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SUPREME COURT OF INDIA
M.R. SHAH, B.V. NAGARATHNA, JJ.
Union Bank Of India – Appellant
Versus
Rajasthan Real Estate Regulatory Authority & Ors. Etc. Etc. - Respondents
Petition for Special Leave to Appeal (C) Nos.1861-1871 of 2022
Decided on : 14-02-2022
Regulation 9 - Delegation of Powers - The court upheld the validity of Regulation 9 of the Regulations of 2017, affirmed the delegation of powers to a single member of RERA, and emphasized the supremacy of RERA over SARFAESI Act in case of conflict. It also clarified the applicability of RERA in cases involving transactions between borrowers and banks or financial institutions.
Fact of the Case:
The court affirmed the conclusions of the High Court regarding the validity of Regulation 9 and the delegation of powers to a single member of RERA. It clarified the applicability of RERA in cases involving transactions between borrowers and banks or financial institutions.
Finding of the Court:
The court found in favor of the respondents and dismissed the Special Leave Petitions, while clarifying the applicability of para 36(v) in cases initiated by home buyers to protect their rights.
Issues: Validity of Regulation 9, delegation of powers to a single member of RERA, applicability of RERA in transactions between borrowers and banks or financial institutions, and the jurisdiction of RERA authority to entertain complaints against banks as secured creditors.
Ratio Decidendi: The court upheld the validity of Regulation 9, affirmed the delegation of powers to a single member of RERA, emphasized the supremacy of RERA over SARFAESI Act in case of conflict, and clarified the jurisdiction of RERA authority to entertain complaints against banks as secured creditors.
Final Decision: The Special Leave Petitions were dismissed, and pending application(s) were disposed of.
ORDER :
1. We have heard Shri Tushar Mehta, learned Solicitor General appearing on behalf of the petitioner/Bank and Shri Ritin Rai, learned senior counsel appearing on behalf of one of the respondents/Caveator/one of the home buyers.
2. We are in complete agreement with the view taken by the High Court by which the High Court has ultimately concluded in para 36, as under -
(i) Regulation 9 of the Regulations of 2017 is not ultra vires the Act or is otherwise not invalid.
(ii) The delegation of powers in the single member of RERA to decide complaints filed under the Act even otherwise flows from Section 81 of the Act and such delegation can be made in absence of Regulation 9 also.
(iii) As held by the Supreme Court in the case of Bikram Chatterji (supra) in the event of conflict between RERA and SARFAESI Act the provisions contained in RERA would prevail.
(iv) RERA would not apply in relation to the transaction between the borrower and the banks and financial institutions in cases where security interest has been created by mortgaging the property prior to the introduction of the Act unless and until it is found that the creation of such mortgage or such transaction is fraudulent or collusive.
(v) RERA authority has the jurisdiction to entertain a complaint by an aggrieved person against the bank as a secured creditor if the bank takes recourse to any of the provisions contained in Section 13(4) of the SARFAESI Act.”
3. However, it is clarified that para 36(v) reproduced hereinabove shall be applicable in a case where proceedings before the RERA authority are initiated by the homer buyers to protect their rights. With this, the Special Leave Petitions are dismissed.
4. Pending application(s) shall stand disposed of.
RERA Act does not apply to pre-existing transactions unless fraudulent, and RERA has jurisdiction over complaints against secured creditors under SARFAESI Act.
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