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2019 Supreme(Kar) 816

IN THE HIGH COURT OF KARNATAKA
ALOK ARADHE, J.
M/s. Panchmal Properties - Appellant
Versus
Union of India - Respondent
Writ Petition No. 25211 of 2018
Decided On : 20-08-2019

Advocates Appeared:
Sanjay Krishna V., Adv., Sandesh J. Chouta, Adv., B. Balakrishna, Adv., K. Manjunatha Rao Bhonsle, Adv., Prashanth M.V., Adv.

Headnote:

Real Estate (Regulation and Development) Act, 2016 - Section 43(1) - Rules 18(8) and 31(9) of the Karnataka Real Estate (Regulation and Development) Rules, 2017 - Quash - Appointment as Interim Regulatory Authority - Petitioner is a promoter of mixed development real estate project for which it has obtained sanction of building plan from petitioner commenced project work provisions came into force vide a Notification with effect from remaining Sections of Act came into force by a Notification with effect respondent framed Rules which came in force Rules Secretary of Housing Department was appointed as Interim Regulatory Authority –Held, State Government to appoint Real Estate Regulatory Authority as well as Real Estate Appellate Tribunal on an interim basis- Therefore it is evident that Rules not in contravention of parent Act but are in consonance with powers conferred therein - Therefore submission made on behalf of petitioner that provisions of Rules are ultra vires Act is sans substance and does not deserve acceptance Tribunal constituted therefore no case for interference is made out at this stage- Needless to state that till appeal is filed by petitioner and application for stay is considered by Appellate Authority interim order granted by a bench of this court shall continue Court deems it appropriate to direct that in case Real Estate Regulatory Authority has not been established same shall be established positively within a period of one month from today as undertaken by Additional Advocate General- Needless to state that State Government shall provide all necessary infrastructure as well as staff to ensure that Real Estate Regulatory Authority becomes functional- Admittedly Real Estate Appellate Tribunal has only been notified and has not been established- In view of undertaking given by Additional Advocate General it is directed that Tribunal shall be established including staff shall be provided to Appellate Tribunal to make it functional in an effective manner within a period of one month from today - Petition disposed

JUDGMENT :

Alok Aradhe, J.

Mr. Sanjay Krishna V., learned counsel for the petitioner.

Mr. Sandesh J. Chouta, learned Additional Advocate General along with Mr. B. Balakrishna, learned Additional Government Advocate for respondent No. 2.

Mr. K. Manjunatha Rao Bhonsle, learned counsel for the respondent No.1.

Mr. Prashanth M.V., learned counsel for respondent No. 3.

In this petition, the petitioner inter alia seeks a writ of mandamus directing respondent No.2 to establish Real Estate Regulatory Authority and Real Estate Appellate Tribunal as provided under Section 20(1) and Section 43(1) of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as 'the Act' for short). The petitioner also seeks a writ of certiorari to striked down Rules 18(8) and 31(9) of the Karnataka Real Estate (Regulation and Development) Rules, 2017 as ultra vires, the Act (hereinafter referred to as 'the Rules' for short). The petitioner also seeks quashment of impugned order dated 11.05.2018 passed by the authority constituted under the Rules. In order to appreciate the petitioner's challenge few facts need mention, which are stated infra:

2. The petitioner is a promoter of mixed development real estate project for which it has obtained sanction of building plan from Bengaluru Mahanagara Palike on 09.01.2017. The petitioner commenced the project work on 07.03.2017. The provisions of Sections 2,20 to 39,41 to 58,71 to 78 and 81 to 92 of the Act came into force vide a Notification dated 26.04.2016 with effect from 01.05.2016. The remaining Sections of the Act came into force by a Notification dated 19.05.2017 with effect from 01.05.2017. The respondent No.2 framed the Rules, which came in to force on 11.07.2017. Under Rule 18(8) of the Rules, the Secretary of the Housing Department was appointed as Interim Regulatory Authority. The petitioner on 09.11.2017 applied for the project. On 01.12.2017, respondent No.3 issued a memorandum by which compulsory penalty was sought to be imposed on ongoing projects in respect of the builders who failed to register themselves before 31.07.2017. Thereafter, on 05.04.2018 a show cause notice was issued to the petitioner by respondent No.3. The petitioner responded to the aforesaid show cause notice by filing a reply on 05.04.2018. However, by an order dated 11.05.2018, the respondent No.3 directed the petitioner to pay a sum of Rs.76,94,000/- as penalty. In the aforesaid obtaining factual matrix, the petitioner has visited this court seeking the reliefs as stated supra:

3. Learned counsel for the petitioner while inviting the attention of this court to Section 20(1) of the Act as well as Section 43(1) of the Act submitted that the aforesaid provisions prescribed that appropriate Government shall within a period of one year from the date of coming into force of this Act by Notification shall establish authorities viz., Real Estate Regulatory Authority and the Real Estate Appellate Tribunal respectively under Sections 20(1) and 43(1) of the Act. It is further submitted that the aforesaid authorities were required to be established from the period from 01.05.2016 till 30.04.2017. However, in the month of May 2017, the Rules have been enacted and under the Rules viz., Rules 18(8) and Rule 31(9) of the Rules, the Real Estate Regulatory Authority and Real Estate Appellate Tribunal have been merely notified. It is further submitted that power to deal with violation in respect of Sections 3 and 4 of the Act lies with the authority and not the Adjudicating Officer. It is also submitted that petitioner does not have any alternative remedy as the Appellate Tribunal has not been established. It is also urged that since, the Rules have been framed beyond the period of one year and under Rules 18(8) and 31(9) the Real Estate Regulatory Authority and Real Estate Appellate Tribunal have been constituted. Therefore, the aforesaid Rules are ultra vires the provisions of Sections 20(1) and 43(1) of the Act respectively.

4. On

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