Delhi High Court Junks Supertech Homebuyers’ Pleas For Stopping Banks From Charging EMIs From Them, Says Avail Alternative Remedies

The Delhi High Court has dismissed Supertech Urban Home Buyers Association (SUHA) Foundation and other home buyer’s petitions seeking directions for financial institutions to not charge the pre-EMIs or full EMIs from them till delivery of possession of flats by the real estate developer Supertech Limited.

Justice Purushaindra Kumar Kaurav said there are various agreements - buyer-developer agreement, loan agreement or tripartite agreement - between the homebuyers, the builder and the banks, and the rights claimed by the homebuyers are eventually flowing from the respective agreements only.

“In the instant case, not only the rights of the petitioners are flowing from private contract but the complex and disputed question of facts are involved and the parties are not remediless. Alternative forums are already in place. Any interference by the writ court under the facts of the present case would amount to usurpation of powers vested with the respective forums. Such an exercise is not permissible unless extraordinary circumstances exist which are apparently non-existent in the instant cases”.

The court said the 'builder-buyer agreement' also categorically provides for an arbitration clause, whereby, any dispute pertaining to the agreement was to be referred to arbitration. It also noted that in some of cases, the homebuyers have already approached the alternate forums and their cases are pending.

“In some cases where the banks have initiated insolvency proceedings against them, the homebuyers can raise their claim before the concerned Tribunal. There are various statutes such as RERA Act, Consumer Protection Act, Insolvency and Bankruptcy Code, 2016, SARFAESI Act etc., where the petitioners can raise their grievances. It would not be advisable to entertain a writ petition under Article 226 of the Constitution under the facts of the present cases,” it added.

The court further said that the homebuyers are claiming their rights on the basis of the terms of contract or on the basis of RBI circulars. It reiterated that their rights are mainly governed by the terms of the contract which they have entered into.

“... and to enforce the terms of the contract, no writ or order can be issued under Article 226 of the Constitution so as to compel the authorities to remedy a breach of contract pure and simple,” it added.

The court also said noted financial institutions are alleging breach on the part of the petitioners and are claiming full adherence of the RBI Circular. However, it added:

“In any case, since the rights of the homebuyers are flowing from the terms of the contract and if, there is any breach of RBI Circulars at the instance of banks/ financial institutions, the same by itself cannot entitle the homebuyers for the relief, which they have claimed in the instant writ petitions. In any case, the breach of RBI Circular is again a question of fact that can still be gone into before the appropriate court.”

The court clarified that it has not expressed any opinion on the merits of the case and has consciously not given any finding with respect to the violations or non-violations on the part of the respective parties.

“However, since the interests of large number of homebuyers are involved in these cases, if the homebuyers' avail alternative remedies, as may be available to them, the same may be considered and decided expeditiously in accordance with law,” it said.

SUHA Foundation consists of 123 home buyers. Supertech Limited in 2013-2018 publicized its project being developed by it at Sector-68, Gurgaon, Haryana - Supertech Hues, Azalia and Scarlet. The home buyers booked their flats and in order to meet financial demands, they took home loans for their respective residential units through the banks.

Under the agreements, the banks would disburse the sanctioned amount to the builder directly and the builder was supposed to pay the pre-EMIs or full EMIs on the sanctioned loan. SUHA Foundation and the banks had separate agreements. Around December 2018, the builder allegedly started defaulting in payments of the pre-EMIs or full EMIs and the financial institutions started sending payment reminders to the members of the association.

Though the builder was obligated to deliver the possession of the flats by December 2019, it failed to do so, the court was told. The builder also stopped paying the pre-EMIs and the banks started sending the demands to the homebuyers, according to the petitions filed before the court. 

In the petition, the association prayed that banks be asked to refund the EMIs and flats be delivered in a time bound manner. The petitioner also sought action against the banks for alleged violation of the rules and regulations of the RBI.

Title: SUPERTECH URBAN HOME BUYERS ASSOCIATION (SUHA) FOUNDATION Vs UNION OF INDIA & ORS

Citation: 2023 LiveLaw (Del) 241

Click Here To Download Judgment