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[Maradu Flats Demolition] Homebuyers Cannot Be Deprived Of Interim Compensation Merely For Want Of Execution Of Sale Deed: SC

Mehal Jain

11 Feb 2021 2:35 PM IST

    • [Maradu Flats Demolition] Homebuyers Cannot Be Deprived Of Interim Compensation Merely For Want Of Execution Of Sale Deed: SC

    In connection with the Maradu flat demolition case, the Supreme Court on Tuesday opined that once it has been established that the home buyers have in fact made payments to the two builders, they are also entitled to interim compensation and cannot be deprived merely for the reason that no sale deed has been executed.The bench of Justices Navin Sinha and Krishna Murari was informed by...

    In connection with the Maradu flat demolition case, the Supreme Court on Tuesday opined that once it has been established that the home buyers have in fact made payments to the two builders, they are also entitled to interim compensation and cannot be deprived merely for the reason that no sale deed has been executed.

    The bench of Justices Navin Sinha and Krishna Murari was informed by advocate Gaurav Agrawal, Amicus Curiae, that 13 persons have been identified with proof that they had made payment of a total amount of Rs.4,73,50,400/-. Directions were solicited from the Court for payment of interim compensation to them also from the concerned builders i.e. Holy Faith Builders & Developers and Jain Housing & Constructions Ltd. for a sum of Rs.1,11,70,754/- and Rs.3,61,79,646/- respectively.
    Senior Counsel Mr. V. Chitambaresh, appearing on behalf of two persons also submitted that they are from amongst the 13 persons who have paid full price as home buyers and possession has also been given to them on 01.02.2015 and 20.12.2013, even though only an agreement for sale had been executed and the sale deed has not been registered. He prayed that they should not be excluded from being awarded interim compensation also.
    "We are of the considered opinion that once it has been established that the aforesaid 13 home buyers have in fact made payments to the two builders, they are also entitled to interim compensation and cannot be deprived merely for the reason that no sale deed had been executed, the facts not being in dispute", said the bench.
    The bench clarified that the value of the compensation claimed by these 13 persons, has to be determined without taking into account the proportionate value of the land.
    It may be recalled that a Committee was constituted, headed by Justice (Retd.) K. Balakrishnan Nair, in order to look after the payment of the amount to each of the flat owners, as well as to work out the actual amount paid.
    On Tuesday, the bench observed that the Committee while dealing with the claim of home buyers whether the proportionate cost of the land should also be included in the value stated to have been paid to the builder, in the relevant extract, has observed as follows:
    "We think that this point may be clarified by the Hon'ble Supreme Court – whether we should include the value of land shown to have been paid to the builder and also acknowledged by the builder as having been received, in the amount actually paid by the claimants. In view of the opposition by most of the Flat Owners to receive back today the price of the undivided share of land that they paid 7-12 years ago, we exclude the land value from the amount payable by the builder to the Flat Owners for the time being."
    In this behalf, the bench was of the considered opinion that, specially in absence of any consensus amongst the home buyers themselves, with the majority opinion in favour of detaining the lands, the issue cannot be decided in the present proceed- ings. "The aggrieved are at liberty to take appropriate proceedings", said the bench.
    The bench clarified that the value paid by a home buyer to the builder, therefore, has to be determined minus the proportionate value of the land.
    Background
    The Supreme Court had in November last year directed the four developers in the Maradu flat demolition case to submit their written submissions pertaining to their proposal to deposit the interim compensation within a period of four weeks. 

    A Bench of Justices RF Nariman, Krishna Murari and Aniruddha Bose heard the matter and warned the developers that this would be the last opportunity to deposit the money or else the Justice Balakrishnan Nair Committee would be empowered to sell the assets of the developers that had been attached.

    The Apex Court, on being informed by Senior Advocate Gopal Sankaranarayanan that the Committee sought for an amicus as personal attacks had been made against it on affidavit by the developers, appointed Advocate Gaurav Aggarwal to assist the Court and meet the Committee.

    The mandate of the Committee has also been extended till further orders.

    In today's hearing, Justice Nariman issued a stern warning to the developers to place another proposal stipulating concrete methods of paying the compensation, or otherwise to face the course that would be followed by law.

    "We have read the latest report and it is clear that a balance somehow has to be paid by all of you. All of the assets at this moment stand attached. Keeping Jain apart, so far as the other three builders are concerned, at least two of gave some proposal to the Committee which was rejected."

    The Court, after making this observation, also informed the Counsels present that the matter would now be taken up on one date in December and all the Counsels would be allowed to make their submissions, including the Contempt Petitioner.

    In the previous hearing, the Supreme Court had directed State of Kerala to file an Affidavit within three weeks, outlining the steps they had taken in pursuance of the 23rd September, 2019 order of the Supreme Court.

    In the 23.09.2019 Order, a Supreme Court Bench comprising of Justices Arun Mishra and S. Ravindra Bhat had noted that State of Kerala had no concrete plan carved out to undertake the demolition.

    Further, permission had not been obtained from KSCZMA to raise construction and "it is due to such violation and tortuous action, the entire environment is being degraded and coastal zones are being illegally occupied".

    The Court further noted that rather than preventing the violations, the authorities were mobilizing public opinion and time had come "to hold them responsible for their active connivance in such activities of degrading the environment and violation of the coastal zone regulations etc".

    Accordingly, the State of Kerala was directed to submit a concrete plan to prevent such violations in future and also to take action against the existing violators.

    "It is also to be put on record as to what course of action they propose against all such existing violators and how many such constructions exist at present in the State of Kerala which are in violation of the notification issued by the Coastal Regulation Zone Authority".

    On 27.09.2019, the Supreme Court then directed the State Government to pay, out of its own funds, a sum of Rs. 25 lakhs to each of the flat owners who were being evicted, and that the amount would not be recoverable from the Builder/Promoter/ the persons/officials responsible for raising the

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    Tags
    Supreme CourtMaradu Flat DemolitionCompensationExecution of Sale DeedJusitce Navin SinhaJustice Krishna Murari
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