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2021 Supreme(Kar) 629

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S.C. Sharma, V. Srishananda, JJ.
Panchmal Properties and Ors. - Appellant
Vs.
Union of India and Ors. - Respondent
Writ Appeal Nos. 3789/2019 (GM-RES), 3790/2019 and 3791/2019
Decided On : 05-03-2021

Advocates:
Advocate Appeared:
For the Appellant : Sanjay Krishna V., Adv.
For the Respondent: Laxminarayana, AGA and K. Manjunatha Rao Bhonsle, CGSC

Headnote:

Real Estate (Regulation and Development) Act, 2016 - Section 20(1) and Section 43(1) - Karnataka Real Estate (Regulation and Development) Rules, 2017 - Rule 18(8) and 31(9) - Establishment of Real Estate Appellate Tribunal - Promoter of a mixed development Real Estate Project - Quashment of order - Appellant has stated before learned Single Judge that under Section 84 of Act of 2016, it was mandatory to make Rules for carrying out provisions of Act of 2016 within six months from date of commencement of Act of 2016 and the State Government was under an obligation to complete the process of framing of the Rules - Held, It is true that the statutory requirement prescribed under the law cannot be an empty formality, but merely because Interim Regulatory Authority or Appellate Tribunal have been constituted, it does not make out a case for declaring Rules 18(8) and 31(9) of the Rules of 2017 as ultra vires. The Rules have been framed by State Government and State Government is jurisdictionally competent to frame Rules keeping in view statutory provisions as contained under Act of 2016, hence, Rules are not arbitrary and therefore, prayer to declare Rules as ultra vires, is rejected - It is a directory provision as provision is required to be held directory, in case, no consequences of its non compliance had been mentioned in the statute. This Court is in agreement with the logic given and the reasoning assigned by the learned single Judge and does not find any reason to interfere with the order passed by the learned Single Judge - Writ appeal dismissed.

JUDGMENT

S.C. SHARMA, J.

1. Writ appeal bearing WA. No. 3789/2019 has been filed being aggrieved by the order dated 20.8.2019 passed by the learned Single Judge in WP. No. 25211/2018 between M/s. Panchmal Properties and Union of India and Others.

2. The facts of the case in WA. No. 3789/2019 reveal that the appellant before this Court, who is a promoter of a mixed development Real Estate Project, namely "Green Gates", situated at Padavu village, Mangaluru, has filed WP. No. 25211/2018 praying for issuance of writ of mandamus directing the State of Karnataka 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 'Act of 2016'). The appellant has also made a prayer for issuance of a writ of certiorari to strike down Rule 18(8) and 31(9) of the Karnataka Real Estate (Regulation and Development) Rules, 2017, (hereinafter referred to 'Rules of 2017) as ultra vires. A prayer was also made for quashment of the order dated 11.5.2018 passed by the Interim Authority constituted under the Rules of 2017.

3. The appellant herein, who is the petitioner in the writ petitioner (hereinafter referred to as 'the appellant' for the sake of convenience) has stated before this Court that Act of 2016 came into force vide gazette notification dated 26.4.2016 and as per Section 20(1) of the Act of 2016, it was incumbent upon the State Government to establish an authority within a period of one year from the date of coming into force of the Act of 2016 viz., Real Estate Regulatory Authority. The Act of 2016 also provided that until a Regulatory Authority is established, the State Government shall, by an order, designate any Regulatory Authority or any Officer preferably the Secretary of the Department of Housing, as Regulatory Authority for the purposes under the Act.

4. The appellant has stated before the learned Single Judge that under Section 84 of the Act of 2016, it was mandatory to make Rules for carrying out the provisions of the Act of 2016 within six months from the date of commencement of the Act of 2016 and the State Government by 30.4.2017 was under an obligation to complete the process of framing of the Rules. It was further stated that the Government of India, vide notification dated 19.4.2017, w.e.f., 1.5.2017 brought into force the remaining provisions of the Act of 2016 relating to registration of Real Estate Projects with the Real Estate Regulatory Authority appointed under the Act of 2016. The appellant further contended that the State Government, after a lapse of about 15 months from the date of the commencement of the Act of 2016, on 11.7.2017 framed the Rules known as 'the Karnataka Real Estate (Regulation and Development) Rules, 2017' under Section 84 of the Act of 2016 and under Rule 18(8) of the Rules of 2017, made a provision for appointing the Secretary of the Housing Department as an Interim Regulatory Authority, for the period, beyond which the Interim Authority could be designated, in violation of the Act of 2016.

5. It has been further stated by the appellant that the Interim Regulatory Authority has assumed jurisdiction of a Regulatory Authority and has started dealing with the applications, complaints and cases with respect to Real Estate Projects, ignoring the mandate of law requiring composition of Authority consisting of a Chairman and not less than two whole time Members, as required under Section 21 of the Act of 2016.

6. The appellant further contended before the learned Single Judge that the Interim Regulatory Authority appointed under Rule 18(8) of the Rules of 2017 is ultra vires of the provisions of the Act of 2016 and the Interim Authority has no jurisdiction as a Real Estate Regulatory Authority to function and perform under the Act of 2016. The appellant has stated further that the Interim Authority has launched a web portal on 24.7.2017 and a public not

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