Ajit Ghosh & Ors vs The State Of West Bengal
2023 Latest Caselaw 741 Cal

               IN THE HIGH COURT AT CALCUTTA
                      Constitutional Writ Jurisdiction
                              Appellate Side


Present :-

The Hon'ble Justice Moushumi Bhattacharya.

                           W.P.A 16364 of 2022

                             Ajit Ghosh & Ors.

                                     vs.

           The State of West Bengal, Housing Department & Ors.


For the petitioners                            :   Mr. S. K. Banerjee, Adv.
                                                   Mr. Diptamoy Talukder, Adv.
                                                   Ms. Chanchala Chatterjee, Adv.
                                                   Mr. Abhiraj Tarafdar, Adv.


For the State                              :       Mr. Amal Kumar Sen, Adv.
                                                   Mr. Lal Mohan Basu, Adv.


For the respondent no. 5                   :       Mr. Prodyut Banerjee, Adv.
                                                   Mr. Subhendu Bhattacharjee, Adv.
                                                   Mr. Dhrubaraj Bhowmik, Adv.


Last Heard on                                  :   18.01.2023.



Delivered on                                   :   25.01.2023.
                                       2




Moushumi Bhattacharya, J.

1. The petitioners are developers who executed an Agreement for Sale

on 30.11.2016 between the partnership firm of which the petitioners are

partners and the private respondent no. 5 for sale of a flat in a proposed

building on the Durgapur Expressway, Dankuni, Hooghly. The short point

for adjudication is whether a Certificate proceedings against the petitioners

for payment of Rs. 45,73,822/- can survive or continue in light of a

Supreme Court judgment pronounced on 4th May, 2021 striking down the

West Bengal Housing Industry Regulation Act, 2017 (HIRA) as being

repugnant to the Real Estate (Regulation and Development) Act, 2016

(RERA).

2. The petitioners, through learned counsel, urge that the Certificate

proceedings against the petitioners being Certificate Case No. 160(M)/ 2020-

2021 cannot survive after the judgment of the Supreme Court.

3. Learned counsel appearing for the State as well as the private

respondent contend otherwise. Counsel say that the judgment of the

Supreme Court only saved registrations, sanctions and permissions which

were granted under HIRA prior to the date of the judgment.

4. The petitioners admittedly received a sum of Rs. 20 lacs from the

private respondents on 3rd December, 2016 and 20th June, 2017 for sale of

the concerned flat. The Agreement for Sale is dated 30th November, 2016.

The petitioners admittedly failed to hand over possession of the flat to the

private respondents. The private respondents hence filed a complaint before

the West Bengal Housing Industry Regulatory Authority in 2018 and by an

order dated 31st May, 2019, the petitioners were directed to refund the

entire amount of Rs. 20 lacs along with interest at the State Bank of India

prime lending rate + 2% per annum under Rule 18 of the Housing Industry

Regulation Rules, 2018. The private respondent thereafter filed for execution

of the aforesaid order and by an order dated 7th January, 2020, the

designated authority under HIRA directed Secretary, HIRA to communicate

the order to the District Collector, Hooghly for initiating a case of recovery

against the petitioners. The Certificate Officer under the Bengal Public

Demands Recovery Act, 1913 thereafter proceeded to pass a detailed order

on 25th March, 2022 enclosing the particulars of the default on the part of

the petitioners and directed the petitioners to pay the certificate amount of

Rs. 45,73,822/- to the private respondent within 2nd April, 2022.

5. The petitioners have challenged the Certificate Case and the direction

passed on the petitioners on 25th March, 2022 in the said case. The sole

ground for challenging the impugned order is the judgment of the Supreme

Court whereby WB-HIRA was struck down.

6. The impugned order of 25th March, 2022 passed in the Certificate

Case contains a detailed statement which shows that the petitioners

received an amount of Rs. 20 lacs from the respondent no. 5 on 3rd

December, 2016 and on 22nd June, 2017. Interest has been calculated from

these two dates at the SBI prime lending rate + 2% translating to Rs.

8,39,023/- and Rs. 7,51,799/- respectively. Penalty at the rate of Rs.

1000/- day was calculated from 15th July, 2019 in terms of the order passed

by the Designated Authority under HIRA on 31st May, 2019. The penalty

amount translated to Rs. 9,83,000/-. The liability towards interest at the

SBI prime lending rate as well as the penalty have been calculated under

sections 40(1) and 62 of HIRA and Rule 18 of the West Bengal Housing

Industry Regulation Rules, 2018. The sections impose monetary liability on

a real estate agent/promoter for contravention of provisions relating to

registration, sale and purchase of plots, apartments or building and unfair

trade practices relating to such. Rule 18 specifies the rate of interest payable

by the promoter to the allottee or vice versa at the SBI prime lending rate +

2% per annum in case of delay of payment by the allottee and delay on

handing over the possession by the promoter as the case may be. Hence, the

impugned order passed in the Certificate proceedings is accordance with

HIRA and the 2018 Rules.

7. The only question is whether this order can survive after the

pronouncement of the Supreme Court on 4th May, 2021 in Forum For

People's Collective Efforts (FPCE) vs. State of West Bengal; (2021) 8 SCC 599.

8. Paragraph 185 of the said decision is material for this adjudication

and is set out below.

"185. Since its enforcement in the State of West Bengal, the WB-HIRA would have been applied to building projects and implemented by the authorities constituted under the law in the State. In order to avoid uncertainty and disruption in respect of actions taken in the past, recourse to the jurisdiction of this Court under Article 142 is necessary. Hence, in exercise of the jurisdiction under Article 142, we direct that the striking down of WB-HIRA will not affect the registrations, sanctions and permissions previously granted under the legislation prior to the date of this judgment."

9. The above paragraph makes it clear that only registrations, sanctions

and permissions namely steps taken in aid of allotment, delivery and

possession of flats/immovable property which were granted under HIRA

prior to the judgment, would remain undisturbed. The paragraph further

indicates that the Supreme Court intended to preserve such actions taken

under the HIRA for the sake of continuity and to protect the rights and

processes which had already accrued in favour of the allottees and

developers. The impugned order or the Certificate Case which is under

challenge in this writ petition cannot come under any of the three specific

areas mentioned in paragraph 185 since the petitioners (developers) have

been made liable for breach/non-performance of their contractual

obligations and directed to pay an amount on that basis to the private

respondent for failing to hand over possession of the flat. Stretching

paragraph 185 of Forum for People's Collective Efforts to include a penalty for

a wrong done would be contrary to the import of the Supreme Court as

expressed in the said paragraph. The dictum of the Supreme Court in

Kailash Chand Sharma vs. State of Rajasthan; (2002) 6 SCC 562 namely on

prospective application of judgments is not relevant in this case since the

entire issue revolves around paragraph 185 of Forum for People's Collective

Efforts.

10. Besides, the orders passed by the authorities from 31st May, 2019 to

7th January, 2020 as well as 25th March, 2022 unequivocally record that the

petitioners (respondents before the authorities) deliberately failed to appear

of any of the dates before the authorities. Further, all the proceedings save

and except the final order of the Certificate Officer were passed before the

pronouncement of the Supreme Court in Forum for People's Collective

Efforts.

11. It is also relevant to record that counsel appearing for the petitioners

expressed his disinclination to approach the Supreme Court for a

clarification on paragraph 185 of the judgment and seeks an adjudication

on the issue from the Court. Hence, the reliance placed by counsel on the

order passed by a Coordinate Bench in WPA 19940 of 2021 loses relevance.

12. In view of the above reasons, this Court does not find any ground to

allow the writ petition or the prayers contained therein namely dismissal of

the Certificate Case against the petitioners. WPA 16364 of 2022 is

accordingly dismissed without any order as to costs.

Urgent photostat certified copies of this judgment, if applied for, be

supplied to the parties upon fulfillment of requisite formalities.

(Moushumi Bhattacharya, J.)