Madras High Court
Army Welfare Housing ... vs Commander N.Koteeswar ...R1 In ... on 21 January, 2021
CMSA.Nos.12 to 14 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 21.1.2021
CORAM
THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM
and
THE HONOURABLE MS.JUSTICE R.N.MANJULA
Civil Miscellaneous Second Appeal Nos.12 to 14 of 2020 and
CMP.Nos.3327, 3343, 3379, 3377, 3393, 14208, 14214 and 14217 of
2020
Army Welfare Housing Organization
(AWHO), rep.by its Managing
Director, New Delhi-110011 ...Appellant in
all the CMSAs
Vs
1.Commander N.Koteeswar ...R1 in CMSA
No.12 of 2020
2.Capt.Nagarajan Vasudeva Rao ...R1 in CMSA
No.13 of 2020
3.Colonel C.M.Unnithan ...R1 in CMSA
No.14 of 2020
4.The Chennai Metropolitan
Development Authority,
Thalamuthu Natarajan House,
No.1, Gandhi Irwin Road,
Egmore, Chennai-8.
(CMDA suo motu impleaded as party respondent vide
court order dated 27.2.2020 by NKKJ and PVJ)
...R-2 in all
the CMSAs
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CMSA.Nos.12 to 14 of 2020
APPEALS under Section 58 of the Real Estate (Regulation &
Development) Act, 2016 read with Section 100 of the Civil Procedure
Code against the common order dated 31.10.2019 made respectively
in Appeal Nos.56, 54 and 53 of 2019 on the file of the Tamil Nadu Real
Estate Appellate Tribunal (Tamil Nadu, Puducherry, Andaman and
Nicobar Island), Chennai reversing the orders dated 21.5.2019 made
respectively in complaint Nos.293, 294 and 291 of 2019 passed by the
Tamil Nadu Real Estate Regulatory Authority (Tamil Nadu Andaman &
Nicobar Islands), Egmore, Chennai.
For Appellant
in all the appeals: Ms.Aparajitha Viswanath
For Respondent-1
in all the appeals : Mr.R.Ramasubramaniam Raja
For the TNRERA : Ms.Varalakshmi
COMMON JUDGMENT
(Judgment was delivered by T.S.SIVAGNANAM,J)
These appeals have been filed by the Army Welfare Housing
Organization (AWHO) under Section 58 of the Real Estate (Regulation
& Development) Act, 2016 (for short, the Act) read with Section 100 of
the Civil Procedure Code (CPC) challenging the common impugned
order dated 31.10.2019 made respectively in Appeal Nos.56, 54 and
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53 of 2019 on the file of the Tamil Nadu Real Estate Appellate Tribunal
(Tamil Nadu, Puducherry, Andaman and Nicobar Island), Chennai [for
short, the Tribunal] reversing the orders dated 21.5.2019 made
respectively in complaint Nos.293, 294 and 291 of 2019 passed by the
Tamil Nadu Real Estate Regulatory Authority (Tamil Nadu Andaman &
Nicobar Islands), Egmore, Chennai [for brevity, the Authority].
2. By the common impugned order, the Tribunal reversed the
orders dated 21.5.2019 passed by the Authority closing the complaints
filed by the respective first respondent on the ground that the housing
project developed by the appellant in Thazhambur Village,
Kancheepuram District was structurally completed under Rule 2(h)(iii)
of the Tamil Nadu Real Estate (Regulation & Development) Rules, 2017
(for short, the Rules) and thereby exempting from registration with the
Authority and directed the appellant to register the project within 15
days from the date of receipt of the common impugned order dated
31.10.2019.
3. The appeals have been filed by raising the following
substantial questions of law:
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“i. Whether the Real Estate Appellate
Tribunal erred in deciding on the powers of the
RERA ?
ii. Whether the conditions prescribed in
Rule 2(h)(iii) of the Tamil Nadu Real Estate
(Regulation & Development) Rules, 2017 were
satisfied?
iii. Whether the Real Estate Regulatory
Authority (RERA) has the power to condone
delay ? And
iv. Whether the Limitation Act of 1963 is
applicable to all special/general legislations
unless expressly excluded?”
4. We have heard Ms.Aparajitha Viswanath, learned counsel
appearing for the appellant, Mr.R.Ramasubramaniam, Raja, learned
counsel appearing for the respective first respondent in all the appeals
and Ms.Varalakshmi, learned Standing Counsel for the Authority.
5. The respective first respondent in all these appeals, who are
all ex-servicemen, are purchasers of apartments in the project
developed by the appellant. They approached the Authority with the
complaints stating that the project had to be registered under the
provisions of the Act and sought for appropriate directions. The
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respective first respondent referred to a communication sent by the
Principal Secretary to Government, Housing and Urban Development
Department and Chairman of the Authority, Chennai to the appellant
dated 13.12.2017 stating as follows :
“From To
The Principal Secretary to M/s.Army Welfare Housing
Government, Housing & Organization, No.31,
Urban Development & Thazambur Village, Near
Chairman, Tamil Nadu Real DLF Garden City,
Estate Regulatory Authority, Chemmanchery, Chennai
(TNRERA), 1st Floor, Tower-II,
6
00119.
CMDA, No.1A, Gandhi Irwin
Road, Egmore, Chennai-8
-------
Letter No.TNRERA/396/2017-150 dated 13.12.2017
Sir,
Sub : TNRERA – project registration with RERA – reg.
Ref : (i) Your project at Thazambur Village,
Chengalpattu Taluk, Kancheepuram District
S.Nos.172/1 and 173.
(ii) CTCP Lr.RoC.No.14084/2017/Spl.Cell dated
20.9.2017
-----
You have submitted an application to LPA/CTCP
seeking exemption from RERA for the project at Thazambur
Village, Chengalpattu Taluk, Kancheepuram District S.Nos.
172/1 and 173.
2. The CTCP in the letter cited reported that on
inspection, it is noticed that the building is partly completed/
not yet started. Accordingly, your project falls under the
definition of ongoing project. Under Section 3(1) of the Real
Estate (Regulation & Development) Act, 2016 and Rule 4 of
the Tamil Nadu Real Estate (Regulation & Development) Rules,
2017, registration of real estate projects with TNRERA is
mandatory.
3. Hence, I am to request you to submit application for
registration of your project within 15 days from the date of
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receipt of this letter. The details for filing application are
available in our website www.tnrera.in.
Yours faithfully,
sd/-
for Principal Secretary
to Govt., H&UD & Chairman
RERA”
6. In terms of the said communication, the Authority had taken a
decision that the project developed by the appellant fell under the
definition of 'ongoing project' and in terms of Section 3(1) of the
Real Estate (Regulation & Development) Act, 2016 and Rule 4 of the
Tamil Nadu Real Estate (Regulation & Development) Rules, 2017,
registration of the project with the Authority was mandatory.
7. It appears that the appellant did not challenge the said
communication dated 13.12.2017, but submitted a representation
dated 19.2.2018 to the Principal Secretary to Government, Housing
and Urban Development Department and Chairman, Tamil Nadu Real
Estate Regulatory Authority that they entered into turnkey contracts
with M/s.True Value Homes India Private Limited and obtained DTCP
approval No.4802/13 for this project and all six residential towers and
club house in all aspects have been completed as per the approved
drawings before April 2017 and that the necessary certificates for
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structural completion in all aspects from the Architect and the
Structural Consultant were duly obtained and submitted along with the
representation dated 19.2.2018. The appellant further stated that the
application for exemption from the registration under the Act was
submitted on 10.8.2017 reiterating that the project has been
completed in all aspects before the Act came into force.
8. The appellant was aware of the fact that such application for
exemption from the provisions of the Act was submitted beyond the
time limit and therefore, they sought for condoning the delay of four
weeks in submitting the application, take up for consideration the
application for exemption and grant relief. The appellant appears to
have placed reliance on a communication sent by the Commissioner of
Town and Country Planning to the Chairperson (Chairman) of the
Authority in ROC.No.4724/2018/CP dated 26.7.2018, which consists of
annexures to support their stand that the project was complete in all
aspects to qualify for exemption.
9. It is not clear as to when the inspection was conducted in the
building and as to whether the allottees/purchasers were put on
notice. It is admitted that the project has not been listed out in the list
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of projects required to be published by the Director of Town and
Country Planning in their official website on the 16th day of the
Notification of the Rules, which came into force on 22.6.2017 besides
publication of the same in the website of the Authority.
10. The appellant pitches their case by referring to Rule 2(h)(iii)
of the Rules to state that their project was structurally completed, that
they obtained a certificate from the Architect/Structural Engineer and
that this was intimated to the Local Planning Authority/Regional
Deputy Director of Town and Country Planning.
11. From the records placed before this Court, it is seen that this
communication, which was stated to have been sent to the
Department of Town and Country Planning was beyond the period of
15 days from the date of Notification of the Rules namely 22.6.2017.
Thus, the larger question would be as to whether at all the appellant
could rely upon Rule 2(h)(iii) of the Rules claiming exemption. One
more important issue, which has been lost sight of is that once the
Authority has taken a stand that the project is registerable under the
Act and intimated the appellant vide communication dated 13.12.2017,
the question of reviewing of such a decision has not been provided for
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under the provisions of the Act and the Rules.
12. Even assuming that the appellant or the project proponent is
able to convince that they complied with the condition stipulated for
exemption, if the Authority is of the view that a decision in this regard
is required to be taken, then principles of natural justice would require
that the allottees/purchasers should be heard before such a decision is
taken. Admittedly, this was not done. Therefore, the final orders
passed by the Authority dated 21.5.2019 are in violation of the
principles of natural justice.
13. Hence, the Tribunal was fully justified in its common
impugned order dated 31.10.2019 with regard to the decision
on point No.1, which was framed by the Tribunal for
consideration. Thus, we hold that the decision rendered on
point No.1 is confirmed.
14. The two other points framed for consideration were as to (i)
whether the exemption granted to the appellant herein by condoning
the delay was tenable and (ii) whether the appeals filed by the
respective first respondent herein deserve to the allowed.
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15. In the considered view of this Court, once the Tribunal came
to the conclusion that there has been violation of the principles of
natural justice, the matters could have been remanded to the Authority
for a fresh consideration because the Authority dismissed the
complaints filed by the respective first respondent herein without
hearing them, but solely based on the communication sent by the
Commissioner of Town and Country Planning to the Chairman of the
Authority dated 26.7.2018. The respective first respondent did not
have any opportunity to rebut the statement made by the
Commissioner of Town and Country Planning.
16. In this regard, it is relevant to point out about the powers of
the Authority to call for information and conduct investigation as
adumbrated under Section 35 of the Act, which reads as hereunder :
“(1) Where the Authority considers it
expedient to do so, on a complaint or suo
motu, relating to this Act or the rules or
regulations made thereunder, it may, by order
in writing and recording reasons therefor call
upon any promoter or allottee or real estate
agent, as the case may be, at any time to
furnish in writing such information or
explanation relating to its affairs as the
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Authority may require and appoint one or more
persons to make an inquiry in relation to the
affairs of any promoter or allottee or the real
estate agent, as the case may be.
(2) Notwithstanding anything contained
in any other law for the time being in force,
while exercising the powers under sub-section
(1), the Authority shall have the same powers
as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908) while trying
a suit, in respect of the following matters,
namely:—
(i) the discovery and production of books
of account and other documents, at such place
and at such time as may be specified by the
Authority;
(ii) summoning and enforcing the
attendance of persons and examining them on
oath;
(iii) issuing commissions for the
examination of witnesses or documents;
(iv) any other matter which may be
prescribed.”
17. In terms of Sub-Section (1) of Section 35 of the Act, if the
Authority considers it expedient to do so, on a complaint or suo motu,
relating to this Act or the Rules or the Regulations made thereunder, it
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may, by order in writing and recording reasons therefor, call upon any
promoter or allottee or real estate agent, as the case may be, at any
time to furnish in writing such information or explanation relating to its
affairs as the Authority may require and appoint one or more persons
to make an inquiry in relation to the affairs of any promoter or allottee
or the real estate agent, as the case may be.
18. Sub-Section (2) of Section 35 of the Act commences with a
non obstente clause, which states that while exercising the powers
under Sub-Section (1), the Authority shall have the same powers as
vested in a civil court under the CPC.
19. Thus, it is seen that the power conferred on the Authority is
akin to a civil court in respect of discovery and production of books of
account and other documents at such place and at such time as may
be specified by the Authority, summoning and enforcing the
attendance of persons and examining them on oath, issuing
commissions for the examination of witnesses or documents and all
other matters, which are prescribed under the CPC. Therefore, the
Authority should bear in mind that the power conferred on it is onerous
and the Authority has power to make a thorough enquiry into the
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matter before a decision is taken. This is more so because the
Authority has been conferred with suo motu power to call for
information and it has to be borne in mind that the provisions of the
Act are not only to protect the allottee, but also to protect the
promoter or the real estate agent. Thus, the overall perspective and
the purpose of the Act should be borne in mind by the Authority before
a decision is taken. More importantly, the decision making process
should be fair, transparent and should comply with the principles of
natural justice.
20. The learned counsel appearing for the respective first
respondent submits that Clause (iii) of Rule 2(h) of the Rules is
unconstitutional and beyond the provisions of the Act and more
particularly Section 3 of the Act and that writ petitions challenging the
vires of the said Rule are pending.
21. Be that as it may, we are satisfied that principles of natural
justice have been violated, which had been rightly noted by the
Tribunal in the common impugned order dated 31.10.2019. Since the
Authority had not made any enquiry as required to be done under
Section 35 of the Act, the respective first respondent/allottees/
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purchasers have been put to great prejudice. The Authority, being the
first Fact Finding Body, is required to make a thorough probe into the
matter especially when the respective first respondent have taken a
categorical stand that the project cannot be brought under the ambit
of Rule 2(h)(iii) of the Rules and admittedly, the project was not
published in the list of projects, which are to be construed as not
ongoing projects in terms of Rule 2(h)(iii) of the Rules. Hence, this
Court is of the considered view that the matter should be remanded to
the Authority for a fresh decision bearing in mind the observations
made by this Court in this common judgment.
22. Before parting with the case, we wish to observe that the
appellant is an organization formed by the respondents and persons
like the respondents. The respondents are none other than the ex-
servicemen, who have served the country. The appellant organization
appears to have been established to implement the projects PAN India
for the welfare of serving defence personnel as well as retired defence
personnel, war widows, etc. As could be seen from the letter written
by the appellant to the Authority, they have got a promoter, which is a
developer registered in Chennai. The manner, in which, the appellant
organization should deal with the matter is slightly different from how
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a private promoter/developer would deal with such cases.
23. If a project is registered under the provisions of the Act,
then there are certain mandatory requirements to be complied with.
Equally, the promoter namely the appellant would also have enough
protection under the Act. Therefore, a more pragmatic view is required
to be taken by the appellant organization than bitterly contesting the
matter with their own kith and kin, who served the country and are
now retired or who may be even serving. This observation may be
taken note of by the officers at the helm of affairs.
24. In the result, the above civil miscellaneous second
appeals are partly allowed. The decision rendered by the
Tribunal in the common impugned order dated 31.10.2019 with
regard to point No.1 is confirmed. The decision rendered by the
Tribunal in the common impugned order dated 31.10.2019 with
regard to point Nos.2 and 3 framed for consideration is set
aside and the matters are remanded to the Authority for a fresh
decision after issuing notice to the appellant as well as the respective
first respondent and summoning all records from the Planning
Authority and if necessary, the Authority shall examine witnesses and
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record statements by issuing commissions, provide adequate
opportunity to the respective first respondent to place materials before
the Authority and take an informed decision by recording reasons.
Since the matters are pending from 2017, we request the Authority to
give priority to these matters and dispose of the same preferably
within a period of four weeks from the date of receipt of a copy of this
common judgment. No costs. Consequently, the connected CMPs are
closed.
21.1.2021
To
1.The Tamil Nadu Real Estate Appellate Tribunal (Tamil Nadu,
Puducherry, Andaman and Nicobar Island), Chennai
2.The Tamil Nadu Real Estate Regulatory Authority (Tamil Nadu
Andaman & Nicobar Islands), Egmore, Chennai.
RS
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CMSA.Nos.12 to 14 of 2020
T.S.SIVAGNANAM,J
AND
R.N.MANJULA,J
RS
CMSA.Nos.12 to 14 of 2020 &
CMP.Nos.3327, 3343, 3379,
3377, 3393, 14208, 14214
and 14217 of 2020
21.1.2021
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