Case -7.  

Manohar Infrastructure and Constructions Private Ltd v. Sanjeev Kumar Sharma & Ors.; Citation: LL 2021 SC 714]

Decided on December 2021

Legal Point

Whether NCDRC is within jurisdiction to order for deposit of entire amount Determined by SCDRC for Stay  

Facts

An order was passed by NCDRC against the Construction Company in appeal to deposit entire amount determined By SCDRC while granting stay. Builder party to dispute along with number of other builders including TDI against whom similar cases were also going on with NCDRC protested against this order stating 50% of decrial amount has already been deposited as per the provisions of the Act

Supreme Court gave its verdict on two points;

1.      There is a mandatory provision in the act to deposit 50% of decrial amount which had been followed by the Builders and appeal had been accepted

2.      Construction Company requested for stay on implementation of the order by state commission. National commission looked into the facts and circumstances of the case and used its discretion to impose a condition of depositing entire amount determined by state commission in its order for granting stay.

 Supreme Court held this was done under the discretionary power vested with NC and it has to do nothing with mandatory requirement of depositing 50% of determined amount by State Commission. Construction Company cannot say that depositing 50% amount gives them write to get stay

Supreme Court also referred to its earlier decided case wherein it was held that courts can impose any condition to grant stay on implementation of order from lower court

 

Case-8.

 M/s Sheth M L Vaduwala Eye Hospital Versus Oriental Insurance Company Limited and Others SC JUDGMENT  by J. Dr Dhananjaya Y Chandrachud, J. Dt 11 Dec 2021.,

Legal point

Whether insurance company is liable to indemnify hospital when hospital not insured and insured doctors not made party

Facts

M/s Sheth M L Vaduwala Eye Hospital a charitable hospital registered under the Bombay Public Trust Act 1961. Conducted an eye camp where cataract surgeries were performed on 112 patients. Negligence was alleged in the performance of the surgeries by the use of non-sterilized appliances, contaminated medicines and lenses of an inferior quality resulting in eye infections and loss of vision. The District Forum by its order dated 19 February 2010 awarded an amount of Rs. 1,70,000 as compensation to each of the twenty-four complainants together with a refund of registration fees (Rs. 250), compensation for mental agony (Rs 3000), costs (Rs 1500) and interest at the rate of 9% per annum. State Government also found that there was negligence

The NCDRC held that this fact could not by itself fasten the liability on the insurer, particularly in the absence of any specific allegation of negligence against any of the doctors who are actually insured the insurance policies were obtained by the doctors. These were professional indemnity insurance policies which would cover a claim for professional negligence which was made against the doctors. State Commission confirms negligence, specifically against the hospital which is not insured. In a medical Negligence case an insurance policy taken by doctors for professional indemnity can’t be used to make insurance Co pay the liability of compensation to patients on behalf of the hospital.SC confirms the order of NCDRC and dismiss SLP filed by hospital

Case-9.

M/S. Newtech Promoters And Developers Pvt. Ltd.Versus State Of Up & Ors.

Civil Appeal No(S). 6753 Of 2021 (Arising Out Of SLP(Civil) No(S). 3426 Of 2021)

Judgment  Dt 11 Nov 2021. 

The common issues is regarding certain provisions of The Real Estate (Regulation and Development) Act, 2016(hereinafter being referred to as “the Act”), The Uttar Pradesh

Legal Point

1.      Whether the RERA Act 2016 is retrospective or retroactive in its nature.

2.      Whether the authority has jurisdiction to direct return/refund of the amount to the allottee under the Act or the jurisdiction exclusively lies with the adjudicating officer under Section 71 of the Act?

3.      Whether Section 81 of the Act authorizes the authority to delegate its powers to a single member of the authority to hear complaints instituted under Section 31 of the Act?

4.      Whether the authority has power to issue recovery certificate for recovery of the principal amount under Section 40(1) of the Act?

Facts

·         The promoters failed to hand over possession of a unit/plot/building in terms of the agreement and complaints were instituted by the home buyers for refund of the investment made along with interest. Order was passed by the single member of the authority after hearing the parties with the direction to refund the principal amount along with interest

·         The order passed by the authority is appealable under Section 43(5) of the Act subject to compliance of pre­deposit under Section 43(5) before the Appellate Tribunal. But the promoter/real estate developers approached the High Court by filing a writ petition under Articles 226 and 227 of the Constitution questioning the order passed by the authority holding it to be without jurisdiction it has been passed by a single member of the authority having no jurisdiction to pass such orders of refund of the amount as contemplated under Section 18 of the Act. They also challenged the condition of pre­deposit as envisaged under proviso to Section 43(5) of the Act

·         High Court of Allahabad dismissed their writ stating they have no jurisdiction, hence  the present batch of appeals have been preferred by the promoters

SC holds

Issue -1. Regarding the retroactive application of the provisions of the Act 2016 with reference to the ongoing projects ,Court held   that the Parliament in its wisdom after holding extensive deliberation on the subject thought it necessary to have a central legislation in the paramount interest for effective consumer protection, uniformity and standardisation of business practices and transactions in the real estate sector, to ensure greater accountability towards consumers and in view of the objective of the act ,ongoing projects are also brought under the provisions of the act  

Issue -2 Jurisdiction of authority to direct return/refund of the amount to the allottee under Sections 12, 14, 18 and 19 of the Act. 

Refereed law In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee who wishes to withdraw from the Project.”. Referred case Imperia Structures Ltd. Vs.  Anil Patni and Another held that Section 18 confers an unqualified right upon an allottee to get refund of the amount deposited with the promoter and interest at the prescribed rate, if the promoter fails to complete or is unable to give possession of an apartment as per the date specified in the home buyer’s agreement

Issue-3 Regarding delegation of power o single judge

Sec.29. (2) If the Chairperson for any reason, is unable to attend a meeting of the Authority, any other Member chosen by the Members present amongst themselves at the meeting, shall preside at the meeting.

In the instant case, the authority by a special order dated 5^th December, 2018 has delegated its power to the single member for disposal of complaints filed under Section 31 of the Act.  So far as refund of the amount with interest is concerned, it may not be considered strictly to be mechanical in process. If power has been delegated by the authority, to be exercised by the single member of the authority in exercise of its power under Section 81 of the Act that cannot be said to be against the provisions of the Act.

Issue -4 whether the authority has the power to issue recovery certificates for recovery of the principal amount under Section 40(1) of the Act?

40     Recovery of interest or penalty or compensation and enforcement of order, etc.—

(1)If any adjudicating officer or the Regulatory Authority or the Appellate Tribunal, as the case may be, issues any order or directs any person to do any act, or refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder, then in case of failure by any person to comply with such order or direction, the same shall be enforced, in such manner as may be prescribed.”

The principal sum with interest has become a composite amount to be recovered as arrears of land revenue under Section 40(1) of the Act.

Supreme Court finally settled all the issues related to real estate act in this case which is landmark judgment of the year 2021

Case -10.

Union Bank of India vs. Rajasthan Real Estate Regulatory

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

 D.B. Civil Writ Petition No. 13688/2021

Bench: Akil Kureshi, Uma Shanker Vyas

Decided on 14 December, 2021

Legal point

·         Whether RERA have any jurisdiction over the bank as banks do not fall under the definition of ‘Promoters’ for the purpose of RERA Act.

·         Whether the RERA would prevail over SARFAESI.

·         Whether the single member of RERA is competent to hear and decide the complaints filed before the authority.

Facts

An under construction residential complex project  titled ‘Sunrisers’ building was mortgaged by the developer to Union Bank of India (Erstwhile Andhra Bank), for obtaining a term loan of Rs. 15 crore, several flats were already booked by the allottees even before the said term loan.

Due to non-repayment of the said loan by the promoters, the entire project building was attached by the Union Bank of India and initiated auction of the building to recover the loan amount. Homebuyers contacted RERA Rajasthan & RERA in its judgment cancelled the auctions proceedings of the bank and ordered the bank to hand over the possession of the flat to RERA, which would get the project completed at its own level.

The Union Bank of India challenged the order by stating that the RERA does not have any jurisdiction over the bank as banks do not fall under the definition of ‘Promoters’ for the purpose of RERA Act. Bank is neither Promoter /agent of promoter nor a homebuyer.

That the recovery proceedings of the bank under special act SARFAESI meant to recover their unpaid dues, cannot be halted by RERA

That the single member of RERA is not competent to hear and decide the complaints filed before the authority.

Order by H.C.

The divisional bench of High Court of Rajasthan comprising Chief Justice Akil Kurashi and Justice Uma Shankar Vyas decided the writ petitions filed by the Union Bank of India against the order passed by Rajasthan RERA with the following observations -

That pursuant to taking possession of the project, the bank enters into the shoes of the promoter and becomes the assignee of the promoter and thus, amenable to jurisdiction of RERA.

The rights of the allottees are considered of paramount importance by court and it would confer wide powers to RERA. The RERA would prevail over Securitisation and Reconstruction of Financial Assets and  Act, 2002 (hereinafter to be referred as 'SARFAESI Act') the rights of the real estate allottees shall not be subservient to that of Bank and cannot be infringed by the bank while exercising its legal rights.

It was further held that the single member of RERA is competent to hear and decide the complaints filed before the authority.

This judgment by High Court of Rajasthan is an outstanding consumer jurisprudence

 

Dr Prem Lata

 

 

 

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