TaxTMI 
TaxTMI 
2021 (3) TMI 1392
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....ement date for the Project was mentioned as 01.12.2014 and date of completion was mentioned as 30.11.2019, and 24 allottees had approached the Authority by filing complaints against the violations of the Builder Buyers Agreement (hereinafter referred to as ''BBA') by the Promoter. During the course of enquiry into the complaints made by the allottees under Section 38 of the Act, it was found that even the necessary conditions for registration of the Project as mentioned in Rule 14 had not been met and required details were not uploaded on the R.E.R.A. Website. There were no regular progress reports uploaded either. It was, therefore, decided to get an on the spot inspection done of the Project site. 4. A team was constituted of the Chief Engineer as the Technical Adviser, along with another Junior Engineer and it was found by the said team that although the Project was registered as "Sampada Livia" and the Promoter's name was given as PSA Impex Private Limited, the board on the site showed the name as "Alturio Residency". The approved plan had not been uploaded on the R.E.R.A. website. The Project completion date was 30.11.2019, however, on 24.2.2019, when the Te....
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....ngement of financial resources and cash flow for completion of the Project was also demanded to be given along with documentary evidence that all the shares of the Company PSA Impex Pvt. Ltd. had been transferred to the new builder M/s Rudra Build Well Constructions Ltd. The Promoter submitted its reply to the letter dated 17.05.2019 on 20.05.2019, saying that the owner of M/s Rudra Build Well Sri Raj Kumar had been taken on board as Director of M/s PSA Impex Pvt. Ltd. and 99.75% shares had been transferred to him. 7. The Authority deliberated upon the replies submitted by the Promoter in the light of the provisions of the Act and the Rules, as also the circular of U.P. Real Estate Regulatory Authority published on 15.05.2018. An order dated 11.07.2019 was issued asking the Promoter to contact either personally or through e-mail, the Secretary of UP Real Estate Regulatory Authority with his personal affidavit along with the consent letters of at least two thirds of the allottees to the proposed transfer of the Project to the new builder. The Authority would then arrange publication of the information in various newspapers and fix a date, time and place for public hearing of all ....
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....ppellant has raised mainly two questions of law to be decided by this Court. It is the case of the Appellant who is the Promoter of the Real Estate Project named as Sampada Livia (hereinafter referred to as "the Project") that (a) the Authority had not given oral/personal hearing to the Appellant while deciding the case of deregistration/revocation of registration of the Appellant. Even if the language of Section 7 of the Act only provided for issuance of a show cause notice and consideration of reply given to it by the Promoter, the act of revocation of registration had civil consequences and therefore the right of personal/oral hearing should be read into the procedure prescribed by the Act. (b) it has been argued that the Authority acted in a quasi-judicial capacity while ordering revocation of registration under section 7 of the Act and therefore it could not have sub-delegated its power to decide the issue in the case of the Appellant, the Authority had only approved the draft of the order passed by the Secretary, R.E.R.A. The Secretary, R.E.R.A. is only an officer appointed by the State Government to assist the Authority in the exercise of its duties and responsibilities unde....
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.... the Project as per the Green Building Norms and to get it registered under "GRIHA" or "IGBC". A revised construction schedule for each of the towers has been given by the new Promoter. 17. In the reply dated 13.05.2019, it was informed to Real Estate Regulatory Authority that at least Rs.10 crores had been disbursed as refund through cheques to various home buyers and arrangements were being made for cash inflow to complete the Project. The builder had proposed to complete two towers by March, 2020 and another two towers by October, 2020. There was no reference to remaining five being completed any time soon. 18. It was argued that despite submission of replies categorically stating that the Appellant had sorted out the problem and transferred all shares to a new Promoter and possession of flats to the allottees would be given in a phased manner commencing from October, 2020, the Appellant has been de-registered. The Secretary, R.E.R.A. by a letter dated 11.7.2019 demanded consent of 2/3rd of the allottees from the Appellant for transferring its share to a third-party and other relevant documents. It has been further argued that the Appellant was not communicated this letter....
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....im. 21. The Authority after considering the reply of the Promoter and with a view to giving it opportunity to comply with the provisions of Section 15 of the Act, passed an order on 11.7.2019. The Promoter was directed to submit within 15 days, the consent for transfer of the Project of the majority of the shareholders supported by their affidavits. Based on consent of not less than 2/3rd of the allottees, a public notice was to be issued thereafter with proper advertisement about date and place of hearing and method for filing objections before the Authority, if any. The final decision on the show cause notice dated 8.3.2019 was put on hold till the decision on the proposal of the Promoter to be taken by the majority of the home buyers. 22. The Promoter did not comply with the order dated 11.7.2019 and keeping in view the conduct of the Promoter, the matter was thoroughly deliberated by the Authority in its meeting dated 26.9.2019 and 27.9.2019, where the Authority came to the conclusion that the Promoter had not given details with documentary evidence as required under the Act and the Rules i.e. under the provisions of Sections 4 and 11 of the Act, and Rule 14 of the Rules ....
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....ns for revocation of registration. In the meeting held on 27.9.2019, the Authority approved the draft order for revocation of registration. 26. It was argued by Sri Shobhit Mohan Shukla that the decision with regard to the Appellant had been taken by the Authority as it had been mentioned at Page 353, which is in line with the power of the Authority given to it under Section 7 of the Act and includes revocation of registration of the Appellant; the debarring of the Promoter from accessing the R.E.R.A. website in relation to the project; mentioning his name in the list of defaulters and displaying his photograph on the website and informing all other Real Estate Regulatory Authorities in the country about revocation of such registration; as also freezing the account maintained by the Promoter in relation to the Project in ICICI Bank till further orders. 27. The Authority had also taken a decision to constitute a the Project Monitoring Committee under the Chairmanship of the R.E.R.A. Member, Mr. Balvinder Kumar; with the Chief Executive Officer of Greater Noida; and Mr. R.D. Paliwal, a Conciliation Consultant; the Finance Controller of U.P. the Authority; and the Technical Advi....
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....y had, in fact been passed by the single Member, which was without jurisdiction. It has been held by the Division Bench of this Court that the Authority has the power to take decision authorising not only the Secretary to communicate the decision of the Authority, but also a single Member to decide cases. 32. Sri Shobhit Mohan Shukla has further emphasized that in the instant case, the decision had been taken by the Authority, not by a single Member, and it had only been communicated by the Secretary. The Agenda for the 22nd Meeting held on 26.6.2019 has also been filed at Page 342 of the paper book. It contains ten Items of which, Agenda Item No.22.1 relates to the Appellant, M/s. PSA Impex Private Limited. 33. In rejoinder to the arguments of the counsel appearing for the Appellant, Sri Sudeep Seth, learned Senior Counsel appearing for the Appellant has read out the last sentence on Page 343 of the paper book, which is as follows: "uparyukt ullikhit paristhitiyon mein pradhikaran ke samaksh prakaranvistrit vichar vimarsh evam nirnay hetu evam prastawit aadesh ke aalekh sahit prastut hai." 34. It has been argued by the learned Senior Counsel that the draft of the....
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....mit a report. The spot inspection of the site was done and the report submitted on 26.02.2019 along with photographs. 38. In the BBA, the date of commencement of the Project was given as 01.12.2014. In four years i.e. up to February, 2019, only 10% of the structural work was done and it was evident that there was no possibility of the Project being completed and handed over to the buyers in time. There was also the possibility of diversion of the allottees' money. Hence, the Authority asked the Chief Executive Officer of Greater Noida to get an Audit conducted of the Project. The Auditors, M/s Currie and Brown Ltd, informed that about Rs.47 crores had been diverted by the Promoter. 39. In paragraph-7 of the order dated 30.09.2019, the reasons for issuing show-cause notice for revocation of registration have been given. The Authority found on the basis of complaints made by the buyers, and on the basis of incomplete information uploaded by the Promoter on UP Real Estate Regulatory Authority web page, and on the basis of the report of spot inspection and photographs of the Project, and on the basis of the Audit report, that the Promoter having registered the Project was not....
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....does not become effective until permission is obtained. But permission subsequently granted still validates the previous act. It is not necessary to obtain previous consent before taking any action and its approval would mean that such action is validated. 43. Where a statute uses the term prior approval, anything done without prior approval is a nullity; where a statute employs the expression approval, however, in such cases subsequent ratification can make the act valid. In some cases, the word ''prior' and ''previous' may be implied if the contextual situation or circumstances justify such reading otherwise if an act requires only approval the action holds good until it is disapproved. Since Section 15 of the Real Estate (Regulation and Development) Act required prior approval and not simply approval and there was no prior approval either of the allottees or of the Authority when shares of Appellant was transferred to M/s Rudra Builders Pvt. Ltd, the said transfer became vitiated and could not be countenanced. 44. Section 34 of the Act provides for the functions of the Authority and enumerates the same in several Sub-clauses from a to h quoted herei....
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....authorised. In Paragraph 4 of its judgment, the Tribunal has considered the issues raised by the learned counsel for the Appellant in the memo of the Appeal. It has referred to the fact that although several grounds were written in the Appeal, the counsel for the Appellant during the course of hearing had confined his whole argument for assailing the order passed by the the Authority principally on the grounds; (a) that the Authority's order was passed without jurisdiction by the Secretary of the Authority; (b) It was in violation of the provisions of Sections 20 and 21 of the Act; (c) the order was passed without considering the replies preferred by the Appellant; (d) no reasons were assigned by the Regulatory Authority for taking suo moto action under Section 7 of the Act; (e) no authorisation was done by the Regulatory Authority in favour of the Secretary to pass the impugned order; (f) in none of the complaints, the relief of revocation of the registration of the Promoter was sought; (g) the Appellant-Company had changed its Promoter with the approval of 2/3rd of the allottees and failure to take prior approval of the Regulatory Authority under Section 15 of the Act does no....
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....12.2018, opportunity was provided to complete all information on the website. A penalty of rupees two lacs was imposed upon the Promoter by the Regulatory Authority by its order dated 31.8.2019 for failure to update quarterly progress report. The Promoter neither updated the quarterly progress report nor deposited the penalty. 48. In the complaints filed by 24 allottees of the Project under Section 31 of the Act, it was alleged that the Promoter had promised to hand over possession of the units by the end of 2017 and to pay the Bank's EMIs in case of failure to do so. The Promoter having diverted and misappropriated the money deposited by them was now not traceable and no work was going on at the site. The Tribunal considered the inspection report dated 26.2.2019 of the Technical Advisor, examined all the records as also the report submitted by M/s. Currie and Brown. As per the Auditor's report, the total sold units were 355 and unsold units were 371. The amount received from the sold units was Rs.94 Crores out of which Rs.5 Crores was refunded to the allottees for cancellations. As per the assessment of the Auditors, the percentage cost incurred should be 15%, whereas t....
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....oida Authority to the tune of Rs.30.8 Crores and had diverted about Rs.47 Crores from the Project. The Promoter had also created encumbrances by way of loan to the tune of Rs.5 Crores. 52. The Tribunal has observed that Section 7 of the Act empowers the Authority to revoke the registration granted under Section 5 in three circumstances, firstly on a complaint, secondly, on the recommendation made by the Competent Authority and thirdly, even Suo Moto. It has only to record its satisfaction that the Promoter has made a default in doing anything required by or under the Act or the Rules or Regulations made thereunder, or the Promoter has violated the terms and conditions of approval given by the Competent Authority; or the Promoter is involved in any kind of unfair practice or irregularities which includes making any statement or falsely representing that the services are of a particular standard or that the Promoter has approval or affiliation, or makes a false or misleading representation concerning the services offered or the Promoter permits publication of any advertisement in a Newspaper or otherwise, of services that are not intended to be offered or indulges in any fraudulen....
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....n given the power to regulate its own procedure and is not bound by the procedure prescribed under the Civil Procedure Code or any other Civil Law. 56. The learned counsel for the Appellant has placed reliance on the observation of the Supreme Court in Sahni Silk Mills Private Limited and Another Vs Employees' State Insurance Corporation reported in 1994 (5) SCC 346, and has read out several paragraphs to argue that there cannot be any Sub delegation or even delegation of quasi judicial function. This Court has perused the judgement rendered in Sahni Silk Mills (Supra), it is apparent therefrom that the Appellants therein had challenged the recovery notices issued by Regional Director of ESI Corporation for delayed payment of Contribution in Employees State Insurance on behalf of the employer. It was argued that such recovery orders could have been issued either by the Corporation or by the Director General of the Corporation and not by Regional Directors. Under Section 85-B, the Corporation can recover from the employer such damages as it may think fit, whenever an employer fails to pay the amount due towards contribution or any other amount payable under the Act subject to....
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....y other officer to exercise the power under Section 85B. It held that part of the Resolution of the Corporation which permitted the Director General to further delegate his powers to Subordinate Officers as ultra-virus of its power under Section 94A. 60. However, the Court observed in Paragraph-5 that in the present administrative set up extreme Judicial aversion to delegation cannot be carried to an extreme. A public Authority is at liberty to employ agents to exercise its powers. That is why in many statutes, delegation is authorized either expressly or impliedly. Due to the enormous rise in the nature of the activities to be handled by the statutory authorities the maxim "delegatus non-protest delegare" is not being applied specially when there is a question of exercise of administrative and discretionary Power. It observed in Paragraph-6 that by now it is almost settled that the Legislature can permit any statutory Authority to delegate its power to any other Authority. 61. Learned counsel for the Appellant has also relied upon Automotive Tyre Manufacturers Association vs. Designated Authority and others, 2011 (2) SCC 258, wherein the Supreme Court was considering a bunch....
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....of West Bengal Vs. Subash Kumar Chatterjee and others, 2010 (11) SCC 694, and has referred to paragraph 8 to 24, 26 and 27, to say that the power conferred upon the Administrative Tribunal under the Act flows from Article 323 of the Constitution and therefore, the Administrative Tribunal cannot delegate the power to decide, and the dispute regarding pay scales was required to be decided exclusively by it and it could not have shifted its responsibilities by remitting the original application made to it to the Chief Engineer. Such delegation is void ab initio and such practice by the Administrative Tribunals was strongly disapproved by the Supreme Court. The Supreme Court observed that the practice adopted by the Tribunals directing applications filed before them to be treated as representations before the executive authorities for their decision on merits should be deprecated. The Tribunals cannot delegate their essential function and duty to decide service related disputes. In the aforecited case, the Administrative Tribunal was considering a dispute regarding pay-scale and parity sort by one group of employees with that of another. 65. The learned counsel for the appellant has....
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....ystem by abolishing intermediaries and the effect thereof on the properties of Shri Jagannath temple which were governed by a special enactment, Shri Jagannath Temple Act, 1955, where all the endowments of Jagannath Temple Puri stood statutorily vested with its Temple Committee. Under an order of the Tehsildar one of such endowments was settled in favour of the respondent Math which in fact contravened Sections 5 and 30 of Shri Jagannath Temple Act, on the ground that by way of an Amendment in 1974, the Orissa Estate Abolition Act, became applicable to endowments made to temples also. The Supreme Court held that the intention of the 1974 amendment could not have been to render the entire 1955 Act meaningless. The Supreme Court held that the order passed in 1982 under the Orissa Estate Abolition Act in favour of the respondent Math had been passed by the Tehsildar Puri, whereas Section 8-A of the Act clearly provides that the claims have to be filed before the Collector. Although the learned Senior Counsel appearing for the respondents had contended that the definition of "Collector" in the of Orissa Estate Abolition Act, 1951, is an inclusive one, and therefore the Tehsildar has Au....
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....gent. The Authority has also been given the same powers as are vested in the Civil Court in respect of discovery and production of books and of accounts and other documents, and other matters prescribed under the Rules and Regulations. 71. The Authority under Section 36 has the power during the course of an enquiry, to pass interim orders restraining any Promoter or allottee or a Real Estate Agent from carrying on any act until the conclusion of such enquiry or until further orders, which may be considered prejudicial to such enquiry.. Power of the Authority to issue directions is further emphasised under Section 37 of the Act. The Authority can under Section 38 impose penalty or interest in regard to contravention of obligations cast upon the Promoters, the allottees or the Real Estate Agents. The Authority in imposing such penalty or interest shall be guided by the principles of natural justice, but it shall have power to regulate its own procedure. The Authority can in certain cases make suo moto reference to the Competition Commission of India. 72. Under Section 39, the Authority may at any time within a period of two years from the date of an order, rectify any mistake a....
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....rity may, in the interest of allottees, also enquire into the payment of amounts imposed as penalty, interest or compensation paid or payable by the Promoter in order to ensure that the Promoter has not withdrawn the said amount from the account maintained by it under Section 4; or use any amount that was paid to such Promoter by the allottees for that Real Estate Project for which the penalty, interest or compensation is payable or any other Real Estate Project; or recover the amount paid as penalty, fine or compensation from the allottees of the relevant Real Estate Project or any other Real Estate Project. 76. Under Rule 24, every order passed by the Adjudicating Officer, Regulatory Authority or the Appellate Tribunal, as the case may be, shall be enforced by the Adjudicating Officer, Regulatory Authority or the Tribunal in the same manner as if it was a Decree or order made by the principal Civil Court in a Suit pending therein. The Regulatory Authority or the Appellate Authority in the event of its inability to execute the order, may send this order to the principal Civil Court to execute it within the local limits of whose jurisdiction the Real Estate Project is located or....
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....ty derives jurisdiction on the complaint. Proceedings before it are not governed by strict Rules of Evidence as in a civil Suit. The order passed by Real Estate Regulatory Authority or by the Appellate Tribunal on Appeal arising out of such proceedings maybe executable as a decree of a civil court but the Appellate Tribunal will have all the powers of the civil court only in respect of execution of its orders. Sometimes, it may also send its orders to a civil court having local jurisdiction for execution in case the person or the property of the Promoter or builder or real estate agent is situated within the local jurisdiction of that Civil Court. 81. The Supreme Court has observed in Paramjit Singh Patheja v I.C.D.S Ltd. JT 2006 volume 10 Supreme Court 41, in paragraph 36 that a legal fiction must be limited to the purpose for which it was created. In applying a legal fiction, one should not travel beyond the limits for which it has been created. Therefore the order of the Tribunal can only be considered to be a decree to facilitate its execution. It is otherwise similar to Income Tax Appeals filed under Section 260 of the Income Tax Act, which are not to be characterised as Se....
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.... 86. In State of Himachal Pradesh vs Raja Mahendra Pal, 1999 (4) SCC 43, the Supreme Court was considering the question whether the pricing committee constituted by the Himachal Pradesh Government for determining the price of forest produce with respect of transactions between the Government and Himachal Pradesh Forest Corporation can be said to be a quasi-judicial body, whose decisions are binding not only on the Government and the Himachal Pradesh Forest Corporation but also between the Government and the respondent who was a Zamindar holding the Jagir of Kutlehar forest. 87. The Court observed that quasi judicial acts are such Acts which mandate an officer the duty of looking into certain facts not in a way in which it is specially directed but after exercising a discretion, in its nature judicial. The exercise of power by such Tribunal or authority contemplates the adjudication of rival claims of persons by an act of the mind, or judgement upon the proposed course of official action for the consequences of which the official will not be liable, although his act was not well judged. A quasi-judicial function has been termed to be one which stands midway between a judicial ....
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....sion of the Statute, or by implication and determination of particular facts on which its jurisdiction to exercise its power depends, or if there is a proposal and an opposition the authority is under a duty to act judicially. In paragraph 150 of the Halsbury's Laws of England, it was mentioned that the duty to act judicially may arise in widely differing circumstances which it would be impossible to attempt to define exhaustively. The question whether or not there is a duty to act judicially must be decided in each case in the light of the circumstances of the particular case, and the construction of the particular statute, with the assistance of the general principles laid down in the judicial decisions. 89. The principles deducible from various judicial decisions were considered by the Supreme Court in Kusaldas S. Advani (supra), and were thus formulated: "(i) If a statute empowers an authority, not being a court in the ordinary sense, to decide disputes arising out of a claim made by one party under the Statute, which claim was opposed by another party, and (ii) determine the respective rights of the contesting parties who are opposed to each other, there is a lis and pr....
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....ose right is going to be affected by the act of the administrative authority, still such an administrative authority would not be a quasi judicial authority. What distinguishes an administrative act from a quasi-judicial act is, in the case of quasi judicial functions under the relevant law the statutory authority is required to act judicially. In other words, where the law requires that an authority before arriving at a decision must make an enquiry, such a requirement of law makes the authority a quasi judicial authority." 92. After referring to three decisions that lay down whether an administrative Tribunal has a duty to act judicially, the Supreme Court observed in Paragraph-21 that "in each case the conclusion should be gathered from the provisions of the particular statute and the Rules made thereunder" and their Lordships clearly expressed the view that if an Authority is called upon to decide respective rights of the contesting parties or if there is a lis, ordinarily there would be a duty on the part of the said Authority to act judicially. 93. In Gullapalli Nageswara Rao versus Andhra Pradesh State Road Transport Corporation, 1959 (Supplement 1) SCR 319, the Suprem....