Inappropriate To Entertain Art. 32 Plea By Homebuyers Against Developers: Supreme Courts Points To Provisions In CPA, RERA, IBC, Criminal Law
The Supreme Court on Thursday declared that proceedings under Article 32 of the Constitution by a purchaser, seeking relief in respect of a real estate project, cannot be entertained. The bench of Justices D. Y. Chandrachud and M. R. Shah was considering a writ petition by one of the home-buyers in respect of a real estate project called "Sushant Megapolis" in Bulandshahar. The primary...
The Supreme Court on Thursday declared that proceedings under Article 32 of the Constitution by a purchaser, seeking relief in respect of a real estate project, cannot be entertained.
Opining that it would be inappropriate to entertain a petition under Article 32 for more than one reason, the bench indicated that there are specific statutory provisions holding the field, including among them:
(i) The Consumer Protection Act 19863 and its successor legislation;
(ii) The Real Estate (Regulation and Development) Act 20164; and
(iii) The Insolvency and Bankruptcy Code 20165.
"Each of these statutory enactments has been made by Parliament with a specific purpose in view. The 1986 Act as well as the subsequent legislation contain provisions for representative consumer complaints. One or more homebuyers can consequently seek relief to represent a common grievance for a whole class of purchasers of real estate. The RERA similarly contains specific provisions and remedies for dealing with the grievance of purchasers of real estate. The provisions of the IBC have specifically taken note of the difficulties which are faced by homebuyers by providing for remedies within the fold of the statute", elaborated the bench.
As regards the allegations of fraud at the instance of the petitioner, the bench iterated that insofar as the remedies of a criminal investigation are concerned, there is reason for this Court not to entertain a petition directly under Article 32 in the present set of facts. Adequate remedies are available in terms of the Code of Criminal Procedure 1973. The statutory procedures which are enunciated have to be invoked. Adequate provisions have been made in the statute to deal with the filing of a complaint and for investigation in accordance with law.
"Real estate projects across the country may be facing difficulties. The intervention of the Court cannot be confined to one or a few selected projects. Judicial time is a precious resource which needs to be zealously guarded. We have to always be mindful of the opportunity cost involved in exercising our discretion to admit a petition and to intervene, in terms of diversion of time and resources away from other matters where our intervention would be more apposite and necessary", reflected the bench.
The judgment proceeds to distinguish the cases of Amrapali and Unitech which have seized the indulgence of the Court, orally remarking that in both these instances, the proceedings before the top court had been by way of consequence of prior proceedings at other forums.
"In certain cases in the past, this court has intervened on behalf of home buyers. These include :
(i) Projects of Amrapali Group (Bikram Chatterji v Union of India7); and
(ii) Unitech matter (Bhupinder Singh v Unitech Ltd8)"
The bench clarified that nothing contained in the present judgment will affect those proceedings or similar cases which have been monitored.
Case: Upendra Choudhury vs. Bulandshahar Development Authority [Writ Petition (Civil) No 150 of 2021]
Citation : LL 2021 SC 91