RERA ACT- Inconvenience In Making Pre-Deposits Not An Onerous Circumstance Warranting Relaxation Of A Statutory Mandate: Punjab And Haryana High Court

In a case about a batch of petitions filed by several real estate developers against orders passed by the Haryana Real Estate Regulatory Authority involving common questions of law regarding S.43(5) of RERA Act, 2016, which sought to get a relaxation from High Court under A.22, in making pre-deposits, Justice Vinod S. Bhardwaj has observed that "A Petitioner seeking the indulgence of Writ Court to seek exemption from statutory mandate must establish strong reasons and to establish a deprivation of its statutory remedy of appeal by demonstrating to the satisfaction of Court, it's inability to arrange for pre-deposit despite all reasonable efforts."

The facts of the case are as follows:

Several petitions have been filed before the High Court invoking its extraordinary jurisdiction to obviate the hardship caused to the petitioners, because of the condition of pre-deposit mandated under S.43(5) of RERA Act and the orders passed by the Haryana Real Estate Regulatory Authority in that regard. In most of the petitions, the allottees were allotted apartments by petitioner companies and allottees had committed default in the payments and when a complaint was filed before the Real Estate Regulatory Authority, the authority decided the complaint against the petitioner companies without paying any heed to allottee defaults. In one project the construction of the project and subsequent handover of the allotted Unit was delayed because of NGT orders restricting construction works in NCR and in this case also, the allottee's complaint was allowed without any consideration to reasons behind the delay as well as the contractual agreement between the parties. None of the petitioners had disputed the factual aspects noted by the authority.

Arguments advanced by Petitioners

Learned counsels for petitioners respectfully submitted that the impugned orders passed by RERA were illegal, arbitrary and opposed to the principles of natural justice, equity and fair play because they were passed without any prayer for the relief awarded. Learned counsel for the petitioner further argued that although RERA 2016 provides for the remedy of appeal, S.43(5) of the same Act warrants a pre-deposit to be made before such an appeal by the Promoter can be heard, which the counsel argued was onerous and caused extreme hardship to petitioners and also rendered the appeal meaningless and the petitioners remediless. It was also stated that any complaint by the respondents under S.12, S.14, S.18 and S.19 of 2016 Act for relief and interest were to lie only before an adjudicating officer and not before the Authority and thus, the order passed by RERA was devoid of jurisdiction and void ab initio and the Authority had acted by usurping the jurisdiction of Adjudicating officers which itself had rendered the order perverse and illegal. And thus, they had prayed that the High Court should waive the condition of pre-deposit by exercising its powers under A.226 of the Constitution of India, in further of interest of justice. Another argument raised was that some of the petitioners were already suffering from financial hardship and thus, diversion of funds to make the pre-deposits would be detrimental to other allottees as the petitioner in question would not be able to complete one of its projects. Learned counsel for another petitioner had submitted that the petitioner's company had already invoked liquidation proceedings and any such deposit would double their hardship.

Arguments advanced by Respondent

Learned counsel for respondents vociferously argued that the writ petitions themselves are an abuse of the process of law considering the promoters had been intentionally delaying the proceedings and indulging in multiple litigations instead of settling the award. Further submitting that the RERA order was not suffering from any jurisdictional error or illegality, in passing the awards favouring the allottees, the learned counsel submitted that the issues raised in the petitions in question have already been decided by the Supreme Court against the promoters in Newtech Promoters judgment. The learned counsel further submitted that the relief provided by the Authority comes within its domain as per S.34 and S.37 of the Act and thus, writ petitions should be dismissed considering there is an alternative remedy available to the petitioners.

Judgment

The Court out rightly perused several sections of RERA Act, 2016 in question and noted that the Act explicitly and clearly entitles allottees to seek return amount with interest and compensation under S.12 which also casts a liability on the promoters to furnish correct facts in advertisements and if not done so, then the investment must be returned along with interest and compensation. Further noting that S.18 entitles an allottee to either withdraw from the project and seek the interest, investment and compensation or not withdraw and take interest from the promoter for each month's delay in handling possession and thus, on a perusal of Punjab and Haryana High Court's judgment titled Experion Developers Private Limited v. State of Haryana & Ors. and apex court's judgment in New Tech Promoters and Developers Private Limited v. State of UP & Ors., the Court stated that the "power of adjudication and determination for relief is conferred upon the regulatory authority itself and not upon the adjudicator. And the Authority has the jurisdiction to entertain complaints seeking a refund of the amount and interest on the refund and penalty there and not the Adjudicating officer."

Regarding the respondent's argument that the pre-deposit requirement mandated by S.43(5) could not be waived by High Court's power under A.226, the Court looked at L. Chandra Kumar v. Union of India & Ors. and asserted that High Court's power under A.226 are so significant that they form a part of the basic structure of the Constitution and courts can exercise those powers to ensure complete justice, and the statutory provisions of RERA, 2016 cannot curtail these Constitutional powers which cannot be taken away even through constitutional amendments and thus, the Court stated that it had the jurisdiction to alter/modify the pre-deposit requirement.

The Court then proceeded to look into whether sufficient grounds existed to conclude that this condition of mandatory pre-deposit would be harsh/onerous, as the petitioners asserted. Court referred to apex court's judgment in M/S Newtech Promoters and Developers Private Limited v. State of UP and Others etc. and also looked at the black's law dictionary definition of onerous/hardship and concluded that the petitioners had failed to give any evidence to demonstrate the hardship caused by this condition of pre-deposits and no statement of financials was placed before the court regarding the same. The Court further noted that the "doctrine of 'cases omissus' would always apply to the interpretation of statutory provisions in the exercise of the power of judicial review. The court cannot add something to the statutory provisions which are not deductible from its plain reading."

Stating that the petitioner's contentions were devoid of any merit, the court dismissed the petitions after ordering petitioners to four weeks from the date of this order to make the pre-deposit and for any further extension, the petitioners were directed to deposit a sum of INR 5000 per case to the Poor Patient Welfare Fund, PGIMER, Chandigarh.