Supreme Court - the nomenclature of the document is not conclusive

 In the Matter of Namburi Basava Subramaniam vs. Alappatti Hymavathy & Others the Supreme Court, while laying down the test to determine the question whether a document is a settlement or will, held that the nomenclature of the document is not conclusive. The recitals in the document as a whole, the intention of the executant and the acknowledgment thereof by the parties are conclusive

When an objection has been taken by the other party that a document is insufficiently stamped, then, it is incumbent on part of Court to decide objection first and then to proceed further

 In M.Chinnappan V. M.Ranganathan and another, AIR 2005 Madras 105, it is held that 

'when an objection has been taken by the other party that a document is insufficiently stamped, then, it is incumbent on part of Court to decide objection first and then to proceed further

No Occupancy Certificate: Not The Only Criteria For Registration With RERA

 The Maharashtra Real Estate Regulatory Authority (MahaRERA) in its recent order has held that mere non-procurement of an occupancy certificate by a developer does not make the developer liable to register the real estate project1 under Section 3 of the Real Estate (Regulation and Development) Act, 2016 (Act).

This order has been passed following a complaint filed by Sulatana Dalal (Complainant) against Asia Group (Developer), before MahaRERA in relation to a project named as 'Miracle Mall' situated at Bhiwandi, Thane, Maharashtra. The Complainant's contention was that even though the building was completely occupied, the Developer had failed to obtain an occupation certificate and committed breach of law. Against this background, the Complainant sought directions from MahaRERA to register the building under the provisions of the Act. 

MahaRERA's Position On The Dispute

In the instant case, the Developer contended that all units of the concerned project were constructed after obtaining due permissions from the concerned authorities and all units in the building were sold to its customers prior to the commencement of the Act. Therefore, the concerned project was not required to be registered under the Act.

MahaRERA while adjudicating the dispute, looked at the pith and substance of the proviso to Section 3 of the Act. The proviso to Section 3 of the Act reads as follows:

"Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act."

From a bare reading of the proviso, the intention of the legislators appears to clearly include all projects whose construction is ongoing and which have not received a CC. In order to fall within the premise of the aforementioned proviso to Section 3 of the Act, a real estate project is required to satisfy both these conditions – i.e., construction is ongoing and the project has not received a CC.

In the present factual matrix, the project got completed in 2012-13 and the Developer had failed to procure a CC, thereby satisfying only one out of the two conditions for registering a project under the Act. Note that the State of Maharashtra does not have a framework for issuance of a CC by its own competent authority, so the present order uses the terms 'completion certificate' and 'occupancy certificate' interchangeably.

In the instant case, the MahaRERA held that mere non-procurement of an OC will not trigger a registration requirement under the Act and dismissed the complaint with the following observations:

There was no ongoing construction activity in the project, where the Complainant resides.

The building where the Complainant resides had been occupied prior to the commencement of the Act and hence no registration under the Act is required.

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.”

Doctrine of Res Judicata , Section-11 of the Code of Civil Procedure, 1908

Section 11 of the Civil Procedure Court incorporates the doctrine of res judicata also known as “ rule of conclusiveness of judgment”.

 Res means “subject matter” and judicata means “adjudged” or decided and together it means “a matter adjudged”.

In simpler words, 

• the thing has been judged by the court, the issue before a court has already been decided by another court and between the same parties. 
• Hence, the court will dismiss the case as it has been decided by another court. 
• Res judicata applies to both civil and criminal legal systems. 
• No suit which has been directly or indirectly tried in a former suit can be tried again.

The doctrine of res judicata says –

• That no person should be disputed twice for the same reason.
• It is the State that decides there should be an end to a litigation
• A judicial decision must be accepted as the correct decision.

In the historic case of Daryao v. State of Uttar Pradesh, the doctrine of res judicata is of universal application was established. The Supreme Court of India placed the doctrine of res judicata on a still broader foundation. 

In this case, 

• petitioners filed a writ petition in the High Court of Allahabad under Article 226 of the Constitution. 
• But the suit was dismissed. 
• Then they filed independent petitions in the Supreme Court under the writ jurisdiction of Article 32 of the Constitution. 
• The defendants raised an objection regarding the petition by asserting that the prior decision of the High Court would be operated as res judicata to a petition under Article 32. 
• The Supreme Court dismissed and disagreed with the petitions.
• The court held that the rule of res judicata applies to a petition under Article 32 of the Constitution. 
• If a petition is filed by the petitioner in the High Court under Article 226  of the Constitution and it is dismissed on the basis of merits, it would be operated as res judicata to bar a similar petition in the Supreme Court under Article 32 of the Constitution

Cancellation of allotment after taking 90% of the total sales consideration is unsustainable in the eyes of law

 In the Matter of Gautam Bhatla V/s Vatika limited Complaint no.1208 of 2019 decided on 17.02.2021 before Haryana Real Estate regulatory authority, Panchkula.

it was held that " The Authority is prima facia of the view that Cancellation of allotment after taking 90% of the total sales consideration and without remitting the amount payable to the allottees after deducting earnest money, is unsustainable in the eyes of law"

The developer can only ask for VAT and Labour charges and all other charges are against the policy of AHP, 2013

 In the Matter of Sandhya Gupta V/s Adore real tech limited Complaint no. 849 of 2020 decided on 09.02.2021 before Haryana Real Estate Regulatory Authority, Panchkula.

Fact of the Matter.

Complainant booked a unit of the project being built under the Haryana Affordable Housing Policy,2013

In the Policy the Cost of Flat is fixed at the rate of Rs. 4000/- Per Sqft Carpet area and Rs. 500/- Per sq ft for the Balcony area.

At the Time to Possession the Builder demanded additional amount of rs. 1,67,073/- under the various heads of VAT,Labour Charges, Electricity Meter charges, Common area backup charges,Electricity Connection charges, Operation and Maintenance cost, Reimbursement of Electrical Infrastructure cost etc.

Ruling.

The Court held that , the developer can only ask for VAT and Labour charges and all other charges are against the policy of AHP, 2013.

Supreme Court - an executing court cannot go behind a decree and re-examine the merits of the case of the parties

 in the matter of S. Bhaskaran vs. Sebastian (dead) by LRs in Civil Appeal No. 7800 of 2014 decided on 13.09.2019 before Supreme court of india.

The suit 

• Temple was administered by three brothers. 
• Vide a settlement deed these original owners endowed the property to the temple. 
• The deed also included a provision that the eldest son of the deceased trustee would become his successor. 
• A suit was filed on behalf of the temple by the Appellant in his capacity as trustee, seeking permanent injunction against Gnanambal and her husband, who were tenants in the suit properties at that time. 
• One Umapathymurthy was impleaded in this suit as a defendant who claimed that he was the eldest son of one of the original owners and that he had been dispossessed from the trusteeship of the temple by his younger brother.
• The Trial Court decreed the suit in favour of the Appellant holding that he was a trustee and rejected the claim of Umapathymurthy. 
• The said decree was affirmed by the first appellate court. 
• The decree holders subsequently filed an Execution Petition. 
• However, the judgment debtors (Respondents herein) filed an execution application under Section 47 of the CPC seeking dismissal of the execution petition on the basis that the original decree was vitiated by fraud as the heir certificate was falsely prepared. 
• The said application under Section 47 of CPC was dismissed by the executing court as non-maintainable on the ground that the judgment of the Trial Court had been confirmed by the First Appellate Court after considering all relevant evidence, and had therefore become final. 
• The said order of the executing court was challenged in revision before the High Court where the said order was reversed.

Held by Supreme Court

• The Supreme Court disagreed with the view of the High Court and reiterated that it is well-settled that an executing court cannot travel beyond the order or decree under execution. 
• In the present case, the Trial Court had already considered the evidence on record and given a finding that the Appellant was the trustee of the temple.
•  This judgment was confirmed by the First Appellate Court and no further appeal was preferred by the Respondents against it. 

Therefore, an affirmed decree could not be varied now at the stage of execution.

when there is a conflict between the provisions of the Act, Rules and Regulations framed thereunder, the Act will prevail.

 in the matter of National Stock Exchange Member vs. Union of India & Anr.125(2005) DLT 165.

The Delhi High court held that 

when there is a conflict between the provisions of the Act, Rules and Regulations framed thereunder, the Act will prevail. and if there is a conflict between the Act, Rules and Regulations on the one hand, and the circular on the other, the former will prevail and the latter becomes ultra vires

in the matter of M/s. Hiralal Ratanlal vs. STO, AIR 1973 SC 1034, the Apex Court observed:

"In construing a statutory provision the first and foremost rule of construction is the literaly construction. All that the Court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear."

The Hon‟ble Apex Court in case Prakash Nath Khanna vs. C.I.T. (2004)9 SCC 686 has laid down that the language implies in a statute is the determinative factor of the legislative intent.

Provisions of the special Act always override the provisions of the general law

 In the Matter of M/s Apex Buildwell Pvt. Ltd. V/s Sachin Kumar,Appeal No.240 of 2019 decided on 09.02.2021 before THE HARYANA REAL ESTATE APPELLATE TRIBUNAL it was held that

"We do not find any substance in the contentions raised by learned counsel for the appellant that in order to claim the compensation for delay in delivery of possession, the respondent /allottee was required to establish the loss suffered by him as provided in Section 74 of the Indian Contract Act, 1872. The provisions for grant of damage on account of the breach of contract provided in Section 74 of the Indian Contract Act are the general provisions. Whereas Section 18 of the Act is a special provision dealing with consequences on account of the failure of the promoter to complete the project by the date specified in the agreement for sale. The proviso to Section 18(1) of the Act categorically provides that where an allotee does not intend to withdraw from the project, he shall be paid by the promoter the interest for every month of delay till handing over of the possession at such rate as may be prescribed. Thus, the proviso to Section 18(1) of the Act stipulates that the allottee shall be entitled to interest at the prescribed rate for the delay in delivery of possession beyond the date stipulated in the agreement for sale. It is nowhere mentioned in Section 18 of the Act that in order to claim the interest for delayed delivery, the allottee has to prove the loss. Simple failure of the promoter to deliver the possession by the date specified in the agreement for sale, will make the allottee entitled for the interest provided in the proviso to Section 18(1) of the Act. It is settled rule of interpretation that the provisions of the special Act always override the provisions of the general law. So, the provisions of the Act will override Section 74 of the Indian Contract Act which is the general law."

The interest provided in proviso to section 18(1) of the Act is the return for his money used by the promoter

 In the Matter of M/s Apex Buildwell Pvt. Ltd. V/s Sachin Kumar,Appeal No.240 of 2019 decided on 09.02.2021 before THE HARYANA REAL ESTATE APPELLATE TRIBUNAL it was held that

“the interest is a premium paid for the use of money. Ordinarily a person who is deprived of his money to which he is legitimately entitled as of right is entitled to interest for the period his money is used by the other person.”

it was also held that

“the interest provided in proviso to section 18(1) of the Act is an interest simplicitor which is available to an allottee who does not intent to withdraw from the project as a return for his money used by the promoter, who caused delay in the delivery of the possession. Thus, the interest for delayed possession cannot be construed to be the compensation in strict sense to fall within the purview of Sections 71 and 72 of the Act read with rule 29 of the Rules.”

Primary rule of construction is that the intention of the legislature must be found in the words used by legislature itself.

 In the Matter of Mukund Dewangan Vs. Oriental Insurance Company Limited complaint no.CIVIL APPEAL NO.5826 OF 2011  decided on 3 July, 2017 before SUPREME COURT OF INDIA

Hon‟ble Apex Court has also laid down that 

• the first and primary rule of construction is that the intention of the legislature must be found in the words used by legislature itself. 
• Each word, phrase or sentence is to be construed in the light of the general purpose of the Act itself. 
• The interpretation of the provisions of law depends upon the text and context.
•  The text is the texture and the context is what gives colour and neither of them can be ignored. 
• That interpretation is best which makes the textual matching contextual.

Supreme Court - WB-HIRA is repugnant to the RERA, and is hence unconstitutional

 In the Matter of Forum for People’s Collective Efforts (FPCE) & Anr. V/s The State of West Bengal & Anr.Writ Petition (C) No. 116 of 2019 decided on 04.05.2021 

The Apex court held that 

“83. For the above reasons, we have come to the conclusion that WB-HIRA is repugnant to the RERA, and is hence unconstitutional. We also hold and declare that as a consequence of the declaration by this Court of the invalidity of the provisions of WB-HIRA, there shall be no revival of the provisions of the WB 1993 Act, since it would stand impliedly repealed upon the enactment of the RERA.

The project completion means that it must be completed in all respects and the entire project was handed over to the respective buyers

 In the Matter of M/S.Sare Shelters Project Pvt. ... vs Sare Squires C.M.S.A.No.27 of 2020 decided on 16.02.2021 before THE HIGH COURT OF MADRAS, the High court held that “The project completion means that it must be completed in all respects and the entire project was handed over to the respective buyers and all the original documents are handed over to the apartment owners association. Therefore, the builder cannot enter thereafter into the project premises as they lost their legal rights except with the permission of the owners or with reference to the agreement, if any, between the parties.

In the Matter of Subashini Thulasiram vs M/S.Spr & Rg Constructions C.M.S.A.No.22 of 2019 decided on 15 September, 2020 before THE HIGH COURT OF MADRAS it was held by the high court that  “The application for completion certificate without environmental clearance certificate is a defective application and in the eye of law, it cannot be called as an application for completion certificate…… The State Level Environmental Impact Assessment Authority cannot issue post facto environmental clearance certificate”,

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.”

Supreme Court - High Court would be justified in admitting the second appeal only when a substantial question of law is involved

 In the case of Gurudev Kaur and others -vs- Kaki and others [(2007) 1 SCC 546, the Apex Court held that after the 1976 Amendment, the scope of Section 100 has been drastically curtailed and narrowed down, according to the amended section,

(i) The High Court would be justified in admitting the second appeal only when a substantial question of law is involved;

(ii) The substantial question of law to precisely state such question;

(iii) A duty has been cast on the High Court to formulate substantial question of law before hearing the appeal;

(iv) Another part of the Section is that the appeal shall be heard only on that question".

It was also held by the Apex court that 

(i) On the day when the second appeal is listed for hearing on admission if the High

Court is satisfied that no substantial question of law is involved, it shall dismiss the

second appeal without even formulating the substantial question of law;

(ii) In cases where the High Court after hearing the appellate is satisfied that the

substantial question of law is involved, it shall formulate that question and then the

 appeal shall be heard on those substantial questions of

law, after giving notice and opportunity of hearing to the Respondent;

(iii) In no circumstances the High Court can reverse the judgment of the trial court

and the first appellate court without formulating the substantial question of law and

complying with the mandatory requirements of Section 100 Code of Civil Procedure".

in the matter of Nazir Mohamed Vs. J.Kamala and others, 2020 (3) RCR (Civil) 684 wherein after examination of precedents, it has been held:-

"32. To be "substantial", a question of law must be debatable, not previously settled

by the law of the land or any binding precedent, and must have a material bearing on

the decision of the case and/or the rights of the parties before it, if answered either

way."

Bombay High Court - A license does not create any title in favour of the licensee

 In the Matter of Suresh Malappa Shetty Vs. Special recovery officer, 2002 SCC Online BOM 1054; (2003) 3 Mah LJ 248

A license is treated to be in permissive possession only and possession is regarded to be with the licensor always. This usually happens in the case of joint development agreement / Collaboration agreement / License agreement and it is noteworthy that a license does not create any title in favour of the licensee

Supreme Court - The Authority owed a duty to explain and to satisfy the Court, the reasons for such high Cost escalation.

In the Matter of  Indore Development Authority vs Smt. Sadhana Agarwal & Ors 1995 SCC (3) 1, JT 1995 (3) 1  decided on 7 March, 1995 before Supreme Court of India

The Apex court held that " It is well known -that persons be- longing to Middle and lower Income Groups, before registering themselves for such flats, have to take their financial capacity into consideration and in some cases it results into great hardship when the development authorities announce an estimated or approximate cost and deliver the same at twice or three of the said amount."

it also observed that " The final cost should be proportionate to the approximate or estimated cost mentioned in the offers or agreements With the high rate of inflation, escalation of the' prices of construction materials and labour charges, if the scheme is not ready within the time frame, then it is not possible to deliver the flats or houses in question at the cost so announced. It will be advisable that before offering the flats to the public such development authorities should fix the estimated cost of the flats taking into consideration the escalation of the cost during the period the scheme is to be completed, "

"In the instant case , the estimated cost for the LIG flat was given out at Rs.45,000/-. But by the impugned communication, the appellant informed the respondents that the actual cost of the flat shall be Rs. 1,16,000/- i.e. the escalation is more than 100%. The High Court was justified in saying that in such circumstances, the Authority owed a duty to explain and to satisfy the Court, the reasons for such high escalation"

Supreme Court - an allottee does not obtain a vested right of allotment on a draw of lots.

 In the Matter of Delhi Development Authority vs Pushpendra Kumar Jain, Appeal (civil) 6205 of 1994 Decided on 23 September, 1994 before Supreme Court of India

Their Lordships have laid down the following principles:

(i) an allottee does not obtain a vested right of allotment on a draw of lots. The system of drawing of lots is only a mode, a method, a process to identify the allottee i.e. it is a process of selection. It is not allotment by itself. Mere identification or selection of allottee does not clothe the person selected with the legal right to allotment at the price prevailing on the date of draw of lots;

(ii) since the right to flat arises only on the communication of the letter of allotment the price or rate prevailing on the date of such communication is applicable unless otherwise provided in the scheme;

(iii) the scheme does not prescribe the period within which allotment has to be communicated from the date of draw of lots. It has of course to be done within a reasonable period

The Villas and Independent floors constructed on individual plots will also fall under the definition of the “Apartment”

 The Punjab Real Estate Regulatory Authority through the notification RERA/ENF/03 dated 24.01.2018 clarified that

"the Villas and Independent floors constructed on individual plots will also fall under the definition of the “Apartment”.

Supreme Court - Stand alone “Garage” as an independent unit by itself is not a ''Flat”

 In the Matter of Nahalchand Laloochand P.Ltd vs Panchali Co-Op.Hng.Sty.Ltd CIVIL APPEAL NO. 2544 OF 2010. Decided on 31.08.2010 Before Supreme court of india

it was also held that Stand alone “Garage” or in other words “Garage” as an independent unit by itself is not a ''Flat” .

Once an expression has been defined in the Act, that expression wherever it occurs in the Act,rules, orders, bye laws and notifications issued thereunder, should be taken in the same sense

 In the Matter of Prestige Engineering India ltd. Vs. Collector of Central Excise, 1994(48) ECC 203, 1994 (73) ELT 497 SC, JT 1994(5) ,

The Apex Court observed that “Once an expression has been defined in the Act, that expression wherever it occurs in the Act,rules, orders, bye laws and notifications issued thereunder, should be taken in the same sense”

In the Matter of S.Sundaram Pillai Vs. V.R. Pattabiraman, AIR 1985 SC 582 the Apex Court Observed that  “If a definition is provided to an expression, then the courts are not free to construe the expression otherwise, unless it is so warranted by the context”

A person having agreement to sell in his favor does not get any right in the property except the right to litigation on this basis

 In the Matter of Mohinder Kaur Vs. Sudarshan Krishnamurthy First Appeal (OS) No.197 of 1991 decided on 26.03.1992 Before DELHI HIGH COURT

it was held that “It is true, that under section 54 of the Transfer of Property Act a person having agreement to sell in his favor does not get any right in the property except the right to litigation on this basis.”

The Apartment or the Flat has to be a separate and self-contained which is used or intended to be used for residence or office, showroom or shop or godown or for carrying on industry or business.

 In the Matter of K.R. Agarwal vs Balkrishna Jawar And Anr. AIR 1972 Bom 343 Before Supreme court of India decided on 21.09.1971

it was held that There are three main ingredient of the term “Flat”

1. be separate and self contained set of premises

2. Be such that it can be used for or intended to be used for residence, shop or godown or for carrying out any industry, business or garage;

3. Form a part of the building

In the Matter of Nahalchand Laloochand P.Ltd vs Panchali Co-Op.Hng.Sty.Ltd CIVIL APPEAL NO. 2544 OF 2010. Decided on 31.08.2010 Before Supreme court of India

again it was held that “ the set of premises (The Apartment or the Flat) has to be a separate and self-contained which is used or intended to be used for residence or office, showroom or shop or godown or for carrying on industry or business.

x

Even an ex-parte judgement/ order has to be on merits

 According to Order XX of the Civil Procedure Code, 1908 (hereinafter referred to as the CPC), no suit can be decreed as a matter of course, and every judgment has to be on merits.

Every judgment passed by a court of law has to be on merits, irrespective of the fact, whether or not, the defendant appears before the court of law and defends himself.

If the defendant appears before the court and states that he does not want to defend himself, that will not enable the court to give an automatic decree in favour of the plaintiff. The court can, after due application of mind, decree or even reject the claim of the plaintiff.

It is important to note that if, the court finds that matter before it is complex and it would require legal assistance to decide the matter on merits then the court, on its own motion, can appoint an advocate to assist it, and such advocate is called amicus curiae

• In the matter of: Lakshmi Ram Bhuyan V/s Hari Prasad Bhuyan, (2003) 1 SCC 197, it was held that:

“… Order XX requires a judgment to contain all the issues and findings or decision thereon with the reasons therefore. The judgment has to state the relief allowed to a party. The preparation of decree follows the judgment. The decree shall agree with the judgment. The decree shall contain, inter alia, particulars of the claim and shall specify clearly the relief granted or other determination of the suit. The decree shall also state the amount of costs incurred in the suit and by whom or out of what property and in what proportions such costs are to be paid.”

• In the matter of: Ramesh Chand Ardawatiya V/s Anil Pajwani, AIR 2003 SC 2508, while considering the provisions of Order IX, Rule 6 and Order VIII, Rule 10 of the CPC, it was observed that even if the suit proceeds ex-parte under Order IX, Rule 6 of the CPC, the necessity of proof by the plaintiff of its case cannot be dispensed with.

• Maya Devi V/s Lalta Prasad, (2015) 5 SCC 588, it was held that the absence of defendant to contest the suit does not invite a punishment in the form of an automatic decree.

• State of Rajasthan V/s Ani, (1997) 6 SCC 162, it was held that Section 165 of the Indian Evidence Act, 1872 confers vast and unrestricted powers on the trial court to put “any question he pleases, in any form, at any time, of any witness, or of the parties, about any fact relevant or irrelevant” in order to discover relevant facts. 

Plaintiff has to stand on its own legs:

If the defendant submits to the court that he does not want to defend himself, as a matter of his choice then this does not mean that the defendant admits the assertions made against him by the plaintiff in the plaint. The plaintiff still has to prove his case by leading necessary and cogent evidence, as required
 In the matter of: Anil Rishi V/s Gurbaksh Singh, (2006) 5 SCC 558, it was observed that:
                                                                                                                                                                             “… The initial burden of proof would be on the plaintiff in view of Section 101 of the Evidence Act… In terms of the said provision, the burden of proving the fact rests on the party who substantially asserts the affirmative issues and not the party who denies it. … In terms of Section 102 [of the IEA] the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same.”                                   

Allahabad High Court - Every court/tribunal has an inherent power of procedural review and the same can not be denied to the petitioner merely for the reason that there is no provision to that effect in the Act/Statute.

 In the Matter of M/S T.G.B. Realty Pvt. Ltd. Complaint no. WRIT - C No. - 32301 of 2019 decided on 17.10.2019  before Allahabad High Court

Fact of the Case.

• The petitioner is a builder and its project Neel Gagan, Siddhartha Vihar, Ghaziabad is registered under the Real Estate Regulatory Authority

• The petitioner by means of this writ petition has made a prayer for quashing of the orders dated 10.4.2018 dated 27.4.2019 passed by the RERA in complaint case no. 1120173596 Prakash Chandra Agrawal Vs.M/s. TGB Reality Private Limited and for quashing of the recovery certificate dated 17.8.1999 and the recovery citation dated 12.9.2019 issued in pursuance to the aforesaid orders.

Argument by the Applicant

• both the above orders have been passed without any notice and opportunity of hearing to the petitioner.

• The complainant has given the wrong address of the petitioner in the complaint and the notice was sent on the wrong address which was never served upon the petitioner. 

• it was denied opportunity of hearing

• If the petitioner has not been served with any notice or given opportunity of hearing, the remedy is by way of an application for recall of the impugned orders before the RERA.

Argument by the Defendant

• RERA is not entertaining the recall application for the reason that there is no provision under the Act for the said purpose.

Final Order

• It is well recognized that every court/tribunal has an inherent power of procedural review and the same can not be denied to the petitioner merely for the reason that there is no provision to that effect in the Act/Statute.

• we dispose of the writ petition with liberty to the petitioner to apply for recall of the two orders impugned in this writ petition passed by the RERA. In case any such recall application/(s) are filed, the RERA would entertain the same and dispose them of in accordance with law most expeditiously, if possible, within a period of one month from the date of the filing of such application (s).

MahaRERA Appellate Tribunal: There can be no forfeiture on withdrawal before sale agreement

 The Maharashtra Real Estate Appellate Tribunal, Mumbai, on March 17, 2021 set aside the order dated October 3, 2019 (“impugned order”) passed in Complaint No. CC006000000089770 in the matter of Mr. Dinesh R. Humane and Mrs. Ranjana D. Humane (“Appellants/Allottees”) v. Piramal Estate Private Limited (“Respondent/Promoter”) by the Maharashtra Real Estate Regulatory Authority (“MahaRERA”). The order dated March 17, 2021 directed the Promoter to refund the total amount paid by Allottees on the cancellation of flat reservation.

Facts of the Case:

The Allottees agreed to purchase, and the Promoter agreed to sell Flat No. 807 in the project namely Vaikunth Cluster- 2 at Thane. The Allottees submitted form of ‘request for reservation’ of Flat on 29th January 2019 and paid an amount of Rs. 1,12,393/- as booking amount to the Promoter. The Allottees  also paid Rs. 4,49,574/- on March 1, 2019 towards price of the Flat to Promoter. On account of medical emergency in the family of Allottees, they decided to cancel the flat booking. Accordingly, they sent an   e-mail to the Promoter requesting to cancel the flat booking and to refund the total amount of Rs.5,61,967/-. The Promoter replied vide e-mail dated May 20, 2019 that the amount paid by Allottees is forfeited on account of cancellation. The Allottees filed a Complaint before MahaRERA for recovery of amount of Rs. 5,61,967/- from the Promoter. The impugned order was passed by MahaRERA whereby the Promoter/ Respondent was directed to refund the booking amount in accordance with the booking form. The Allottees filed an appeal before MahaRERA Appellate Tribunal challenging the order passed by MahaRERA.

Issues:

Whether the MahaRERA order directing the Promoter to refund the booking amount to Allottees in accordance with booking form signed by both the parties is correct?

Analysis:

The MahaRERA Appellate Tribunal held that:

Form of ‘request for reservation’ is signed by Allottees only and not by the Promoter. The terms and conditions recited in Annexure “A” thereto are to be followed and observed by Allottees only. As per the impugned order, amount is to be refunded in accordance with the booking form signed by both the parties. Annexure “A” is not styled as booking form and there is no document having nomenclature as "booking form” which is signed by Allottees or by both the parties. Thus, the impugned order is passed based on such document which does not exist on record.

The only document signed by the Allottees is the printed form styled as ‘request for reservation’, which consists of 33 different terms and conditions to be observed by Allottees only. Clause 17 providing forfeiture of 10% amount of the total price of flat or the amount paid till the date, whichever is lesser, in case of withdrawal by Allottees is ex-facie unreasonable, unfair and inequitable. Existence of such a condition in the printed form of ‘request for reservation’ is against the object and purpose of Real Estate (Regulation and Development) Act, 2016 (“RERA”) and the same being against statute of RERA is not binding on the parties and such unreasonable and unfair transaction cannot be enforced.

The Supreme Court in the case of Pioneer Urban Land and Infrastructure v. Govindan Raghavan, [Appeal No. 12238 of 2018, decided on April 2, 2019] held that the court will not enforce an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where contracting parties are not equal in bargaining power and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form as a part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rule may be.

The agreement for sale was not executed between the parties. Parties never reached to the stage of executing agreement for sale. There was no attempt to execute the agreement on the part of either the Promoter or Allottees. The refund of amount paid to promoter can be demanded as per Section 18 of RERA on the ground that promoter fails to give possession on agreed date or fails to complete the project as per terms and conditions of agreement for sale. However, in this peculiar matter though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that the object of RERA is to protect the interest of the consumer.

Regulation 39 of Maharashtra Real Estate Regulatory Authority (General Regulation), 2017 and Regulation 25 of Maharashtra Real Estate Appellate Tribunal Regulation, 2019 are in respect of the inherent powers of the regulatory authority and the appellate tribunal to pass such orders which are necessary to meet the ends of justice.

The MahaRERA Appellate Tribunal, thus, set aside the impugned order and directed the Promoter to refund the full amount paid by Allottees.

Long term leases would amount to sale and hence lessees will also fall within the definition of "allottee”

 In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal

In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal ruled that “ Long term leases would amount to sale and hence lessees will also fall within the definition of allottee”

This Order was further upheld by the Order of Bombay high Court in Lavasa Corporation Limited v. Manju Narendra Joshi (C.A. No. 791 of 2018) decided on 07.08.2018.

On behalf of the lessor it was contended that since the impugned agreement was an 'agreement of lease' and not an ‘agreement for sale’, the provisions of RERA would not be applicable.

The definition of ‘promoter’ under section 2(zk) of RERA was relied upon by the lessor, as it contemplates a person, who constructs or caused to be constructed an apartment ‘for the purpose of selling’.

Reliance was also placed on the definition of 'allottee', under Section 2(d) of RERA, which specifically provides that allottee does not include a person to whom plot, apartment or building is ‘given on rent’.

Reliance was placed on the judgment of the Supreme Court in the case of R.K. Palshikar (HUF) v. CIT, M.P., Nagpur and Bhandara, 1988 (172) ITR 311, wherein it was held that lease for a period of 99 (ninety nine) years would amount to transfer of capital assets. A judgment of the Madras High Court was also relied upon, which held that a lease for a period of 99 (ninety nine) years is an alienation as a sale, and mere use of the word 'lease' or the fact that a long term is fixed would not by itself make the document in lease.

The intention of RERA, as highlighted by the Supreme Court in the case of R.S. Raghunath v. State of Karnataka, (1992) 1 SCC 335 was also looked at, which was to protect the interest of consumers who have invested substantial amounts in real estate projects. If they are excluded from the definition of 'Allottee' and thereby from the protection given under the Act, by giving restrictive meaning to the term 'Allottee', the very object of RERA would stand frustrated.