Respondent (which was proved), as a result of the breach of Contract by the Appellant. 

The Court observed as follows:-

1. Section 74 of the Indian Contract Act, 1872 provides that when a sum has been named in a contract, as the amount to be paid on breach, the party complaining of breach is entitled, whether or not actual damage or loss is proved to have been caused, to receive from the party in breach, reasonable compensation not exceeding the amount so named. (Commonly called LD)

2. Such a sum named in the contract, is payable only if it is a genuine pre-estimate of damages, fixed by both parties, and found to be such by Court/arbitrator.

3. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

4. In the Present case as the actual damages suffered by the respondent were proven and accepted by the #Arbitrator, LD over and above such actual damages could not have been awarded.

(Reliance placed on Kailash Nath Associates v. DDA & Anr., (2015) 4 SCC 136)

On the basis of above, the Arbitral Award was set aside to the limited extent of the Liquidated Damages being awarded over and above the actual damages.

Supreme Court of India: Triple Tier Test for prosecution under Section 138 of the Negotiable Instruments Act, 1881

Supreme Court of India : Alka Khandu Avhad v. Amar Syamprasad Mishra (2021) 4 SCC 675

Honourable Supreme Court of India has designed the Triple Tier Test for prosecution under Section 138 of the Negotiable Instruments Act, 1881.Para 9. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied:

9.1. That the cheque is drawn by a person and on an account maintained by him with a banker.

9.2. For the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability.

9.3. The said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account.

Supreme Court of India:here is no bar on limitation for filing of the corruption cases in India

  Supreme Court of India : P. Ramachandra Rao v. State of Karnataka (2002) 4 SCC 578

Honourable Supreme Court of India has held that there is no bar on limitation for filing of the corruption cases in India as Prevention of Corruption Act, 1988 does not have such scheme of limitations

Supreme Court : Even after a petition under Section 7 of the IBC is admitted and before the Committee of Creditors is formed, the parties can settle the dispute

 Supreme Court : Swiss Ribbons Pvt Ltd and Anr. v. Union of India and Ors (2019) 4 SCC 17

Even after a petition under Section 7 of the IBC is admitted and before the Committee of Creditors is formed, the parties can settle the dispute. Further, even after the CoC is formed, Section 12A of the IBC does provide for a mechanism through which the petition can be withdrawn (if the parties were to reach a settlement);

Supreme Court : NCLT can not dismiss the petition on the basis that the corporate debtor has initiated the process of settlement with the financial creditors

 Supreme Court :ES Krishnamurthy v. M/S Bharath Hi Tech Builders Pvt Ltd.,

the legal issue before the apex court was whether the NCLT can, without applying its mind to the merits of the petition under Section 7, simply dismiss the petition on the basis that the corporate debtor has initiated the process of settlement with the financial creditors.

The Court found that the NCLT and NCLAT had abdicated their jurisdiction to decide a petition under Section 7 by directing the respondent to settle the remaining claims within three months, noting that such a course of action is not contemplated under the IBC except either admit or reject an application respectively contemplating occurrence of debt and default.

The Bench stated that while settlements can be encouraged by the NCLT and NCLAT to achieve the objectives of the IBC, however, "they cannot direct them by acting as courts of equity."

Madras High Court : The private rights of an individual to acquire title by adverse possession cannot be upheld when the same is put up against the public rights of the beneficial owners

 Thankappan Vs The State of Tamil Nadu S.A.(MD)No.252 of 2005 JUDGMENT PRONOUNDED ON : 10.02.2022 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

The occupier can plead and prove title by adverse possession only as long as the Government property remains as a Government Poramboke, not being reserved for any public purposes. Only in those cases,the occupier can invoke Article 112 of the Limitation Act and claim title by adverse possession. In all other cases, where the properties are being classified and reserved for public purposes, since he cannot have anyanimus as against all the beneficial owners, the occupier cannot acquire title by adverse possession.The private rights of an individual to acquire title by adverse possession cannot be upheld when the same is put up against the public rights of the beneficial owners. Hence, no occupier can acquire title by adverse possession over a water body or any other land reserved for public purposes despite being in possession beyond the statutory period of 30 years

Suprem court : jurisdiction of the Lok Adalat under Section 20 is to facilitate a settlement of disputes between the parties in a case.

 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY (NOIDA) V/s YUNUS & ORS. CIVIL APPEAL NO.901 OF 2022 (Arising out of SLP (C) No. 9927 of 2020)

It is clear beyond the shadow of any doubt that the jurisdiction of the Lok Adalat under Section 20 is to facilitate a settlement of disputes between the parties in a case. It has no adjudicatory role. It cannot decide a lis. All that it can do is to bring about a genuine compromise or settlement. 

The Lok Adalat by virtue of the express provisions is only a facilitator of settlement and compromise in regard to matters which are referred to it. It has no adjudicatory role (See State of Punjab & Anr. v. Jalour Singh & Ors (supra))

In Union of India v. Ananto (Dead) & Anr.14, this Court inter alia held as follows:

“7. The specific language used in sub-section (3) of Section 20 makes it clear that the Lok Adalat can dispose of a matter by way of a compromise or settlement between the parties. Two crucial terms in sub-sections (3) and(5) of Section 20 are "compromise" and "settlement". The former expression means settlement of differences by mutual concessions. It is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification of demands.

As per Termes de la Ley, "compromise is a mutual promise of two or more parties that are at controversy". As per Bouvier it is "an agreement between two or more persons, who, to avoid a law suit,amicably settle their differences, on such terms as they can agree upon".The word "compromise" implies some element of accommodation on each side. It is not apt to describe total surrender. [See Re NFU Development Trust Ltd. [1973] 1 All ER 135(Ch.D)]. A compromise is always bilateral and means mutual adjustment. "Settlement" is termination of legal proceedings by mutual consent. The case at hand did not involve compromise or settlement and could not have been disposed of by Lok Adalat. If no compromise or settlement is or could be arrived at, no order can be passed by the Lok Adalat. Therefore, question of merger of Lok Adalats order does not arise.”

https://www.livelaw.in/pdf_upload/new-okhla-industrial-development-authority-noida-vs-yunus-2022-livelaw-sc-123-408906.pdf

Supreme Court : parties are entitled for the refund of the Court Fees in case of private amicable negotiation without intervention of the Hon’ble Courts

 High Court of Madras v. M.C. Subramaniam (2021) 3 SCC 560

Honourable Supreme Court of India has held that parties are entitled for the refund of the Court Fees in case of private amicable negotiation without intervention of the Hon’ble Courts as prescribed under aegis of Section 89 of the Code of Civil Procedure, 1908

Supreme Court : the banks had failed to comply with their duties, and had in fact colluded with the developer in committing a fraud on the home buyers, and breaching public trust.

 Bikram Chaterjee vs. Union of India, [2018]147 SCL 154 wherein the Apex Court took cognizance of the fact that the banks had failed to comply with their duties, and had in fact colluded with the developer in committing a fraud on the home buyers, and breaching public trust. It may be useful to refer to paragraphs 69 and 127 of the judgement, which reads as under-

“69. In the instant matter, the question of larger public importance is involved. It is a shocking and surprising state of affairs that such large scale cheating has taken place and middle and poor class home buyers have been duped and deprived of their hard-earned money and lifetime savings and some of them had taken a loan from the bank and they are not getting houses. Bank has made payment to the builder, owners have the liability of making payment of amount with interest, homebuyers are still waiting for their dream houses to be completed.

127. The Forensic Auditors’ report makes it apparent that Bankers have failed to ensure and oversee that the money was invested in the projects. It was diverted elsewhere as rightly found by the Forensic Auditors. Even what was paid by the home buyers, had not been used in the projects and stands diverted. There was, in fact, no necessity for raising the loans from the bank. The money borrowed from banks was used to create other assets worth thousands of crores. Thus, the banks can realise their money from those assets  and from guarantors and not from the investment of home buyers, not from the buildings in which loans granted by banks have not been invested, which have been erected partially or some are at the nascent stage, for which hard- earned money has been paid by the home buyers”

Delhi High Court : The Bank has disbursed the loan amount to the builder, and in these circumstances, it remains to the seen as to whether, or not, the petitioner is at all liable.

 Hirdesh Kumar Pathak v Bank of Maharashtra WP (C) 6774/2021 Delhi High Court

“In our view, prima facie, it appears that the petitioner has been taken for a ride by the builder and it is not the petitioner, who has received the loan amount. The Bank has disbursed the loan amount to the builder, and in these circumstances, it remains to the seen as to whether, or not, the petitioner is at all liable. Moreover, the Resolution Plan appears to be on force and there would be no justification to subject the petitioner to the ongoing proceedings before the DRT at this stage. We, accordingly, stay further proceedings in O.A No. 166/2019 pending before the DRT-II, Delhi, till further orders.”

Housing Finance Company (Reserve Bank) Directions, 2021 issued by the RBI on 17.02.2021

Housing Finance Company (Reserve Bank) Directions, 2021 issued by the RBI on 17.02.2021

88. Disbursement of housing loan to individuals linked to the stages of construction

88.1 Disbursal of housing loans sanctioned to individuals shall be strictly linked to the stages of construction of the housing projects/ houses and upfront disbursal shall not be made in case of incomplete/ under-construction/ green field housing project/ houses.

88.2 HFCs while introducing any kind of product shall take into account the customer suitability and appropriateness issues and also ensure that the borrowers/customers are made fully aware of the risk and liabilities under such products.

88.3 In cases of projects sponsored by Government/ Statutory Authorities, HFCs may disburse the loans as per the payment stages prescribed by such authorities, even where payments sought from house buyers are not linked to the stages of construction, provided such authorities have no past history of non-completion of projects.

88.4 HFCs shall desist from offering loan products involving servicing of the loan dues by builders/ developers etc. on behalf of the borrowers.

88.5 HFCs shall have in place a well-defined mechanism for effective monitoring of the progress of construction of housing projects and obtaining consent of the borrower(s) prior to release of payments to the builder/developer.

circular dated 09.07.2019 issued by the NHB,

 circular dated 09.07.2019 issued by the NHB, 

“3. Based on a review of the matter, HFCs are advised to desist from offering loan products involving servicing of the Loan dues by builders/ developers etc. on behalf of the borrowers. The prevalent products of HFCs, if any, should also be reviewed on the above lines. It is clarified that the above stipulation shall also be effected in cases wherein the HFC is yet to commence disbursements under the sanctioned cases.

Further, reference is also drawn to the Circular No.NHB(ND)/DRS/Policy Circular No.75/2016-17 dated July 01, 2016 whereby HFCs were again advised that disbursal of housing loans should be strictly linked to the stages of construction and no upfront disbursal should be made in case of incomplete/un-constructed projects. It is reiterated that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project/houses. In cases of projects sponsored by Government/Statutory Authorities, HFCs may disburse the loans as per the payment stages prescribed by such authorities, even where payments sought from house buyers are not linked to the stages of construction, provided such authorities have no past history of non-completion of projects.

HFCs should have in place a well-defined mechanism for effective monitoring of the progress of construction of housing projects and obtaining consent of the borrower(s)

prior to release of payments to the builder/ developer. Merely obtaining borrower consent and release of funds by the company without linkage to the stage of construction will be seen as dereliction of duty of the HFC.”

RBI circular dated 01.07.2015, pertaining to the issue of subvention schemes or “innovative housing loan schemes”

RBI circular dated 01.07.2015, pertaining to the issue of subvention schemes or “innovative housing loan schemes”. Paragraph 3 (d) (e) and (f) of the same which read as under:

“(d) It has been observed that some banks have introduced certain innovative Housing Loan Schemes in association with developers / builders, e.g. upfront disbursal of sanctioned individual housing loans to the builders without linking the disbursals to various stages of construction of housing project, Interest/EMI on the housing loan availed of by the individual borrower being serviced by the builders during the construction period/ specified period, etc. This might include signing of tripartite agreement between the bank, the builder and the buyer of the housing unit. These loans products are popularly known by various names like 80:20, 75:25 schemes

Such housing loan products are likely to expose the banks as well as their home loan borrowers to additional risks e.g. in case of dispute between individual borrowers and developers/builders, default/ delayed payment of interest/ EMI by the developer/ builder during the agreed period on behalf of the borrower, non-completion of the project on time etc. Further, any delayed payments by developers/ builders on behalf of individual borrowers to banks may lead to lower credit rating/ scoring of such borrowers by credit information companies (CICs) as information about servicing of loans get passed on to the CICs on a regular basis. In cases, where bank loans are also disbursed upfront on behalf of their individual borrowers in a lump-sum to builders/ developers without any linkage to stages of constructions, banks run disproportionately higher exposures with concomitant risks of diversion of funds.

Banks are advised that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project / houses and upfront disbursal should not be made in cases of incomplete /under-construction / green field housing projects.”

CCI- A mere letter from the company that the super area has increased is not sufficient to claim any amount from the allotte

 In the Matter of Belaire Owners' Association vs Dlf Limited, Huda CASE NO.19/2010 the Competition Commission of India held that 

" there may be instances where at the time of actual construction, certain minor changes are required to be made in some of the drawing board plans and the building is constructed slightly different from the drawing board plan but it,  more or less, conforms to the drawing board plan. In such a case, there may be either minor (say + 2%) increase or decrease in the super area as well as the carpet area of each apartment. However, the company if substantially changes the lay-out plan resulting, in more than 2% increase or decrease in super area, the allottees' consent should be obtained for such changes in the lay-out plans. Since the price paid by the allottee is per sq. ft. of super area, the price of the apartment would increase or decrease after the actual building is constructed. In order to lay a claim on the basis of increase in super area, the company is supposed to give information to the allottee about the difference in the initial building plan and the actually-constructed building plan on the basis of which the new super area is calculated. The actual plan should be the one submitted to the authorities for completion certificate and on the basis of which occupancy certificate is granted. The calculations of increased area should be sent to the allottee, so that the allottee knows and can verify on ground as to how his super area has increased. A mere letter from the company that the super area has increased is not sufficient to claim any amount from the allottee. Thus, whenever a claim on the basis of increase in super area is made, the company is bound to give the relevant information as to how the super area stands increased.

mutual settlement is always bilateral and not unilateral

 

In the Matter of Sharad Avasthi V. Pivotal Infrastructure Pvt. Ltd. Appeal No.140 of 2019 before THE HARYANA REAL ESTATE APPELLATE TRIBUNAL it was held that "mutual settlement is always bilateral and not unilateral. The affidavit-cum-undertaking given by one party cannot constitute the mutual settlement."

the allottees will not lose their right to claim interest for delayed possession merely on the ground that the conveyance deed had already been executed

 Amit Gupta Vs. Athena Infrastructure Ltd.Appeal No.79 of 2020 in Haryana Real Estate Appellate Tribunal,

The complaint filed by the appellant-allottee for grant of interest for delayed possession was dismissed by Ld. Haryana Real Estate Regulatory Authority, Gurugram The only ground taken in the order is that as the conveyance deed had already been executed, so the complaint was not maintainable.

It was held by the Appellate tribunal that 

"In our view the approach of the Ld. Authority is erroneous. The Hon'ble Apex Court in case Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and others vs. DLF Southern Homes Pvt. Ltd. (now known as BEGUR OMR Homes Pvt. Ltd.) and others 2020(3) R.C.R.(Civil) 544 has laid down as under:-

“The developer in the present case has undertaken to provide a service in the nature of developing residential flats with certain amenities and remains amenable to the jurisdiction of the Consumer Fora. Consequently, we are unable to subscribe to the view of the NCDRC that flat purchasers who obtained possession or executed Deeds of Conveyance have lost their right to make a claim for compensation for the delayed handing over of the flats.”

In view of the aforesaid ratio of law laid down by the Hon'ble Apex Court, the allottees will not lose their right to claim interest for delayed possession merely on the ground that the conveyance deed had already been executed. The execution of the conveyance deed cannot extinguish the cause of action which had already accrued to the allottee due to delay in delivery of possession. Thus, the impugned order passed by the Ld. Authority is not sustainable. Consequently, the present appeal is hereby allowed. The impugned order dated 19.12.2019 is hereby set aside.

Plaintiff is entitled to decree of specific performance where the plaintiff has done substantial acts in consequence of a contract/agreement to sell

 In Jinesh Kumar Jain v. Iris Paintal, MANU/DE/3387/2012, the DELHI HIGH Court held that 

the plaintiff is entitled to decree of specific performance where the plaintiff has done substantial acts in consequence of a contract/agreement to sell. Substantial acts obviously would mean and include payment of substantial amounts of money. The plaintiff may have paid 50% or more of the consideration or having paid a lesser consideration he could be in possession pursuant to the agreement to sell or otherwise is in the possession of the subject property or other substantial acts have been performed by the plaintiff, and acts which can be said to be substantial acts under Section 20(3) of Specific Relief Act. However, where the acts are not substantial i.e. merely 5% or 10% etc. of the consideration is paid i.e. less than substantial consideration is paid, (and for which a rough benchmark can be taken as 50% of the consideration), and/or plaintiff is not in possession of the subject land, the plaintiff is not entitled to the discretionary relief of specific performance.

SC - Right to appeal is neither an absolute right nor an ingredient of natural justice

 Vijay Prakash D. Mehta v. Collector of Customs (1988(4) SCC 402), wherein the  Apex Court observed: 

 "9. Right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi-judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant."

in The Anant Mills Co. Ltd. v. The State of Gujarat (1975(2) SCC 175), it was held that

"...The right of appeal is the creature of a statute. Without a statutory provision creating such a right the person aggrieved is not entitled to file an appeal.

the terms of registered document can be altered, rescinded or varied only by subsequent registered document and not otherwise

 S. Saktivel(Dead) Vs. M. Venugopal Pillai & Others, (2000) 7 SCC 104 wherein the Supreme Court with reference to Section 92 proviso (4) of the Indian Evidence Act held thus:

the terms of the registered document can be altered, rescinded, or varied only by subsequent registered document and not otherwise

HIGH COURT OF CHHATTISGARH - No appeal will be maintainable against an interim order before the Division Bench

In the Matter of Amrit Homes Private Limited vs M/S Las Vista Residents Welfare  WA No.470 of 2019 at HIGH COURT OF CHHATTISGARH, BILASPUR held that appeal is maintainable only as provided under the statue; particularly Section 2 of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006. Section 2(1) carries a 'proviso' as well, which clearly says that no appeal will be maintainable against an interim order. This scope of the said proviso has been explained by a Full Bench of this Court as per the judgment date 25/01/2017 passed in WA No.255/2016, which says that only, if the issue has been decided creating a finality to the lis, will the appeal be maintainable before the Division Bench.

Supreme Court of India -Charge of the money paid by the home buyers must be treated as the highest priority.

in the matter of Bikram Chatterjee and others vs. Union of India and others in Writ Petition (C) No.940 of 2017 and other connected matters, (MANU/SC/0947/ 2019) The Apex Court held that charge of the money paid by the home buyers must be treated as the highest priority. It also held that "the public trust doctrine enshrined under Article 21of the Constitution of India is very much applicable upon the authorities and a duty is cast upon them to act fairly and reasonably in order to promote the public good and public interest."

Hence, amount charged by builder on account of delay in payment of installments which comes of ₹2,69,675/- approximately stands quashed.

 TDI Infrastructure Ltd. vs Sukhbir Singh decided on 25.03.2021. Haryana RERA Panchkula

Authority has passed a detailed order vide which settled all issues and are reproduced here in brief and be read as part of this order also:

a. Stamp Duty / Misc. expenses: Authority asked respondent to withdraw charges of amount ₹11,800/- subject to the condition that all these expenses will be borne by the consumer himself at the time of conveyance deed is executed and registered.

b. Club Membership Charges: On raise a demand of ₹50,000/- by the builder on account of club membership charges which is presently not functional, therefore, the Authority decides that these charges shall be payable by the consumer only when the club becomes functional.

c. Increase in super area: Authority directed that the area covered by staircase as per principles laid down in earlier decisions by HRERA, cannot form part of super area and the same is liable to be deducted from the super area to calculate the actual cost. Considering the cost incurred by builder to construct the staircase, Authority would hold that the builder shall divide the actual cost of the staircase by the total number of flats in the building and then the proportionate cost so arrived shall then be charged from the consumer.

d. Goods and services Tax: The builder is charging GST @ 12% while according to consumer, it should be @ 5%. The Authority directed that, the rate of charging GST by the builder will be based on the date when the conveyance deed is executed and registered in favor of consumer.

e. Interest on account of delay in offer of possession: As per clause 28 of FBA, builder was obliged to give possession to the consumer within 30 months which period had already lapsed in July, 2016. And, since builder offered Fit-out Possession but hedoes not have the occupation certificate (OC) till date, so the offer cannot be considered valid and consumer is entitled to receive interest on account of delay in offering possession from the deemed date of July, 2016 to the date on which a valid possession will be offered to him after obtaining the occupation certificate. Such interest as per decision of Authority in case Madhu Sareen vs BPTP Limited is to be calculated as per Rule 15 of HRERA Rules,2017. 

The HRERA also ordered:

2) Since occupation certificate has not been obtained till date so the Fit-out possession which was offered on 04.04.2019 cannot be considered a legally valid offer.

3) In current situation, when builder himself has failed to deliver a valid possession till date to consumer, he cannot be allowed to charge interest on delay in payment of installments, Hence, amount charged by builder on account of delay in payment of installments which comes of ₹2,69,675/- approximately stands quashed.

that every allegation / averment in the plaint, if not denied specifically or stated to be not admitted in the written statement, shall be taken to be admitted

 In the Matter of Balraj Taneja v. Sunil Madan (1999) 8 SCC 396 at page 404

Honorable Supreme Court of India has held that every allegation / averment of fact in the plaint, if not denied specifically or by necessary implication or stated to be not admitted in the written statement, shall be taken to be admitted in accordance to the Order 8 Rule of the Code of Civil Procedure 1908. The denial of the statement of the fact has to be Specific and not Evasive else it will be considered as deemed admitted in the eyes of the law. 

Supreme Court of India - The nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent.

 In the matter of LAUREATE BUILDWELL PVT. LTD. V/s CHARANJEET SINGH CIVIL APPEAL NO. 7042 of 2019 decided on July 22, 2021 before THE SUPREME COURT OF INDIA

Fact of the Case

• Ms. Madhabi Venkatraman (hereafter “the original allottee”) applied on 29.08.2012 for allotment of a residential flat (No. 7013,(hereafter “the flat”) admeasuring 4545 sq. ft., in Nectarine Tower "PARX LAUREATE" at Sector- 108, Expressway, Noida.

• On 16.10.2012, an allotment letter was issued to the original allottee

• According to the allotment letter, the possession of the flat was to be handed over within 36 months (from the date of allotment letter) i.e., latest by 15.10.2015.

• The original allottee made payment to the tune of ₹1,55,89,329/

• after noticing the slow pace of construction, the original allottee decided to sell the flat

• The purchaser and now complainant alleged that possession was not delivered in October, 2015 as  promised (in the allotment letter).

• The Complainant claims to have visited the builder’s office in last week of January, 2017 and was informed that possession of the said flat could not be delivered till the end of year 2017

• After this, the purchaser sought for refund of the amount paid, from the builder. On 08.03.2017, a legal notice was issued to the builder asking for refund of the amount of ₹1,93,70,883/- with interest

• The builder, Laureate denied the claim

• . It is in these circumstances, that the appellant approached the NCDRC, for direction to the builder to refund the entire sum of ₹1,93,70,883/- with interest at the rate of 24% from the respective dates when the instalments were paid to Laureate. In addition, ₹ 5,00,000/- as compensation and ₹ 2,00,000/- as litigation expenses were sought along with other costs.

• The NCDRC directed the Developer to refund the amount deposited with the developer in respect of subject flat No. 7013 with interest @ 10% p.a

Arguments of the Builder 

• Learned senior counsel submits that since the complainant was not the original allottee but a subsequent purchaser, he could not claim any interest. He relied upon two rulings of this Court in HUDA v. Raje Ram and the recent judgment of this Court in Wing Commander Arifur Rahman Khan and Anr. v. DLF Southern Homes Pvt. Ltd.

• It is submitted that in both these cases, this Court had categorically ruled that when the allottee in a housing project transfers his or her rights in favor of another, such a third party cannot claim equities to the same extent as the original allottee, especially as regards a claim for interest

Analysis and Conclusions:

• this court is of the opinion that the per se bar to the relief of interest on refund, enunciated by the decision in Raje Ram (supra) which was applied in Wg. Commander Arifur Rehman (supra) cannot be considered good law. 

• The nature and extent of relief, to which a subsequent purchaser can be entitled to, would be fact dependent.

• It would no doubt be fair to assume that the purchaser had knowledge of the delay. However, to attribute knowledge that such delay would continue indefinitely, based on an a priori assumption, would not be justified.

• the interests of justice demand that interest at least from that date ( Subsequent allottee purchasing the unit" should be granted, in favor of the respondent.

Punjab RERA - Long unexplained delay in pursuing the matter would obviously be hit by the bar of limitation.

 In the Matter of Indra Duggal V/s Chandigarh Overseas Pvt ltd. Case no. 1769 of 2020 decided on 07.07.2021 Before The Real Estate Regulatory Authority, Punjab

Fact of the Case 

• Unit was allotted on 26.09.2014
• Date of Builder buyer agreement was on 26.09.2014
• Entire payment has also been received by the Respondent.
• Date of Possession was 30.06.2016
• Possession has not been provided

It was held by the Authority That 

• There has been a complete inaction on the part of complainant for a period of nearly 6 years till the present complaint is filed on Aug 2020.
• Such a long unexplained delay in pursuing the matter would obviously be hit by the bar of limitation.
• The Entry at Serial no. 113 of the schedule of the limitation act,1963 provides that the limitation for any proceedings for which no separate period of limitation is provided would be 3 years from the time the right to sue accrues.
• The complaint is being dismissed as being barred by limitation.

The expression "title" conveys different forms of right to a property, which can include a right to possess such property

 In the Matter of Nagen Hazarika (Deceased) ... vs Smt. Manorama Sharma AIR 2007 Gau 62 it was held by the Gauhati High court that "Title" is a broad expression in law, which need not always be understood as akin to ownership. The expression "title" conveys different forms of right to a property, which can include a right to possess such property….”

Supreme Court - The entries in jamabandi are not proof of title

 In Corporation of the City of Bangalore v. M. Papaiah and another (1989) 3 SCC 612 it was held that

 “it is firmly established that revenue records are not documents of title, and the question of interpretation of document not being a document of title is not a question of law.” 

In Guru Amarjit Singh v. Rattan Chand and others (1993) 4 SCC 349 The Supreme Court has held that 

“that the entries in jamabandi are not proof of title”. 

In State of Himachal Pradesh v. Keshav Ram and others (1996), 11 SCC 257 this Court held that 

“The entries in the revenue papers, by no stretch of imagination can form the basis for the declaration of title in favour of the plaintiff.”

The commercial advertisement cannot have the same decree of constitutional protection as in case of social or political speeches.”

 The Apex Court in Hamdard Dawakhana (WAKF) Lal Kuan, Delhi v Union of India 1960 AIR 554, 1960 SCR (2) 671 held that an advertisement is no doubt a form of speech but its true character is reflected by the object for the promotion of which it is employed. In this judgment, the court primarily relied on the judgment of the United States Supreme Court in Valentine v Chrestensen for the proposition that "purely commercial advertising" is not protected by Article 19(1) (a) of the Constitution.

In the Matter of Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal reported in (1995) 5 SCC 161 The Supreme Court held that “commercial advertisement no doubt is a form of speech but its true character is reflected by the object for promotion of which it is employed. Only when an advertisement is concerned with the expression or prorogation of ideas that it can be said to be related to freedom of expression and speech. The object and purpose for which advertisement is published is the determining factor. When propagation of ideas and thoughts is inconsequential, but the real purpose and object is the promotion of sales of goods and services and personal benefit without any social purpose, the commercial advertisement cannot have the same decree of constitutional protection as in case of social or political speeches.”

In the Matter of Real Estate Authority, Punjab on its own motion Vs. Singla Builders and Promoters limited, 6 0f 2018 Decided on 08.02.2018 the Authority Penalised the promoter for Rs. 10,000/- for not displaying the registration number in the advertisements.

In the suo moto Matter of Maharashtra Real Estate Regulatory Authority Vs. Sai Estate Consultant Chembur (P) Ltd.(Case No. 1 of 2017) the MahaRERA Authority directed the respondent who is  a registered Real Estate Agent, to withhold the advertisements with immediate effect and rectify all the hoardings by putting MahaRERA registration number on the same. The respondent was directed to  pay a fine Rs.10000/- per day of the violation and accordingly for a violation of 12 days he was directed to pay Rs.120000/-

As per Gujarat Real Estate Regulatory Authority Circular number GujRERA/ Circular/18/2020 of date 04.01.2020 , “The font size of RERA registration number and website address in the advertisements should be mandatorily equal to or larger than the contact details of the proposed project.”  

As per the  Karnataka Rera Circular “The length and breadth of the “RERA REGISTERED'' information must not be less than 10% of the length and breadth (whichever is higher ) of the advertisement issued in print media”

In the Matter of Chandra Shekhar singh Vs. Kul Developers (P) Ltd. Complaint no. AT00500000000004, The Maharashtra appellate tribunal held that when the developer has made a promise of providing 30 Feet road through its brochure and advertisement,though it was the obligation of Municipal corporation,it would become the responsibility of the promoter to provide that.