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2021 Supreme(All) 75

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
MUNISHWAR NATH BHANDARI, ROHIT RANJAN AGARWAL, JJ.
M/s Newtech Promoters And Developers Pvt. Ltd. – Appellant
Versus
State Of U.P. And 4 Others – Respondent
Writ C. No.26451 of 2020
Decided on : 29-01-2021

Advocates:
Advocate Appeared:
For the Appellant : Pratik Chandra
For the Respondent: C.S.C.,Wasim Masood

The main legal point established in the judgment is the interpretation of the provisions of the Act of 2016 in relation to the composition and functioning of the Real Estate Regulatory Authority, and the court's emphasis on the Act's objective to protect consumers' interests and provide a speedy dispute redressal mechanism.

Headnote:

RERA - Real Estate Regulatory Authority - U.P. Real Estate Regulatory Authority (General) Regulation, 2019 - Section 24(a), Section 21, Section 85 of the RERA Act - The court discussed the composition of the Authority, the validity of the order passed by one member, and the recovery of interest or penalty under Section 40 of the Act of 2016. The court highlighted the provisions of Section 21, Section 29, and Section 30 of the Act of 2016, and their interpretations in relation to the composition and functioning of the Authority. The court also emphasized the object of the Act of 2016 to protect the interest of consumers and provide a speedy dispute redressal mechanism.

Fact of the Case:

The petitioner challenged the order passed by the Real Estate Regulatory Authority (RERA) for refund of the principal amount along with interest, and the recovery certificate issued by the opposite party. The complaint was related to non-delivery of possession of a flat booked in 2012, which was to be delivered in 2015.

Finding of the Court:

The court found that the order passed by one member of RERA was valid, and the petitioner's challenge to the rate of interest was not maintainable as the petitioner had the remedy of appeal. The court also held that the recovery of the amount as arrears of land revenue under Section 40(1) of the Act of 2016 was in line with the Act's objective to protect consumers' interests.

Issues: The issues included the validity of the order passed by one member of RERA, the challenge to the rate of interest, and the execution of the recovery certificate under Section 40(1) of the Act of 2016.

Ratio Decidendi: The court interpreted the provisions of Section 21, Section 29, and Section 30 of the Act of 2016 to determine the composition and functioning of the Authority. The court also emphasized the object of the Act of 2016 to protect the interest of consumers and provide a speedy dispute redressal mechanism.

Final Decision: The writ petition was dismissed, with the liberty to avail the remedy of appeal if other issues remained.

JUDGMENT :

1. Heard Sri Manish Singh with Sri Pratik Chandra and Sri Azhar Ikram, learned counsel for the petitioner. Sri Wasim Masood has put in appearance on behalf of respondents.

2. The writ petition has been filed with the following prayers:

    "(i) Issue an appropriate writ, order or direction declaring the section 24(a) of the U.P. Real Estate Regulatory Authority (General) Regulation, 2019 as ultra vires and contrary to the section 21 and 85 of the RERA Act.

(ii) Issue a writ, order or direction in the nature of Certiorari quashing order dated 27.3.2019 passed Regulatory Authority/Bench No. I, U.P. RERA Regional Office, Gautam Budh Nagar, in Complaint No. 12201825459 (Virendra Kumar Vs. M/s Newtech Promoters and Developers Pvt. Ltd.).

(iii) Issue a writ, order or direction in the nature certiorari quashing the impugned Recovery Certificate dated 10.1.2020 issued by opposite party no. 4.

(iv) Issue a writ, order or direction in the nature of mandamus not to give effect the impugned recovery certificate dated 27.3.2019 issued by opposite party no. 4.

(v) Issue a writ, order or direction in the nature of mandamus directing the state respondents not to initiate coercive measures pursuant to the impugned recovery certificate issued by opposite party no. 4."

The petitioner has challenged the order passed by Real Estate Regulatory Authority (in short "RERA") dated 27.3.2019 though an appeal against the said order lies under Section 43(5) of Real Estate (Regulation and Development) Act, 2016 (in short "Act of 2016").

It is a case where a complaint was filed by the non-petitioner alleging that despite payment towards unit No. E-102 in the scheme introduced by the petitioner, the possession of a unit has not been given. The unit (flat) was booked on 25.03.2012 and was to be delivered in the year 2015. The prayer was made for refund of the amount of Rs.27,09,026/- with interest. The Authority found that as per the agreement entered between the parties, possession of the flat in question should have been delivered by 2015. The petitioner-Company failed to show delivery of possession of the flat in question. Thus, taking into consideration the default of the Promoter (petitioner herein) and referring to the judgment of Apex Court, an order was passed by RERA on 27.3.2019 for refund of the principal amount alongwith interest. In pursuance thereof, order dated 27.3.2019 was issued for its execution. The amount of Rs.27,09,026/- was shown towards the principal amount while component of interest was Rs.17,35,581.16/-. The petitioner has filed this writ petition to challenge not only the order dated 27.3.2019 passed by RERA but the recovery certificate dated 10.01.2020 on the execution application.

3. Learned counsel for the petitioner submits that an appeal against the order passed by RERA is maintainable but this case has exceptional circumstances thus even a writ petition would be maintainable. One member of RERA has passed the order going against the Act of 2016. Section 21 provides for formation of Authority consist of Chairperson alongwith two whole time Members. The impugned order is by one Member alone going against the mandate of Section 21 of the Act of 2016. In view of the above, there is no need to prefer an appeal as the order dated 27.3.2019 is without jurisdiction.

4. It is also stated that the order to award interest by the Authority is again going contrary to the provisions. Rules for award of interest was introduced in the year 2018. The amount deposited with the Promotor has been ordered to be returned with interest. The interest has been allowed even for the period prior to introduction of U.P. Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018 (in short "Rules of 2018"). It is even ignoring the rate of interest agreed by the parties. Challenge to the order has been made on that ground also.

5. We are first taking challenge to the order dated 27.3.2019, passed by the Authority to find out as to whether

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