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2024 Supreme(P&H) 1026
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ARUN PALLI, VIKRAM AGGARWAL, JJ.
Vrinda Krishna Realtech Private Limited – Petitioner
Versus
State of Punjab & Ors. – Respondents
CWP-7734 of 2024
Decided On : 01-07-2024
Mrs. Sonia Madan, Advocate; For the Petitioner
Mr. Vipin Pal Yadav, Additional Advocate General, Punjab.
The court upheld the validity of the pre-deposit requirement under Section 43(5) of the RERA Act, emphasizing that the petitioner failed to demonstrate exceptional hardship warranting a waiver.
Headnote:(A) Real Estate Regulatory Authority Act, 2016 - Section 43(5) - Writ petition for waiver of pre-deposit of penalty amount - Petitioner, a promoter, challenged the imposition of penalty of Rs. 50 lakhs imposed ex parte for non-compliance with RERA provisions - Court upheld the validity of pre-deposit requirement, citing Supreme Court precedents - No exceptional hardship demonstrated by the petitioner. (Paras 6, 8, 10, 12, 14)
(B) Judicial Discretion - The court emphasized that while exercising powers under Article 226, the High Court can intervene in exceptional cases of genuine hardship, but the petitioner failed to establish such circumstances. (Paras 10, 15)
Facts of the case:
The petitioner, a promoter, sought to challenge a penalty imposed by RERA for non-compliance with licensing requirements, claiming the penalty was imposed without proper notice and that the project was never initiated.
Findings of Court:
The court found no merit in the petition, affirming the imposition of the penalty and the requirement for pre-deposit as lawful.
Issues: The main issues included the legality of the penalty imposed and the necessity of pre-deposit for appeal under RERA.
Ratio Decidendi: The court ruled that the obligation of pre-deposit under Section 43(5) is valid and does not violate constitutional rights, emphasizing that the petitioner’s failure to respond to prior notices justified the penalty.
Result: Writ petition dismissed.
JUDGMENT
Vikram Aggarwal, J.
The petitioner prays for the issuance of a writ of mandamus commanding respondent No.4 to entertain the appeal to be filed by the petitioner under Section 43 of the Real Estate Regulatory Authority Act, 2016 (for short "the RERA Act"), without insisting upon pre-deposit of 30% of the penalty amount.
2. The petitioner is a promoter and was developing a residential colony in Village Mamoon, Tehsil and District Pathankot pursuant to a licence having been granted to it on 28.10.2013 (Annexure P-5). A criminal complaint was filed by the Real Estate Regulatory Authority, Punjab (for short the "RERA") against the director of the petitioner company. As per the averments in the writ petition, a recovery notice dated 16.05.2023 (Annexure P-9) was received by the petitioner company for recovery of Rs. 50 lakhs purported to have been imposed upon the petitioner vide order dated 15.07.2019 (Annexure P-10).
3. The case set up by the petitioner company is that the said order dated 15.07.2019 was an ex parte order and even the proceedings were ex parte and the petitioner was not served at any point of time.
4. A response dated 30.05.2023 (Annexure P-15) was submitted to the recovery notice, which was, however, summarily rejected on 20.07.2023 (Annexure P-16).
5. The petitioner had moved an application for surrender of the licence since the project land was never put to sale and no third party rights were created by the petitioner. The said application was accepted vide order dated 29.12.2023 (Annexure P-17). The petitioner filed CWP-2338-2024 before this Court, challenging the recovery notice dated 16.05.2023, which was, however, withdrawn on 05.02.2024 (Annexure P-18) in order to prefer an appeal as envisaged under Section 43(5) of the RERA Act. However, upon obtaining legal advice, it came to the notice of the petitioner that a pre-deposit of 30% of the penalty imposed was required to be made at the time of filing of the appeal, which was out of reach of the petitioner and has, therefore, led the petitioner to file the instant writ petition to waive off/reduce the amount of pre-deposit for preferring the appeal.
6. Mrs. Sonia Madan, learned counsel representing the petitioner strenuously urged that since the petitioner company had not carried on with the project, had not created any third party rights and even the request for cancellation of the licence had been accepted, the imposition of penalty of Rs. 50 lakhs, being totally illegal and arbitrary and having been imposed in ex parte proceedings, the same is gravely harming the rights of the petitioner company and, therefore, under the circumstances, it would be in the interest of justice that the condition requiring pre-deposit of 30% at the time of preferring an appeal is waived of. Learned counsel made efforts to convince the Court that under the peculiar facts and circumstances of the case where pre-deposit would cost undue hardship, this Court has ample powers to waive off or reduce the amount of pre-deposit. In support of her case, learned counsel placed reliance upon Gautam U. Nambisan v. Interim Real Estate Regulatory Authority (RERA Appeal No.22 of 2018 (CH-I), decided on 26.10.2018), Lotus Realtech Pvt. Ltd. v. State of Haryana (CWP-15205-2020, decided on 23.09.2020), Ramprastha Promoters and Developers Pvt. Ltd. v. Union of India (CWP-6688-2021, decided on 13.01.2022, M/s Shrivision Towers Pvt. Ltd. v. Karnataka Real Estate Regulatory Authority (Appeal (K-REAT) No.266-2020, decided on 19.08.2021 and Nirmal Singh v. State of Punjab (CWP-17133-2020, decided on 16.02.2021).
7. We have considered the submissions made by learned counsel for the petitioner but find no reason to interfere.
8. Before adverting to the merits of the case, it would be essential to notice that the validity of Section 43(5) of the RERA Act, has been upheld by the Supreme Court of India in the case of M/s Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. and others, 2022(
