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2021 Supreme(Mad) 2314

IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. CHANDRASEKHARAN, J.
Army Welfare Housing Organisation South Hutments, New Delhi – Petitioner
Versus
Col. R. Ganesan – Respondent
C.R.P. (NPD) No. 817 of 2021, C.M.P. No. 6771 of 2021
Decided On : 12-11-2021

Advocates:
Advocate Appeared:
For the Petitioner: Thriyambak J. Kannan.
For the Respondent: K.R. Samratt.

Headnote:

Constitution of India, 1950 - Article 227 - Army Welfare Housing Organisation Rules, 1987 - Rule 89-91 - RERA Act, 2016 - Section 88 - Tamil Nadu Real Estate (Regulation and Development) Act, 2016 - Petitioners submitted that Adjudicating Officer of Tamil Nadu Real Estate Regulatory Authority (TNRERA) dismissed petition on ground that Section 88 of RERA Act makes it clear that provisions of Act shall be in addition to and not in derogation to provisions of any other law for time being in force - That there is a specific agreement, when dispute arises, to refer matter to arbitration – Respondent submitted that respondent had never agreed for draconian one sided terms of Master brochure, 1987 - Held, statement of objects and reasons shows that this Act is enacted for establishing Real Estate Regulatory Authority for regulation and promotion of real estate sector and to ensure sale of plot, apartment or building, as case may be, in an efficient and transparent manner and to protect interest of consumers in real estate sector and to establish a Real Estate Appellate Tribunal to hear appeals from decisions, directions or orders of Real Estate Regulatory Authority - It is to ensure greater accountability towards consumers and would significantly reduce frauds and delays as also current high transaction cost - It attempts to balance interest of consumers and promoters by imposing certain responsibilities on both - This Act has provisions for registration of real estate project and real estate agents, definitions of functions and duties of promoters, rights and duties of allottees, establishment of Real Estate Regulatory Authority and Real Estate Appellate Tribunal, defining their functions and powers and importantly providing penalties for offences committed under Act - Sections 59 to 69 of Real Estate (Regulation and Development) Act, 2016 deals with offences, penalties and adjudication - Section 70 deals with compounding of offences - Certainly arbitrators cannot impose penalty and imprisonment - Civil Revision Petition dismissed.

JUDGMENT :

G. CHANDRASEKHARAN, J.

Prayer: Civil Revision Petition filed under Article 227 of the Constitution of India, against the order dated 18.03.2021 made in S.R. No. 08 of 2021 in unnumbered I.A. No. (Blank) of 2021 in C.C.P. No. 95 of 2020 (impugned order) by the Adjudicating Officer, Tamil Nadu Real Estate Regulatory Authority (TNRERA), Egmore, Chennai (“AO TNRERA”)

1. This petition is filed to set aside the impugned order dated 18.03.2021 passed in S.R. No. 08 of 2021 in unnumbered I.A. No. (Blank) of 2021 in C.C.P. No. 95 of 2020 (impugned order) by the Adjudicating Officer, Tamil Nadu Real Estate Regulatory Authority (TNRERA), Egmore, Chennai (“AO TNRERA”).

2. Learned counsel for the petitioners submitted that the respondent filed the complaint before the Adjudicating Officer of Tamil Nadu Real Estate Regulatory Authority (TNRERA) alleging certain deficiencies of services and claiming interest from the petitioners for the delayed handing over possession of DU for an amount of Rs. 25,87,059/- refund of entire cost of car park at Rs. 5,81,377/- costs of litigation and other expenses at Rs. 2,00,000/- Facility Management charges Rs. 65,360/- and Rs. 5,65,305/- towards mental agony, loss of rental value at Rs. 6,32,333/- to an extent of total compensation of Rs. 39,99,101/- and for other reliefs.

3. The case of the petitioners is that the respondent is governed by Army Welfare Housing Organisation Rules. Rules 89 to 91 provide for arbitration:

    “89. All matters of disputes, differences relating to the registration, booking, allotment and cancellation and in all such other matters as are incidental to these and are likely to affect the mutual rights, interest, privileges, claims of the Registrant vis-a-vis the Organisation, may be referred to the Chairman of the Organisation, who shall appoint a sole arbitrator under the provisions of the Arbitration and Conciliation Act, 1996 and/or such provisions as may be amended from time to time, whose award shall be final and binding on both the parties. The arbitration proceedings shall be held in Delhi only regardless of where the property under dispute is located.

90. Appointment of an arbitrator will not be objected to on the grounds that he is subordinate to the Chairman, is a member of the Board of Management or Executive Committee or is a registrant of the Organisation.

91. No request for arbitration or adjudication of a dispute will be entertained by the Chairman unless it is made within two months of the cause of action and prior to taking possession of dwelling unit. Possession will not be given till the arbitration proceedings are complete

92. No request for arbitration will be entertained by the Chairman unless he is convinced that the dispute warrants recourse to arbitration.”

Therefore, the petitioners filed an application under Section 8 of the Act before the Adjudicating Officer, Tamil Nadu Real Estate Regulatory Authority (TNRERA) to direct the respondent to seek appropriate remedy from the Chairman of the first applicant in terms of Rule 89 of Army Welfare Housing Organisation Rules, 1987. Master Brouchure, 1987, forms part and parcel of the booking letter dated 31.07.2012, entered into between the petitioners and respondent.

4. Learned counsel for the petitioners submitted that the Adjudicating Officer of the Tamil Nadu Real Estate Regulatory Authority (TNRERA) dismissed the petition on the ground that Section 88 of RERA Act makes it clear that the provisions of the Act shall be in addition to and not in derogation to the provisions of any other law for time being in force. Relying on the judgment in M/s. Emaar MGF Land Limited vs. Aftab Singh, (2019) 12 SCC 751, that consumer disputes are non-arbitrable, learned Adjudicating Officer held that the jurisdiction of RERA cannot be fettered by the existence of arbitration clause in the agreement or brochure of the applicant and in this view of the matter, dismissed the petition filed by the petitioners. Against the said order,

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