M/S Elegant Infracon Pvt. Ltd. vs State Of U.P. And 5 Others
2021 Latest Caselaw 1732 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. - 40 
 
Case :- WRIT - C No. - 60 of 2021 
 
Petitioner :- M/S Elegant Infracon Pvt . Ltd. 
 
Respondent :- State Of U.P. And 5 Others 
 
Counsel for Petitioner :- Saumitra Dwivedi 
 
Counsel for Respondent :- C.S.C.,Wasim Masood 
 
Hon'ble Munishwar Nath Bhandari,J. 

Hon'ble Rohit Ranjan Agarwal,J.

Heard Sri Sarvesh Tiwari, learned counsel for the petitioner and Sri Washim Masood, learned counsel for the respondent.

The writ petition has been filed with the following prayers:

"(i) Issue a writ, order or direction in the nature of Certiorari quashing the order dated 30.10.2019 passed by respondent No.4 (contained as Annexure No.1)

(ii) Issue a writ, order or direction in the nature of Certiorari quashing the resolution dated 14.08.2018 and 05.12.2018 passed by respondent No.4 (contained as Annexure-4).

(iii) Issue an appropriate writ, order or direction for striking down Regulation 24(a) of the U.P. Real Estate Regulatory Authority (General) Regulation, 2019.

(iv) Issue any other suitable writ order or direction which this Hon'ble Court deems fit and proper under the facts and circumstances of the case.

(v) Award cost of the writ petition to the petitioner throughout"

The petitioner has challenged the order passed by Real Estate Regulatory Authority (in short "RERA") dated 31.10.2019 (wrongly mentioned as 30.10.2019 in the prayer clause (i)) 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. F-1803 in the scheme introduced by the petitioner, the possession of a unit has not been given. The unit (flat) was booked on 06.05.2015 and was to be delivered in the year 2018. The prayer was made for refund of the amount of Rs. 34,23,025/- 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 06.04.2018. 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 31.10.2019 for refund of the principal amount alongwith interest. The petitioner has filed this writ petition to challenge not only the order dated 31.10.2019 passed by RERA but the resolutions dated 14.08.2018 and 05.12.2018. The petitioner has not challenged the recovery citation dated 07.09.2020.

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 31.10.2019 is without jurisdiction.

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.

We are first taking challenge to the order dated 31.10.2019, passed by the Authority to find out as to whether one member was competent to pass the order.

The issue has been raised in reference to Section 21 but it is not open for debate having been decided by this Court in Writ -C No.2248 of 2020 (M/s K.D.P. Build Well Pvt. Ltd. vs. State of U.P. and 4 Others) vide judgment dated 04.02.2020 and in Writ- C No.3289 of 2020 (Rudra Buildwell Constructions Pvt. Ltd. vs. Poonam Sood and Another) vide judgment dated 06.02.2020 holding order by one member to be legal. The issue regarding composition of RERA was considered in reference to Sections 21 and 81 of the Act of 2016. Section 81 provides for delegation of power/function and taking the aforesaid provision into consideration, the argument was not accepted.

At this stage, learned counsel for the petitioner has made a reference to the judgment of Punjab and Haryana High Court on the same issue in Civil Writ Petition No.8548 of 2020 (Janta Land Promoters Private Limited vs. Union of India and others) vide judgment dated 16.10.2020. It is stated that judgment of this Court has been referred by Punjab and Haryana High Court and has taken a different view.

What we find is binding effect of the judgment rendered by this Court than to follow the judgment of other High Court. Accordingly, we are unable to accept the first argument in reference to Section 21 of the Act of 2016. It is more so when the petitioner did not raise objection before the single Member about his competence to adjudicate the complaint. In absence of objection, the Authority proceeded with the matter. If the objection would have been taken and was sustainable, the complaint could have been decided by the Authority consisting of three Members. The petitioner has challenged the order in reference to the composition only when he lost in the complaint.

It is further necessary to refer Sections 21, 29 and 30 of the Act of 2016 to discuss the issue independent to the earlier judgments. The provisions aforesaid are quoted hereunder :

"21. Composition of Authority.- The Authority shall consist of a Chairperson and not less than two whole time Members to be appointed by the appropriate Government."

29. Meeting of Authority.- (1) The Authority shall meet at such places and times, and shall follow such rules of procedure in regard to the transaction of business at its meetings, (including quorum at such meetings), as may be specified by the regulations made by the Authority.

(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.

(3) All questions which come up before any meeting of the Authority shall be decided by a majority of votes by the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the person presiding shall have a second or casting vote.

(4) The questions which come up before the Authority shall be dealt with as expeditiously as possible and the Authority shall dispose of the same within a period of sixty days from the date of receipt of the application.

Provided that where any such application could not be disposed of within the said period of sixty days, the Authority shall record its reasons in writing for not disposing of the application within that period.

30. Vacancies, etc., not to invalidate proceeding of Authority.- No act or proceeding of the Authority shall be invalid merely by reason of--

(a) any vacancy in, or any defect in the constitution of, the Authority; or

(b) any defect in the appointment of a person acting as a Member of the Authority; or

(c) any irregularity in the procedure of the Authority not affecting the merits of the case."

Section 21 of Act of 2016 speaks about composition of the Authority, which shall consist of a Chairperson and not less than two whole time Members to be appointed by the appropriate Government. Section 29, however, talks about the meeting of Authority and perusal of sub-section (2) thereof shows that in absence of Chairperson for any reason, the other Member chosen by the Members present amongst themselves at the meeting, shall preside thereby. Sub-section (2) to Section 29 permits adjudication of complaint even in absence of Chairperson so appointed by the appropriate Government. Thus, it is not necessary that the adjudication of the complaint has to be made by the composition of Authority, as given under Section 21 of the Act of 2016 though as per Section 29 also, it should be by two Members in absence of the Chairperson.

Section 30 of Act of 2016 is, however, relevant and address the issue raised in this petition. The vacancies, etc. not to invalidate proceeding of the Authority. It shows that in case of vacancy, or any defect in the constitution of the Authority or any defect in the appointment of a person acting as a Member of the Authority, the proceeding of the Authority would not be invalidated. Section 30 of the Act of 2016 give complete answer to the objection raised by the petitioner regarding composition of the Authority. It is not that whatever composition given under Section 21 of the Act alone can decide the complaint rather reference of Section 29 has been given to indicate that complaint can be heard even in absence of the Chairperson and, in any case, due to the vacancy or any defect in the constitution of Authority, the proceeding would not be invalidated. This aspect was not brought to the notice of Punjab and Haryana High Court in the case of Janta Land Promoters Private Limited (supra).

It is otherwise a fact that the petitioner kept silence on the hearing of the complaint by one Member and thereby he cannot now be allowed and to seek invalidation of the proceeding going contrary to Section 30 of the Act of 2016 and his conduct. The first argument cannot be addressed simply by referring to Section 21 of the Act of 2016 but has to be reference of other provisions, more specifically, Section 30 of the Act of 2016, which was inserted by the legislature to save the proceeding if the vacancy exist in the Authority or other reason. It is otherwise a fact that an order was issued to delegate the power to a Member for hearing of the complaint, which was considered by this Court in earlier judgment. The challenge to the resolution would not otherwise sustain in the light of Section 30 and 81 of the Act of 2016. The resolution to authorize one member is even saved by Section 30 of the Act of 2016.

Accordingly, we are unable to accept the argument raised by the counsel for the petitioner. It would otherwise frustrate the very object of the Act of 2016 and would give rise to the anarchy, existing earlier, in the hands of Promoters.

So far as challenge to Rule 24 (a) of U.P. Real Estate Regulatory Authority (General) Regulation, 2019 is concerned, the issue is kept open. It has not been debated for the reason that an order of the nature provided under Regulation 24 (a) has not been passed in the case in hand. Thus, there is no occasion for the petitioner to challenge the vires of the said Regulation in these proceedings However, as and when the Authority invokes Regulation 24 (a) of Regulation, 2019, the liberty is given to challenge the validity. Thus, issue is kept open for the aforesaid.

Thus, for all the reasons, we are unable to accept any of the arguments raised by the counsel for the petitioner. The writ petition is accordingly dismissed, however, with the liberty to avail the remedy of appeal if other than the issue decided by us remains, which may include the issue towards interest.

Order Date :- 29.01.2021

Nirmal_Sinha