NCLAT New Delhi- Association of the home-buyers of Real Estate Project is aggrieved person within the meaning of Section 61 of the Code.

 IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Principal Bench, New Delhi

Real Estate Regulatory Authority

v.

D.B. Corp Ltd. & Anr.

Company Appeal (AT) (Insolvency) No. 1172-1173 of 2022 with 1321 of 2022

Decided on 08-Dec-23

Brief about the decision:

Facts of the case

• Corporate Debtor entered into Barter Agreement with Operational Creditor for extensive advertising campaign of its projects. Pursuant to the Agreement, the Operational Creditor was to publish Advertisement for consideration which included cash component and Barter Component. The Cash Component against the advertising was to the paid and the Barter Component was to be utilized in form of allotment of units which were required to be transferred in favour of the Operational Creditor.
• The RERA received various complaints from allottees of the Corporate Debtor, which complaints were entertained and various orders related to different projects were passed in the year 2020-21 directing the Corporate Debtor to refund the amount along with compensation to various complainants. RERA also passed an order on 18.08.2021 under Section 35 of the RERA Act, 2016 to investigate about the diversion of funds from the designated account.
• Orders were also passed on 23.03.2022 by RERA revoking the registration of real estate project ‘Aakriti Business Arcade’ and directing for appointment of an agency for completion of the said project under Section 8 of the RERA Act, 2016.
• An application under Section 9 was filed by the Operational Creditor before the Adjudicating Authority on 02.02.2022 claiming default of operational debt of Rs.10,77,17,000/- with interest consequent to the Barter Agreement entered between the Operational Creditor and the Corporate Debtor and same has been admitted by Adjudicating Authority (NCLT), Indore Bench, Court No.1.
• Appellants herein Regulatory Authority(RERA) constituted under Section 20 of the RERA Act, 2016, Interim Resolution Professional and Aquacity Consumer and Societies Welfare Society’ which claim to be association of 74 homebuyers have challenged the CIRP admission order under Sec. 9 of IBC of NCLT.
• The Appellant, Aquacity Consumer and Societies Welfare Society claiming to be a society of homebuyers claimed to have filed two consumer complaints under Section 12(1)(b) of the Consumer Protection Act, 1986 for its members/homebuyers. The NCDRC allowed both the Consumer Complaints and directed the Corporate Debtor to refund the amount collected from the homebuyers along with interest of 9% pa from the date of possession. Civil Appeals were filed before the Hon’ble Supreme Court by the Appellant Association for modification of the order of NCDRC to the extent that the interest should be from the date of payment and not from the date of possession. In the Appeals notices were issued.

Decision of the Appellate Tribunal

A. Question No. I: Whether RERA has locus to challenge CIRP admission order before NCLAT?

• Section 61 of the Code, 2016 provides for an Appeal by “any person aggrieved by the Order of the Adjudicating Authority”. Section 61, sub- Section (1) uses the expression “any person aggrieved”.(p12)
• RERA is a statutory authority under Section 20 sub-section (2). RERA is a body corporate and is entitled to sue or to be sued in its name. RERA is thus fully competent to sue in its name. Question of locus to file an Appeal as an aggrieved person and the question as to whether appeal filed by the aggrieved person is to succeed, are two different questions and the question of locus is not dependent on success of the grounds in the Appeal.(p18)
• In the present case the RERA has taken various actions against the Corporate Debtor and various orders passed by RERA were to be complied by the Corporate Debtor and it was only due to continuation of CIRP against the Corporate Debtor that RERA could not have proceeded further to initiate compliance of its order.(p23)
• NCLAT in paragraph 6 of the judgment in IBBI v. GTL Infrastructure & Ors. (2023) ibclaw.in 110 NCLAT took the view that IBBI has nothing to do with the litigation between two parties i.e. Financial Creditor and Corporate Debtor whereas in the present case the RERA who had already issued various orders against the Corporate Debtor has to do with the corporate debtor and was directly involved with the enforcement of the RERA Act qua the Corporate Debtor hence the judgment in the case of IBBI (supra) is clearly distinguishable.(p23)
• In view of the sequence and events of the facts which took place and various proceedings drawn by RERA much prior to issuance of notice under Section 8 of the Code by the Operational Creditor, we are satisfied that Appeal filed by the RERA cannot be thrown out on the ground of locus. The RERA held to be aggrieved person within the meaning of Section 61 of the Code.(p25)
• Thus, the Question No. I has to be answered in affirmative holding that RERA has locus to file Company Appeal (AT) Ins. No. 1172-1173 of 2022.(p26)

B. Question No. II Whether Aquacity Consumer and Societies Welfare Society has locus to file Appeal within the meaning of Section 61 of the Code?

• Appellant being association of the home-buyers of Real Estate Project who has already initiated proceedings for direction of the interest of the home-buyers is aggrieved person within the meaning of Section 61 of the Code and the Appeal filed by the Appellant cannot be dismissed on the ground of locus.(p27)
• NCLAT answers Question No. II in affirmative holding that Aquacity Consumer and Social Welfare Society has a locus to file an Appeal under Section 61 of the Code against the Order dated 05th August, 2022.(p28)

C. Question No. III Whether Barter Transaction falls under definition of Operational Debt under IBC?

• There are nine Barter Agreements between the parties beginning from 29.09.2010 and last being 13.08.2019. Barter Agreement is entered between DB Corporation Ltd. and AG8 Ventures Ltd. which is executed on stamp duty of Rs. 1000.(p32)
• From the definition of claim under Section 3(6) of IBC it is clear that both sub-clause ‘(a)’ and ‘(b)’ refers to “a right to payment”. The claim must subsist for a debt being debt to become operational debt must relate to a right to payment unless operational creditor has a claim i.e. a right to payment against the corporate debtor, no operational debt can arise to enable Operational Creditor to initiate proceeding under Section 9 of the Code.(p41)
• The claim of Section 8 and Section 9 also indicates that proceedings under Section 9 by Operational Creditor can be initiated for payment of unpaid operational debt. Section 8(1) uses expression “demanding payment of the amount involved in the default” whereas Section 8(2)(b) uses the expression “the payment of unpaid operational debt” thus non-payment of operational debt is sine qua non for giving any demand notice under Section 8 of the Code leading to Section 9 also makes it clear that after the expiry of period of 10 days from the date of delivery of notice, sub-section 1 of Section 8 of the Code states if the Operational Creditor does not receive payment from the Corporate Debtor, operational Creditor may file an application for initiating a CIRP, thus not receiving the payment from the Corporate Debtor is a condition precedent for initiating Section 9 Application.(p41)
• Hon’ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. NBCC (India) Ltd. & Ors. (2021) ibclaw.in 63 SC held that expression payment only refers to the payment of money and not anything of its equivalent in nature of Barter; when construing the same expression of payment in Section 30(2), the Hon’ble Supreme Court has held that payment refers only to payment of money and not anything of its equivalent in the nature of Barter, the same interpretation has to be put to Section 8 and 9 also of the Code.(p47)
• There was no operational debt due on the corporate debtor on which operational creditor can claim payment of money from the corporate debtor to enable it to issue a demand notice under Section 8 or to file Section 9 Application before the Adjudicating Authority. Entire initiation of proceedings under Section 9 by the Operational Creditor is contrary to the scheme of IBC and no payment of money was due on the corporate debtor on basis of which unpaid dues any proceedings under Section 9 can be initiated.(p49)
• On the basis of Barter Agreement and consequent invoices, non-discharge of Barter Component by the Corporate Debtor shall not lead to any operational debt on basis of which payment of money can be demanded by the Operational Creditor from the Corporate Debtor. No operational debt was owed to the Operational Creditor in the facts of the present case hence initiation of proceedings under Section 9 by the Operational Creditor was contrary to the provisions of the IBC.(p50)

D. Question No. IV & V

• While considering Question No III it has already been held that there was no Operational Debt due on the Corporate Debtor and the proceedings initiated by the Operational Creditor being wholly outside Section 8 and 9 of the Code, no necessity to enter into Question No. IV & V for the purpose of the present case.(p51)

E. Conclusion

NCLAT concludes that:

• Application filed under Section 9 by the Operational Creditor alleging Operational Debt was non-maintainable since there was no operational debt on basis of which payment of money could have been demanded by the Operational Creditor from the Corporate Debtor on account of non-discharge of Barter Component by the Corporate Debtor. At best, the Applicant was entitled for claiming allotment of units as per the Barter Agreement between the parties for which it was open for the Operational Creditor to take such remedy as permissible.(p52)
• However, Section 9 Application was clearly not maintainable, the Adjudicating Authority committed error in admitting Section 9 Application without adverting to the real nature of the transaction between the parties, which is the very basis of the Section 9 Application, the Order of the Adjudicating Authority just is unsustainable.(p52)
• In result, we allow both the appeals, set aside the Order dated 05th August, 2022 admitting Section 9 Application. Both the Appeals having been allowed, no orders are necessary in different IAs, as noted above. The IAs are disposed of. Parties shall bear their own costs.(p53)

Source :- https://ibclaw.in/real-estate-regulatory-authority-v-d-b-corp-ltd-anr-nclat-new-delhi/

NCLAT New Delhi- RERA Authority also has locus to challenge in appeal against CIRP initiation Order under Sec. 61 of IBC before NCLAT.

 IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Principal Bench, New Delhi

Real Estate Regulatory Authority

v.

D.B. Corp Ltd. & Anr.

Company Appeal (AT) (Insolvency) No. 1172-1173 of 2022 with 1321 of 2022

Decided on 08-Dec-23

Brief about the decision:

Facts of the case

• Corporate Debtor entered into Barter Agreement with Operational Creditor for extensive advertising campaign of its projects. Pursuant to the Agreement, the Operational Creditor was to publish Advertisement for consideration which included cash component and Barter Component. The Cash Component against the advertising was to the paid and the Barter Component was to be utilized in form of allotment of units which were required to be transferred in favour of the Operational Creditor.
• The RERA received various complaints from allottees of the Corporate Debtor, which complaints were entertained and various orders related to different projects were passed in the year 2020-21 directing the Corporate Debtor to refund the amount along with compensation to various complainants. RERA also passed an order on 18.08.2021 under Section 35 of the RERA Act, 2016 to investigate about the diversion of funds from the designated account.
• Orders were also passed on 23.03.2022 by RERA revoking the registration of real estate project ‘Aakriti Business Arcade’ and directing for appointment of an agency for completion of the said project under Section 8 of the RERA Act, 2016.
• An application under Section 9 was filed by the Operational Creditor before the Adjudicating Authority on 02.02.2022 claiming default of operational debt of Rs.10,77,17,000/- with interest consequent to the Barter Agreement entered between the Operational Creditor and the Corporate Debtor and same has been admitted by Adjudicating Authority (NCLT), Indore Bench, Court No.1.
• Appellants herein Regulatory Authority(RERA) constituted under Section 20 of the RERA Act, 2016, Interim Resolution Professional and Aquacity Consumer and Societies Welfare Society’ which claim to be association of 74 homebuyers have challenged the CIRP admission order under Sec. 9 of IBC of NCLT.
• The Appellant, Aquacity Consumer and Societies Welfare Society claiming to be a society of homebuyers claimed to have filed two consumer complaints under Section 12(1)(b) of the Consumer Protection Act, 1986 for its members/homebuyers. The NCDRC allowed both the Consumer Complaints and directed the Corporate Debtor to refund the amount collected from the homebuyers along with interest of 9% pa from the date of possession. Civil Appeals were filed before the Hon’ble Supreme Court by the Appellant Association for modification of the order of NCDRC to the extent that the interest should be from the date of payment and not from the date of possession. In the Appeals notices were issued.

Decision of the Appellate Tribunal

A. Question No. I: Whether RERA has locus to challenge CIRP admission order before NCLAT?

• Section 61 of the Code, 2016 provides for an Appeal by “any person aggrieved by the Order of the Adjudicating Authority”. Section 61, sub- Section (1) uses the expression “any person aggrieved”.(p12)
• RERA is a statutory authority under Section 20 sub-section (2). RERA is a body corporate and is entitled to sue or to be sued in its name. RERA is thus fully competent to sue in its name. Question of locus to file an Appeal as an aggrieved person and the question as to whether appeal filed by the aggrieved person is to succeed, are two different questions and the question of locus is not dependent on success of the grounds in the Appeal.(p18)
• In the present case the RERA has taken various actions against the Corporate Debtor and various orders passed by RERA were to be complied by the Corporate Debtor and it was only due to continuation of CIRP against the Corporate Debtor that RERA could not have proceeded further to initiate compliance of its order.(p23)
• NCLAT in paragraph 6 of the judgment in IBBI v. GTL Infrastructure & Ors. (2023) ibclaw.in 110 NCLAT took the view that IBBI has nothing to do with the litigation between two parties i.e. Financial Creditor and Corporate Debtor whereas in the present case the RERA who had already issued various orders against the Corporate Debtor has to do with the corporate debtor and was directly involved with the enforcement of the RERA Act qua the Corporate Debtor hence the judgment in the case of IBBI (supra) is clearly distinguishable.(p23)
• In view of the sequence and events of the facts which took place and various proceedings drawn by RERA much prior to issuance of notice under Section 8 of the Code by the Operational Creditor, we are satisfied that Appeal filed by the RERA cannot be thrown out on the ground of locus. The RERA held to be aggrieved person within the meaning of Section 61 of the Code.(p25)
• Thus, the Question No. I has to be answered in affirmative holding that RERA has locus to file Company Appeal (AT) Ins. No. 1172-1173 of 2022.(p26)

B. Question No. II Whether Aquacity Consumer and Societies Welfare Society has locus to file Appeal within the meaning of Section 61 of the Code?

• Appellant being association of the home-buyers of Real Estate Project who has already initiated proceedings for direction of the interest of the home-buyers is aggrieved person within the meaning of Section 61 of the Code and the Appeal filed by the Appellant cannot be dismissed on the ground of locus.(p27)
• NCLAT answers Question No. II in affirmative holding that Aquacity Consumer and Social Welfare Society has a locus to file an Appeal under Section 61 of the Code against the Order dated 05th August, 2022.(p28)

C. Question No. III Whether Barter Transaction falls under definition of Operational Debt under IBC?

• There are nine Barter Agreements between the parties beginning from 29.09.2010 and last being 13.08.2019. Barter Agreement is entered between DB Corporation Ltd. and AG8 Ventures Ltd. which is executed on stamp duty of Rs. 1000.(p32)
• From the definition of claim under Section 3(6) of IBC it is clear that both sub-clause ‘(a)’ and ‘(b)’ refers to “a right to payment”. The claim must subsist for a debt being debt to become operational debt must relate to a right to payment unless operational creditor has a claim i.e. a right to payment against the corporate debtor, no operational debt can arise to enable Operational Creditor to initiate proceeding under Section 9 of the Code.(p41)
• The claim of Section 8 and Section 9 also indicates that proceedings under Section 9 by Operational Creditor can be initiated for payment of unpaid operational debt. Section 8(1) uses expression “demanding payment of the amount involved in the default” whereas Section 8(2)(b) uses the expression “the payment of unpaid operational debt” thus non-payment of operational debt is sine qua non for giving any demand notice under Section 8 of the Code leading to Section 9 also makes it clear that after the expiry of period of 10 days from the date of delivery of notice, sub-section 1 of Section 8 of the Code states if the Operational Creditor does not receive payment from the Corporate Debtor, operational Creditor may file an application for initiating a CIRP, thus not receiving the payment from the Corporate Debtor is a condition precedent for initiating Section 9 Application.(p41)
• Hon’ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. NBCC (India) Ltd. & Ors. (2021) ibclaw.in 63 SC held that expression payment only refers to the payment of money and not anything of its equivalent in nature of Barter; when construing the same expression of payment in Section 30(2), the Hon’ble Supreme Court has held that payment refers only to payment of money and not anything of its equivalent in the nature of Barter, the same interpretation has to be put to Section 8 and 9 also of the Code.(p47)
• There was no operational debt due on the corporate debtor on which operational creditor can claim payment of money from the corporate debtor to enable it to issue a demand notice under Section 8 or to file Section 9 Application before the Adjudicating Authority. Entire initiation of proceedings under Section 9 by the Operational Creditor is contrary to the scheme of IBC and no payment of money was due on the corporate debtor on basis of which unpaid dues any proceedings under Section 9 can be initiated.(p49)
• On the basis of Barter Agreement and consequent invoices, non-discharge of Barter Component by the Corporate Debtor shall not lead to any operational debt on basis of which payment of money can be demanded by the Operational Creditor from the Corporate Debtor. No operational debt was owed to the Operational Creditor in the facts of the present case hence initiation of proceedings under Section 9 by the Operational Creditor was contrary to the provisions of the IBC.(p50)

D. Question No. IV & V

• While considering Question No III it has already been held that there was no Operational Debt due on the Corporate Debtor and the proceedings initiated by the Operational Creditor being wholly outside Section 8 and 9 of the Code, no necessity to enter into Question No. IV & V for the purpose of the present case.(p51)

E. Conclusion

NCLAT concludes that:

• Application filed under Section 9 by the Operational Creditor alleging Operational Debt was non-maintainable since there was no operational debt on basis of which payment of money could have been demanded by the Operational Creditor from the Corporate Debtor on account of non-discharge of Barter Component by the Corporate Debtor. At best, the Applicant was entitled for claiming allotment of units as per the Barter Agreement between the parties for which it was open for the Operational Creditor to take such remedy as permissible.(p52)
• However, Section 9 Application was clearly not maintainable, the Adjudicating Authority committed error in admitting Section 9 Application without adverting to the real nature of the transaction between the parties, which is the very basis of the Section 9 Application, the Order of the Adjudicating Authority just is unsustainable.(p52)
• In result, we allow both the appeals, set aside the Order dated 05th August, 2022 admitting Section 9 Application. Both the Appeals having been allowed, no orders are necessary in different IAs, as noted above. The IAs are disposed of. Parties shall bear their own costs.(p53)

Source :- https://ibclaw.in/real-estate-regulatory-authority-v-d-b-corp-ltd-anr-nclat-new-delhi/

Supreme Court - Home buyers who had availed remedies under RERA, can not be treated as unsecured creditors in IBC.

 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3806 OF 2023

VISHAL CHELANI & ORS. .....Appellant(s)

Vs.

DEBASHIS NANDA .....Respondent(s)

Date of Decision :-October 06, 2023

FACTS OF THE CASE:-

1.  The appellants are home buyers, who had opted for allotment in a real estate project of  Buland Buildtech Pvt. Ltd.
2. Aggrieved by the delay in the completion of the project, the appellants approached the UPRERA which by its orders upheld this entitlement to refund amounts deposited by the, together with interest.
3. In the meantime, by the Order dated 28.02.2023 by NCLAT, in C.A.(AT) No. 991/2022 proceedings under the Insolvency and Bankruptcy Code, 2016 were initiated.
4. A resolution plan was presented to the adjudicating authority. In that plan, a distinction was made between home buyers, who had opted or elected for other remedies such as i.e. applying before the RERA and having secured orders in their favor, and those who did not do so.
5. Home buyers who did not approach authorities under RERA Act were given the benefit of 50% better terms than that given to those who approached RERA or who were decree holders.
6. The appellants felt aggrieved as their applications were rejected by the NCLT and their appeals in NCLAT too was unsuccessful. Consequently, they approached the Supreme Court.  

Contentions of appellants

1. with regard to the definition of financial debt [Section 5(8)(f)] which was amended in 2018 after which home buyer allottees in real estate projects also fell within the broad description of financial creditors, so A distinction cannot be made between one set of such home buyer allottees and another.

Contentions of defendants

1. the appellants cannot be permitted to secure two benefits. Having approached the UPRERA, they fell into a different sub-class of home buyers, who were entitled to specified amounts and, therefore, were unsecured creditors, as compared with allottees who had not invoked RERA remedies. It is submitted that such home buyers relinquished their rights under Section 18 of the RERA Act.

QUESTION OF LAW

1. The main issue before the Court was whether such a classification, differentiating between home buyers who sought relief under RERA and those who did not, could be upheld. In essence, the question was whether RERA-allotted financial claims should be treated differently from those not claiming relief under RERA in insolvency proceedings.

COURT'S FINDINGS

1. The Court is unpersuaded by the submission of the Resolution Professional’s view that once an allottee seeks remedies under RERA, and opts for return of money in terms of the order made in her favour, it is not open for her to be treated in the class of home buyer.
2. To treat a particular segment of that class differently for the purposes of another enactment, on the ground that one or some of them had elected to take back the deposits together with such interest as ordered by the competent authority, would be highly inequitable.
3. Section 238 of the IBC contains a non obstante clause which gives overriding effect to its provisions. Consequently its provisions acquire primacy, and cannot be read as subordinate to the RERA Act.
4. In view of the foregoing reasons,  appeal was allowed in the above terms and the impugned order is hereby set aside; the appellants are declared as financial creditors within the meaning of Section 5(8)(f) (Explanation) and entitled to be treated as such along with other home buyers/financial creditors for the purposes of the resolution plan.

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. 

Karnataka High Court - RERA has no Authority Over Projects Granted ‘Partial’ Occupancy Certificate Prior to Enforcement of RERA

RERA has no Authority Over Projects Granted ‘Partial’ Occupancy Certificate Prior to Enforcement of RERA

Provident Housing Limited Vs Karnataka Real Estate Regulatory Authority Writ Petition No.18448 of 2021

Date of Judgement/Order : 02/01/2023

Brief Facts of the Case:

• The petitioner is engaged in the business of real estate development. 
• On receiving respondent’s request to allot an apartment in the project, the petitioner entered into an agreement for sale and Construction with Respondent on 10/09/14. 
• The proposed date of completion of project was 31/01/17. 
• On 18/11/15– A partial occupancy certificate was granted by the competent authority i.e. BDA to the petitioner. 
• On 27/04/17– Second partial occupancy certificate was issued in favour of petitioner. 
• On 14/05/17– Respondent seeks to cancel the agreement on the ground that there was information to him that the land had not been legally acquired by the petitioner for construction of the Apartment complex. 
• On 04/12/17– The contract between petitioner and respondent is concluded, petitioner refunds the amount after deducting the cancellation charges.
• In 2019– Respondent by invoking Section 31 of the RERA Act, files a complaint before RERA Authority seeking a refund of remaining amount. 
• The authority passes the impugned order, directing the petitioner to refund the said amount. 
• On receiving the authority’s order, Petitioner files a petition before Karnataka HC challenging the maintainability of the complaint filed by respondent before the authority.

Petitioner’s Contentions:

• The partial occupancy certificate was issued in favor of petitioner before the commencement of the Act.  
• Therefore, the project of petitioner had already passed the stage of ‘ongoing project’ and is a ‘completed project’. 
• Since the project was completed before the commencement of the RERA Act, the Act is not applicable to petitioner’s project and therefore any complaint filed before the authority by invoking the provisions of the Act is not maintainable.

Respondent’s Arguments:

• The project is still an ‘ongoing project’ as no ‘competition certificate’ was issued in favour of petitioner.

Issues:

• Whether the complaint filed by respondent before the Karnataka Real Estate Authority is maintainable? 
• Whether ‘on-going’ project includes the project for which completion certificate has not been issued.

Court’s Decision: 

• The court while taking into consideration the provisions of RERA Act (Section 2(q), 3, 18, 31, 43 and 84) and the rules made by Karnataka Government (Rule 3 and 4) under Section 84 of the Act, made following observations- 
• Section 3 of the Act mandates the registration for all ongoing projects at the time of commencement of the Act.  
• Section 3(2)(b) specifically excludes those projects to be registered under the act for which ‘completion certificate’ has been issued before the commencement of the Act. 
• In the present case, partial occupancy certificates have been issued, the project would be considered to be not completed at the time of commencement of this Act. 
• The explanation of ‘ongoing project’ under the Karnataka Government Rules (Rule 4) exempts the application of the Act to those projects for which partial occupancy certificate has been issued prior to coming into force of the Act. 
• Therefore as per Rule 4 of the Karnataka Government Rules, the project is not an ongoing project as the explanation in Rule exempts such an ongoing project for which partial certificate has been obtained to the extent of the portion for which the partial occupancy certificate is obtained.
• Therefore, the provisions of the RERA Act are not applicable to the project and the order issued by the Authority is without jurisdiction and thus is not maintainable. 

• Held: The order passed by Karnataka Real Estate Regulatory Authority is without jurisdiction. The project in question is a registered project in view of grant of partial occupancy certificates. In light of the same, the complaint filed before the authority by the respondent, itself is not maintainable.

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 

Whether a Home Buyer individually oppose to Resolution Plan when the Home Buyers as a class has voted by a majority in favour of the Plan – Jyotsna Kailash Veera Vs. Mr. Manish Motilal Jaju – NCLT Mumbai Bench ONJULY 21, 2023

 Whether a Home Buyer individually oppose to Resolution Plan when the Home Buyers as a class has voted by a majority in favour of the Plan – Jyotsna Kailash Veera Vs. Mr. Manish Motilal Jaju – NCLT Mumbai Bench

ONJULY 21, 2023

The Adjudicating Authority held that in the light of what has been held by the Hon’ble Supreme Court in the Jaypee Kensington Boulevard Apartments Vs. NBCC (India) Limited and others (2021) ibclaw.in 63 SC it becomes abundantly clear that Home Buyers can vote for or against the Plan only as a class and if there are some Home Buyers pitted against the Resolution Plan, who are otherwise in minority, absolutely no locus to oppose the Plan in the capacity of dissatisfied Home Buyers. It is also abundantly clear that such dissenting minority segment within the class of Home Buyers cannot arrogate themselves to be dissenting Financial Creditors. That being the legal position, which is explained in unequivocal terms by the Hon’ble Supreme Court in Jaypee Kensingtons case, in our considered view, any objection raised by the socalled minority Home Buyers raising objection against the Plan, which have been approved by them as a class, cannot be entertained and are liable to be rejected at the very threshold without going through the merit of such objections

Supreme Court in the said decision upheld the delegation of power to decide the complaints by single members in terms of Section 81 of the Act.

 The decision of Allahabad High Court in the case of M/s Newtech Promoters and Developers Pvt. Ltd. (supra) was challenged before the Supreme Court in the case of M/s Newtech Promoters and Developers Pvt. Ltd. Vs. State of UP and Ors. (Civil Appeal No(s).6745-6749/2021) decided on 11.11.2021.. Several questions were raised and answered. One of the questions was whether Section 81 of the Act authorizes the authority to delegate its power to single member to hear complaints instituted under Section 31. After referring to the statutory provisions and relying upon several decisions of the Supreme Court, the Supreme Court in the said decision upheld the delegation of power to decide the complaints by single members in terms of Section 81 of the Act.

The conclusion of the Supreme Court in this respect can be noted as under:-

“120. In view of the remedial mechanism

provided under the scheme of the Act 2016, in our considered view, the power of delegation under Section 81 of the Act by the authority to one of its member for deciding applications/complaints under Section 31 of the Act is not only well defined but expressly permissible and that cannot be said to be dehors

the mandate of law.”

RERA has the jurisdiction to entertain a complaint filed by an aggrieved person against the bank as a secured creditor

 In the matter of Union Bank of India, Jaipur vs. Rajasthan Real Estate Regulatory Authority & Ors., D.B. Civil Writ Petition No. 13688/2021 & 69 other connected Writ Petitions A divisional bench of the Rajasthan High Court  held that the RERA has the jurisdiction to entertain a complaint filed by an aggrieved person against the bank as a secured creditor. In this behalf, the Rajasthan HC observed that lenders such as banks who have entered into securitized transactions have the power in case of default under the SARFAESI Act to enforce their security interest through various measures such as taking possession of the secured assets, taking over management of the business of the borrower, etc. It was held that oncethe bank takes such actions for enforcing their security interest in terms of Section 13(4) of the SARFAESI Act, the secured creditor for all purposes enters into the shoes of the borrower/promoter as there is an assignment of statutory rights in favour of the lender.

The Rajasthan HC held that the RERA Act would have no retrospective application to transactions completed between the borrower (developer in such cases) and the lender (banks/financial institutions) wherein security interest has been created prior to the RERA Act. The RERA Act can have retrospective application only when the creation of security interest was made fraudulently or in collusion with the bank/financial institutions.

The Rajasthan HC observed that both the RERA Act and the SARFAESI Act are special laws. Whilst relying on the order of Bikram Chatterji and Ors. Vs. Union of India 2019 19 SCC 161, the Rajasthan HC concluded that in case of a conflict between two special laws, the special law that was enacted later would prevail. Since,the RERA Act was enacted subsequent to the SARFAESI Act, the provisions of RERA Act would prevail over the provisions of SARFAESI Act.

THE SUPREME COURT OF INDIA in the matter of UNION BANK OF INDIA

VERSUS RAJASTHAN REAL ESTATE REGULATORY AUTHORITY & ORS. ETC. ETC. Petition for Special Leave to Appeal (C) Nos.1861-1871/2022; Dated 14-02-2022 has ratified the above order of the Rajasthan High Court.

the jurisdiction of the Appellate Tribunal stands confined to consideration of challenges raised against orders passed by either the Real Estate Regulatory Authority or the Adjudicating Authority under the RERA

 In the matter of PRAVEEN CHHABRA V/s REAL ESTATE APPELLATE TRIBUNAL W.P.(C) 14552/2021 Decided on 26.05.2022, THE HIGH COURT OF DELHI held that the Court quashed the suo motu proceedings initiated by the Appellate Tribunal (case titled (Suo Motu Case) REAT/0002/2021 titled as “Court of Its Own Motion Vs. Commissioners of all the Municipal Zones & Anrs ) to monitor construction activity in the National Capital Territory. The court held that under the Real Estate (Regulation and Development) Act, 2016 (RERA), the jurisdiction of the Appellate Tribunal stands confined to consideration of challenges raised against orders passed by either the Real Estate Regulatory Authority or the Adjudicating Authority under the RERA. The High Court also said that the Appellate Tribunal being a creation of statute, is not part of traditional judicial institutions. The High court also held that According to Sections 43 and 44 of the RERA Act, which provide for the establishment of tribunals and the definition of what disputes can be brought before such tribunals, the Appellate Tribunal was established as a forum whose jurisdiction could be invoked by a person aggrieved by an order, decision, or direction of the Authority.

The doctrine of election

 The doctrine of election was discussed in A.P. State Financial Corporation v. M/s. GAR Re-rolling Corporation, (1994) 2 SCC 647as follows: 

“15. The Doctrine of Election clearly suggests that when two remedies are available for the same relief, the party to whom the said remedies are available has the option to elect either of them but that doctrine would not apply to cases where the ambit and scope of the two remedies is essentially different. To hold otherwise may lead to injustice and inconsistent results…”

generalia specialibus non derogant

 The latin maxim ‘generalia specialibus non derogant’ governs the

Issue of Conflict between two statues. For statutory construction, it means that “for the purposes of interpretation of two statutes in apparent conflict, the provisions of a

general statute must yield to those of a special one.” This was explained by

the Supreme Court in Gobind Sugar Mills Ltd. v. State of Bihar, (1999) 7 SCC 76 as follows:

“… while determining the question whether a statute is a general or a special one, focus must be on the principal subject-matter coupled with a particular perspective with reference to the intendment of the Act. With this basic principle in mind, the provisions must be examined to find out whether it is possible to construe harmoniously the two provisions. If it is not possible then an effort will have to be made to ascertain whether the legislature had intended to accord a special treatment vis-à-vis the general entries and a further endeavour will have to be made to find out whether the specific provision excludes the applicability of the general ones. Once we come to the conclusion that intention of the legislation is to exclude the general provision then the rule "general provision should yield to special provision" is squarely attracted.”

Section 22 of the Limitation Act 1963 provides for the computation of limitation in the case of a continuing breach of contract or tort.

Supreme court of india in the matter of Balakrishna Savalram Pujari Waghmare v. Shree Dhyaneshwar Maharaj Sansthan AIR 1959 SC 798 held that Section 22 of the Limitation Act 1963 provides for the computation of limitation in the case of a continuing breach of contract or tort. It provides that in case of a continuing breach of contract, a fresh period of limitation begins to run at every moment of time during which the breach continues.