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1. Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor (Civil Appeal No. 6044 of 2019 and Civil Appeal No. 7149 of 2019), April 07, 2022, In the Supreme Court of India

Facts:

Sushma Ashok Shiroor had booked an apartment from Experion Developers in Sector 112, Gurugram, Haryana, but the possession was not delivered within the stipulated time, so she approached the NCDRC seeking a refund along with interest. NCDRC observed that the Agreement was one sided and in the favor of  Experion. The NCDRC directed Experion to refund the amount and pay interest @ 9% p.a. vide judgement dated June 19, 2019 Aggrieved by the aforesaid decision of the NCDRC, Experion filed an appeal before the Hon'ble Supreme Court. Sushma also filed an appeal seeking interest at a higher rate.

Held:

1. Consumer Courts have the authority to set aside agreements between builders and homebuyers if the clauses in the agreements are one-sided. A homebuyer is not bound to accept ownership of the apartment and may seek a refund of the amount paid, with interest; 

2. The Consumer Courts have the power and jurisdiction to direct return of the money if a homebuyer so elects. The Consumer/homebuyer has the right to pick the appropriate relief, and the Courts must respect that right.

3. The Consumer Protection Act, 1986 and the Real Estate (Regulation and Development) Act, 2016 do not exclude or contradict one another, and both must be read harmoniously to subserve their common purpose.

2. Union Bank of India Vs. Rajasthan Real Estate Regulatory Authority & Ors. etc., Petition for Special Leave to Appeal (C) Nos.1861-1871/2022, The Supreme Court of India

Facts:

In this case, the Rajasthan High Court judgment which held that the Real Estate Regulatory Authority can entertain complaints by home buyers against the bank which took possession of a real estate project as a secured creditor was challenged.

Held:

The Supreme Court observed that it is in complete agreement with the view taken by the High Court by which the High Court has ultimately concluded in para 36, as under -“36. Our conclusions can thus be summarised as under:-

(i) Regulation 9 of the Regulations of 2017 is not ultra vires the Act or is otherwise not invalid.

(ii) The delegation of powers in the single member of RERA to decide complaints filed under the Act even otherwise flows from Section 81 of the Act and such delegation can be made in absence of Regulation 9 also.

(iii) As held by the Supreme Court in the case of Bikram Chatterji (supra) in the event of conflict between RERA and SARFAESI Act the provisions contained in RERA would prevail.

(iv) RERA would not apply in relation to the transaction between the borrower and the banks and financial institutions in cases where security interest has been created by mortgaging the property prior to the introduction of the Act unless and until it is found that the creation of such mortgage or such transaction is fraudulent or collusive.

(v) RERA authority has the jurisdiction to entertain a complaint by an aggrieved person against the bank as a secured creditor if the bank takes recourse to any of the provisions contained in Section 13(4) of the SARFAESI Act.”

However, it is clarified that para 36(v) reproduced hereinabove shall be applicable in a case where proceedings before the RERA authority are initiated by the home buyers to protect their rights. With this, the Special Leave Petitions are dismissed.

3. Court on Its Own Motion vs. Govt of NCT of Delhi & Ors., W.P.(C) 9550/2019, Date of decision: 13th MARCH , 2023, Delhi High Court

Facts:

Delhi Hon’ble Court was pleased to convert a letter of one Sh. Vinod Kumar Naugain into the present writ petition, in the nature of a Public Interest Litigation. Through the letter, the Complainant before this Court seeks the issuance of directions to the Central Government to draft and implement a comprehensive scheme to address the grievances of home buyers availing home loans, including those buyers who haven’t been given possession of their flats by their builders and are still paying monthly installments towards EMI payment, and are thus unable to claim tax benefits on the payment of such monthly interest amounts. The Complainant prays for the formulation and implementation of a scheme that conclusively addresses the grievances of other home buyers who may not have the capacity to approach courts/forums to seek redressal against builders.

Held:

When the projects proponent defaults in completing a project, it is always open for the banks to approach the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for getting a Insolvency and Resolution Professional appointed and to take measures to ensure that project is revived and the project is completed because the banks are also anxious to recover their money. The entire problem that has been projected by the Complainant has to be looked into to safeguard the interests of the home buyers and also the banks who deal with public money, and the banks cannot be converted into developers and builders or an authority on whom the responsibility is loaded to ensure that the project is completed. Other than the remedies in Insolvency and Bankruptcy Code, 2016, it is always open for the home buyers to approach the Real Estate Regulatory Authority (RERA) to ensure that the project is completed.

In view of the fact that there is a proper regimen available to redress the grievances of a home buyer and also in view of the Master Circular issued by the Reserve Bank of India, no further Orders and directions are required to be passed in the instant petition. With the abovementioned observations, the present petition stands dismissed, along with application(s), if any.

4. M/S. Provident Housing Limited v. Karnataka Real Estate Regulatory Authority & ANR., WRIT PETITION No.18448 OF 2021, Karnataka High Court

Facts:

The petitioner, a real estate developer, entered into an agreement for sale and construction with the respondent for an apartment in a project. The project had a proposed completion date of 31/01/17, and partial occupancy certificates were granted to the petitioner in 2015 and 2017. The respondent sought to cancel the agreement on the grounds that the land had not been legally acquired for the project, and the petitioner refunded the amount after deducting cancellation charges. In 2019, the respondent filed a complaint before the RERA Authority seeking a refund of the remaining amount, which was granted by the authority. The petitioner challenged the maintainability of the complaint before the Karnataka High Court.

Held:

It was noted that The Real Estate (Regulation and Development Act, 2016 (‘the Act’ for short) comes into force on 01-05-2016 and the Rules thereunder were notified on 10-07-2017. Section 84 empowers appropriate Government to make Rules. “Among other things clause (v) of Rule 4 therein exempts rigour of the Act and the Rules where partial occupancy certificate is obtained to the extent of the portion for which occupancy certificate is issued, therefore, the Rule itself recognizes the situation of issuance of partial occupancy certificate on the exemption with the applicability of the Act and the Rules or the conditions stipulated therein. It is in the aforesaid statutory framework the issue in the list is to be considered.”

The court further said “In view of the preceding analysis, more particularly, with regard to the explanation of ‘ongoing project’ under the Rules which exempts application of the Act and the Rules since the project had commenced and partial occupancy certificate was issued prior to coming into force of the Act, the complaint itself was not maintainable before the Authority. Notwithstanding such exemption, the Adjudicating Authority appears to have been swayed by the grievance vented out by the 2nd respondent in entertaining the complaint.” Therefore, the authority lacked jurisdiction when it issued the order, making it legally invalid.