2025 (11) TMI 590 - SC - Indian Laws

Authority to nominate three senior officers to inspect 33 units May 1; petitioner must produce documents and clarify tripartite deals

SATINDER SINGH BHASIN Versus GOVERNMENT OF NCT OF DELHI & ORS.

SC directed the state industrial development authority to nominate three senior officers to inspect specified units on 1 May 2025 at 11:00 a.m.; a ... Possession of units - requirements of on-site verification - unwillingness to take possession apprehending that registration of the document will not take place - HELD THAT:- The Uttar Pradesh State Industrial Development Authority is directed to immediately nominate three senior officers to visit the buildings in which the units mentioned in Annexure A-20 are situated. The officers of the said Authority will visit the site on 1st May, 2025 at 11.00 a.m. when a representative of the petitioner shall remain present along with all documents such as Occupation/Completion Certificate, agreements, if any, entered into with 41 persons mentioned in Annexure A-20. The representative of the petitioner will also bring the documents showing delivery of possession as regards these 41 units (excluding the units to be allotted to 8 persons who have allegedly taken refund). The officers of the Authority shall verify the documents produced by the petitioner and submit a report to this Court The Authority will file a report/affidavit stating the aforesaid facts and shall produce necessary documents. The Authority will also make a statement whether it is in position to execute Tripartite Agreement (to which the petitioner, the purchaser and the Authority will be parties) and in what manner the Tripartite Agreements can be executed - The Authority to also indicate the amounts, if any, payable by the petitioner to the Authority in respect of these 33 units. The petitioner will make a statement on this suggestion of respondent No. 178. ISSUES PRESENTED AND CONSIDERED 1. Whether the Court should direct an on-site verification of specific units allegedly delivered to purchasers and examine habitability, utility availability, existence of Occupation/Completion Certificates, and actual possession. 2. Whether officers nominated by the State Industrial Development Authority should act as officers of the Court for the purpose of inspection and reporting. 3. Whether the Authority should investigate and report on the feasibility and mechanism for execution of Tripartite Agreements among the petitioner, purchasers and the Authority, and indicate amounts, if any, payable by the petitioner to the Authority in respect of specified units. 4. Whether the petitioner must file documentary proof of refund having been paid to certain purchasers who allegedly accepted refunds in full and final settlement. 5. Whether the petitioner must file an affidavit updating the status of settlements with the remaining investors (from the total list), and the timeline for such filing. 6. Whether prospective purchasers/allottees should be permitted to be present during inspection and whether the petitioner should respond to an allottee's suggestion of settlement by refund or taking possession. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Directing on-site verification of units (habitability, utilities, certificates, possession) Legal framework: The Court directed fact-finding on specific aspects relating to 33 named units identified by the petitioner (serial numbers specified in annexure pages) by nominating officers to inspect the premises and verify documentary proof produced by the petitioner. Precedent Treatment: No precedents were cited or relied upon in the order; the direction is an exercise of the Court's case-management and supervisory authority to ascertain factual circumstances. Interpretation and reasoning: The Court ordered the Authority's nominated senior officers to visit the buildings on a fixed date/time with the petitioner's representative and produce documents such as Occupation/Completion Certificates, agreements and proof of delivery of possession. The inspection is directed to determine (a) habitability of the specific units, (b) presence of electricity and water supply, (c) existence of Occupation/Completion Certificates for the units, and (d) whether possession has in fact been handed over and to whom. Ratio vs. Obiter: Ratio - the direction to conduct an on-site verification and specify the factual points for inquiry is an operative instruction essential to the Court's determination of settlement/possession disputes in the matter. Conclusions: The officers must verify the listed factual aspects and submit a report to the Court by the prescribed date; the petitioner must produce and make available all relevant documents during inspection. Issue 2 - Status of nominated officers as officers of the Court Legal framework: The Court declared that officers nominated by the Authority will act as officers of the Court for the purpose of the inspection and report. Precedent Treatment: No prior authority referenced; the declaration is an administrative judicial direction to ensure impartiality and court oversight. Interpretation and reasoning: To ensure that the inspection is conducted under the Court's supervision and with an obligation of independence, officers nominated by the Authority are to act as officers of the Court rather than as mere Authority functionaries. Ratio vs. Obiter: Ratio - this is an operative determination affecting the legal status and accountability of the inspecting officers and the admissibility/weight of their report. Conclusions: Nominated officers will perform duties as officers of the Court; identified purchasers may be permitted to be present during inspection. Issue 3 - Authority's duty to report on Tripartite Agreements and amounts payable Legal framework: The Court required the Authority to file an affidavit/report stating whether it can execute Tripartite Agreements involving the petitioner, purchasers and the Authority, the manner of execution, and to indicate any amounts payable by the petitioner to the Authority in respect of the listed units. Precedent Treatment: No precedential discussion; the order operationalizes verification and settlement logistics within the Court's supervision. Interpretation and reasoning: The Court seeks not only fact-finding as to physical delivery and documentation but also administrative clarity on how formal transfer/settlement can be achieved through Tripartite Agreements and whether any financial obligations to the Authority remain, to enable final resolution for purchasers. Ratio vs. Obiter: Ratio - directive is essential to enable implementation of settlement or handover and to remove barriers to registration/possession. Conclusions: Authority must file a report addressing feasibility and mechanism for Tripartite Agreements and provide details of any sums payable by the petitioner by the specified date. Issue 4 - Requirement of documentary proof of refund to certain purchasers Legal framework: The Court directed the petitioner to file affidavits/documents demonstrating that specified persons (serial nos. 1-8 on annexure pages) have taken refunds in full and final settlement. Precedent Treatment: Not addressed; the requirement is fact-specific and necessary to determine who remains aggrieved and who has been compensated. Interpretation and reasoning: The Court distinguished between purchasers who allegedly received possession and those who allegedly received refund; documentary proof of refund is necessary to exclude refunded purchasers from further relief and to finalize accounts. Ratio vs. Obiter: Ratio - operative requirement to establish finality of settlement for those purchasers and to narrow the scope of outstanding disputes. Conclusions: Petitioner to file the specified affidavit proving refunds by the stated date; absence of such proof will leave those purchasers within the scope of pending relief. Issue 5 - Filing affidavit about remaining investors and timeline Legal framework: The Court noted an earlier reference to disputes with 103 investors and that only 41 had been addressed; it directed the petitioner to file an affidavit on progress in settlement with the remaining 62 investors by a fixed date. Precedent Treatment: No precedent cited; procedural case-management decision to monitor progress. Interpretation and reasoning: To ensure comprehensive resolution and Court oversight, the petitioner must report on settlements with all investors; this avoids piecemeal adjudication and promotes structured compliance with the Court's process. Ratio vs. Obiter: Ratio - mandatory procedural direction for case management and final resolution of outstanding investor disputes. Conclusions: Petitioner to file the affidavit regarding the remaining 62 investors by the prescribed date for consideration by the Court. Issue 6 - Presence of allottees during inspection and petitioner's response to a purchaser's settlement option Legal framework: The Court permitted named purchasers to be present during inspection and required the petitioner to respond to a purchaser's indication of willingness to settle either by refund or by taking possession. Precedent Treatment: Not discussed; the direction is practical and transparency-oriented. Interpretation and reasoning: Allowing purchasers to be present ensures transparency and that inspection findings of habitability/possession are open to those directly affected; the petitioner must address expressed settlement preferences to facilitate resolution. Ratio vs. Obiter: Ratio - operative for the conduct of inspection and subsequent consideration of settlement proposals. Conclusions: Purchasers named may attend inspection; the petitioner must state its position regarding any allottee's proposal to accept refund or take possession, as part of the ongoing settlement process.