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IN THE HIGH COURT OF PUNJAB AND HARYANA
S. Muralidhar, Avneesh Jhingan, JJ.
Janta Land Promoters Private Limited - Appellant
Versus
Union Of India And Others - Respondent
Civil Writ Petition No. 8548 of 2020, 8550 of 2020, 8557 of 2020, 10087 of 2020, 10095 of 2020, 10096 10097 of 2020, 10115 of 2020, 10116 of 2020, 10117 of 2020, 10118 of 2020, 10124 of 2020, 10125 of 2020, 3049 of 2020, 3054 of 2020, 11903 of 2020, 11918 of 2020, 32437 of 2019; R E R A Application No. 2 of 2020, 8 of 2020, 9 of 2020, 10 of 2020, 11 of 2020, 13 of 2020, 14 of 2020, 22 of 2020
Decided On : 16-10-2020
The High Court of Punjab and Haryana, in a batch of matters, interpreted various provisions of the Real Estate (Regulation and Development) Act, 2016 ('Act') and the Punjab Real Estate Regulatory Authority (Procedure for Handling Complaints and Related Matters) Regulations 2017 ('Punjab RERA Procedure Regulations'). The Court held that a Single Member of the Authority or the Appellate Tribunal cannot validly pass orders on a complaint or an appeal, respectively. Regulations 7 and 8 of the Punjab RERA Procedure Regulations were struck down as ultra vires the Act. The Court further clarified the respective adjudicatory powers of the Authority and the Adjudicating Officer (AO). It held that the Authority has the power to examine and determine the outcome of complaints seeking refund of the amount, interest on the refund amount, directing payment of interest for delayed delivery of possession, or penalty and interest thereon. On the other hand, the AO has the exclusive power to determine complaints seeking compensation or interest by way of compensation. The Court also upheld the validity of the proviso to Section 43(5) of the Act, which requires the appellant to deposit a certain percentage of the penalty amount or the total amount to be paid to the allottee, as a condition for entertaining the appeal before the Appellate Tribunal. The Court rejected the plea that the requirement of pre-deposit was discriminatory or onerous. The Court further held that the appointment of Mr. Sanjiv Gupta as Member of the Authority was valid and that the orders of the Appellate Tribunal declining to waive the requirement of pre-deposit were upheld.
Fact of the Case:
In a batch of matters, the High Court of Punjab and Haryana was tasked with interpreting various provisions of the Real Estate (Regulation and Development) Act, 2016 ('Act') and the Punjab Real Estate Regulatory Authority (Procedure for Handling Complaints and Related Matters) Regulations 2017 ('Punjab RERA Procedure Regulations'). The main issues before the Court were: 1. Whether a Single Member of the Authority or the Appellate Tribunal can validly pass orders on a complaint or an appeal, respectively. 2. The respective adjudicatory powers of the Authority and the Adjudicating Officer (AO). 3. The validity of the proviso to Section 43(5) of the Act, which requires the appellant to deposit a certain percentage of the penalty amount or the total amount to be paid to the allottee, as a condition for entertaining the appeal before the Appellate Tribunal. 4. The validity of the appointment of Mr. Sanjiv Gupta as Member of the Authority. 5. The validity of the orders of the Appellate Tribunal declining to waive the requirement of pre-deposit.
Finding of the Court:
1. A Single Member of the Authority or the Appellate Tribunal cannot validly pass orders on a complaint or an appeal, respectively. Regulations 7 and 8 of the Punjab RERA Procedure Regulations were struck down as ultra vires the Act. 2. The Authority has the power to examine and determine the outcome of complaints seeking refund of the amount, interest on the refund amount, directing payment of interest for delayed delivery of possession, or penalty and interest thereon. On the other hand, the AO has the exclusive power to determine complaints seeking compensation or interest by way of compensation. 3. The proviso to Section 43(5) of the Act, which requires the appellant to deposit a certain percentage of the penalty amount or the total amount to be paid to the allottee, as a condition for entertaining the appeal before the Appellate Tribunal, is valid and not discriminatory or onerous. 4. The appointment of Mr. Sanjiv Gupta as Member of the Authority was valid. 5. The orders of the Appellate Tribunal declining to waive the requirement of pre-deposit were upheld.
Issues: 1. Can a Single Member of the Authority or the Appellate Tribunal validly pass orders on a complaint or an appeal, respectively? 2. What are the respective adjudicatory powers of the Authority and the Adjudicating Officer (AO)? 3. Is the proviso to Section 43(5) of the Act, which requires the appellant to deposit a certain percentage of the penalty amount or the total amount to be paid to the allottee, as a condition for entertaining the appeal before the Appellate Tribunal, valid? 4. Is the appointment of Mr. Sanjiv Gupta as Member of the Authority valid? 5. Are the orders of the Appellate Tribunal declining to waive the requirement of pre-deposit valid?
Ratio Decidendi: 1. The Court interpreted the relevant provisions of the Act and the Punjab RERA Procedure Regulations and concluded that a Single Member of the Authority or the Appellate Tribunal cannot validly pass orders on a complaint or an appeal, respectively. Regulations 7 and 8 of the Punjab RERA Procedure Regulations were struck down as ultra vires the Act. 2. The Court interpreted the relevant provisions of the Act and concluded that the Authority has the power to examine and determine the outcome of complaints seeking refund of the amount, interest on the refund amount, directing payment of interest for delayed delivery of possession, or penalty and interest thereon. On the other hand, the AO has the exclusive power to determine complaints seeking compensation or interest by way of compensation. 3. The Court upheld the validity of the proviso to Section 43(5) of the Act, which requires the appellant to deposit a certain percentage of the penalty amount or the total amount to be paid to the allottee, as a condition for entertaining the appeal before the Appellate Tribunal. The Court rejected the plea that the requirement of pre-deposit was discriminatory or onerous. 4. The Court examined the relevant provisions of the Act and the appointment process of Mr. Sanjiv Gupta and concluded that his appointment as Member of the Authority was valid. 5. The Court upheld the orders of the Appellate Tribunal declining to waive the requirement of pre-deposit. The Court held that the Appellate Tribunal has no power to waive the requirement of making a pre-deposit as mandated by the proviso to Section 43(5) of the Act.
Final Decision: 1. Regulations 7 and 8 of the Punjab RERA Procedure Regulations were struck down as ultra vires the Act. 2. The orders passed by the Single Member of the Authority and the Appellate Tribunal were quashed for lack of jurisdiction. 3. The complaints were remanded to the Authority to be proceeded with in accordance with law. 4. The prayer for quashing the appointment of Mr. Sanjiv Gupta as member of the Authority was rejected. 5. The appeals were disposed of with no orders as to costs.
JUDGMENT
S. Muralidhar, J. - Introduction
1. This batch of 26 matters, eight of which are appeals under Section 58 of the Real Estate (Regulation and Development) Act, 2016 ('Act') and the remaining are writ petitions under Article 226 of the Constitution of India, raise important questions of law concerning the interpretation of the Act. The writ petitions also seek the quashing of Regulations 7 and 8 of the Punjab Real Estate Regulatory Authority (Procedure for Handling Complaints and Related Matters) Regulations 2017 ('the Punjab RERA Procedure Regulations').
2. These petitions arise in the background of more or less similar facts and circumstances. Illustratively, therefore, the facts relating to a few of the writ petitions and some of the appeals will be discussed.
Relevant provisions of the Act
3. Before proceeding to note the facts, the relevant provisions of the Act and the Punjab RERA Procedure Regulations may be noticed. The Act envisages adjudication by both the Authority in exercise of the powers under Chapter V of the Act and in particular Sections 31, 32, 34, 35 and 40 of the Act and the Adjudicating Officer (AO) in terms of the powers under Chapter VIII of the Act and in particular Sections 71 and 72 thereof. Appeals against the orders passed by the Authority and the AO are maintainable before the Appellate Tribunal constituted under Section 43 of the Act. Against the orders of the Appellate Tribunal an appeal is provided to the High Court under Section 58 of the Act. This then completes the hierarchical arrangement of the adjudicatory mechanisms under the Act. Later in this judgment, the Court proposes to discuss the particular provisions of the Act pertaining to the constitution and functions of the Authority as well as the Appellate Tribunal, since that forms the central issue in these matters. However, in order to appreciate the scheme of the Act, and the remedies available thereunder, it is necessary to have an overview of some of its key provisions.
4. The Act spells out the obligations of the promoter of a real estate project and the consequences for failing to fulfil those obligations. Some of those obligations are spelt out in Sections 11, 12 to 18 of the Act. Section 18 of the Act talks of the consequence of the failure by the promoter to complete or to be unable to give possession of an apartment, plot or building either in terms of the agreement for sale or failure to complete the project by the date specified therein or on account of discontinuance of his business either on account of suspension or revocation of the registration under the Act or for any other reason. In the event of either of the above contingencies under Section 18 (1)
(a) of the Act, the promoter is made liable on the demand of the allottee:
(i) in the event that the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by the promoter in respect of that apartment, plot, building, as the case may be, together with interest at such rate as may be prescribed "including compensation in the manner as provided under this Act";
(ii) Where an allottee does not intend to withdraw from the project the promoter shall pay him for every month's delay in the handing over of the possession, interest at such rate as may be prescribed.
5. Section 18 (2) of the Act mandates that in case loss is caused to an allottee due to the defective title of the land, on which the project is being developed or has been developed, the promoter shall compensate the allottee and that such claim for compensation under Section 18 (2) shall not be barred by limitation provided under any law for the time being in force. Section 18 (3) of the Act states that where the promoter fails to discharge any other obligations under the Act or the Rules or Regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, the promoter shall be liable to pay "such compensatio
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