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2022 DIGILAW 158 (ALL)

Logix Buildtech Private Limited v. State of U. P.

2022-02-04

ASHUTOSH SRIVASTAVA, PRITINKER DIWAKER

body2022
JUDGMENT : Ashutosh Srivastava, J. 1. Sri Ashutosh Sharma, learned counsel for the petitioner, Sri Nagendra Kumar Pandey, learned counsel for the State-respondents and Sri Udit Arora with Sri Prashant Shukla, learned counsel for respondent No.3. 2. Instant writ petition has been filed, assailing the order dated 29.08.2019, passed by the Chairman, Real Estate Regulatory Authority, Gautam Budh Nagar, whereby and whereunder the petitioner has been directed to give possession of the unit in the Project in question i.e. “Logix City Centre” within 45 days from the date of the order alongwith delay penalty @ Rs.20/-per sq. feet per month from 24.09.2013 to 30.04.2016 and @ MCLR + 1% from 01.05.2016 to date of grant of Occupation/Completion Certificate or date of grant of possession as also the Notice dated 19.11.2019 issued by the respondent No.2 in pursuance of the order dated 29.8.2019 requiring the petitioner to submit the compliance report failing which proceedings u/s 63 of the RERA Act, 2016, would be initiated and the entire amount shall be recovered as arrears of Land Revenue u/s 40 of the Act. 3. It is contended on behalf of the petitioner that it was allotted approx. 25,000 sq. meters of land bearing No. BW-58, Sector 32, Noida, Gautam Buddh Nagar, for its “Logix City Centre” project by NOIDA on lease and a lease deed dated 23.7.2010 was executed in favour of the petitioner. The project was completed and the Occupancy Certificate was received for the entire project on 09.03.2017. The petitioner thereafter vide letter dated 16.03.2017 offered the possession of the premises to the respondent No.3, being Commercial Unit No. 1017 on the 10th floor. 4. It is next contended on behalf of the petitioner that the Real Estate (Regulation and Development) Bill got approved by the Rajya Sahbha on 10.03.2016 and Lok Sabha on 15.03.2016. The Bill got the assent of the Hon'ble President of India on 25.03.2016. The UPRERA Act and the Rules framed thereunder became applicable from 01.08.2017. As per Section 3 of the RERA Act, the ongoing projects were required to apply for registration on or before 31.07.2017. As per the definition of “Ongoing Project” contained under Rule 2(h) of the Rules, the registration of such projects were not required for which the completion of construction, application for occupancy/completion has been made on or before 26.07.2017 i.e. the date of implementation of the UPRERA Rules. 5. As per the definition of “Ongoing Project” contained under Rule 2(h) of the Rules, the registration of such projects were not required for which the completion of construction, application for occupancy/completion has been made on or before 26.07.2017 i.e. the date of implementation of the UPRERA Rules. 5. On the strength of the above, it is submitted that since the project of the petitioner was completed well before the application of RERA Act and UPRERA Rules, RERA had no jurisdiction to entertain or try any complaint in respect of the project in question. It is submitted that although an offer for possession letter dated 16.03.2017 had already been issued to the respondent No.3, respondent No.3 deposited a sum of Rs.33,45,754/- towards the principal amount of the Unit and is further required to pay a sum of Rs.24,97,512/- towards the principal amount. Respondent No.3 proposed to settle the matter with the petitioner by offering to pay a sum of Rs.30 lacs. The petitioner after adjusting all the dues, requested respondent No.3 to pay an amount of Rs.30,56,233/- towards full and final payment in respect of the Unit in question within 15 days. Respondent No.3 failed to make the payment and at present a sum of Rs.24,97,512/- towards the principal amount, a sum of Rs.17,89,152/- towards interest on delayed payment and a sum of Rs.2,91,504/- towards the holding charges is due against respondent No.3. Respondent No.3, instead of making the payments, instituted a complaint before the RERA Authorities. The petitioner appeared in the proceedings and filed its objections. Respondent No.2, without considering the objections of the petitioner, has passed the impugned order dated 29.08.2019. 6. The petitioner has challenged the impugned order principally on the ground that:- (i) Respondent No.2 had no jurisdiction to try the complaint filed by respondent No.3 as the project in question was excluded from the definition of Ongoing Projects and as such registration of the same was not required as per Section 3(1) of the RERA Act and Rule 2(h) of the UPRERA Rules, as the petitioner had already obtained the Occupancy Certificate on 09.03.2017 i.e. much prior to the applicability and enforceability of the Real Estate (Regulation and Development) Act, 2016 and the Rules framed thereunder. (ii) The complaint of respondent No.3 was not maintainable as the offer for the possession letter dated 16.03.2017 had already been issued by the petitioner in favour of respondent No.3 prior to the commencement and applicability of the Act and the Rules. (iii) The project of the petitioner was never registered with the Regulatory Authority and as a matter of fact, on the date of the enforceability of the Act, the project in question stood completed and no completion date or time-line for the project could arise. 7. The counsel for respondent No.3 has opposed the writ petition by filing counter affidavit. He contends that the petitioner had to deliver the possession of the Unit within a period of 11 months from the date of execution of the agreement dated 03.05.2012 with a grace period of three months i.e. till December, 2013, but utterly failed to do so. As a matter of fact, till date the petitioner has not handed over the possession of the said Unit. The possession was first offered after a delay of four years in 2017. No registry of any of the Units has been done so far and only a sub-lease has been executed by the petitioner. The Occupancy Certificate issued by NOIDA to the petitioner is only a partial occupancy certificate and the petitioner was required to fulfill six conditions laid down therein which the petitioner miserably failed to comply. The petitioner has dues of over Rs.200 crores outstanding to be paid to NOIDA in compliance of one of the conditions of issuance of the Occupancy Certificate which too, it failed to pay. The interpretation of Section 3 of the Act as being given by the petitioner is incorrect and misleading. The UPRERA Rules got notified on 27.10.2016 and not in 2017 as alleged by the petitioner. The date of implementation of the UPRERA Rules is 27.10.2016 and since the petitioner has obtained the conditional Occupancy Certificate subsequent to the date of implementation of the Rules, the project of the petitioner falls under the ambit of “Ongoing Project” and as such the petitioner is amenable to the provisions of the RERA Act. It is further contended that even unregistered projects come under the ambit of the Act in case any dispute arises between the developer and consumer. It is further contended that even unregistered projects come under the ambit of the Act in case any dispute arises between the developer and consumer. Reliance has been placed upon a decision of the Bombay High Court dated 31.07.2018 passed in W.P.(C) No. 908 of 2018 “Mohammad Zain Khan vs. Maharashtra Real Estate Authority and others”. It is next contended that the impugned order passed by respondent No.2 is perfectly legal, warranting no indulgence by this Court under Article 226 of the Constitution of India and the writ petition, being devoid of merits, is liable to be dismissed. 8. We have considered the rival submissions of the parties and have perused the record. We find that the legal submissions advanced on behalf of the petitioner reflect upon the applicability of the Real Estate (Regulation and Development) Act, 2016, i.e. whether it is retrospective/ retroactive or prospective in its operation with reference to the ongoing projects. 9. Before we proceed to consider the above issue, it would be apt to understand the import of certain sections, definitions contained under the Act and the Rules framed thereunder. Section 3 of the Real Estate (Regulation and Development) Act, 2016 which came into effect on 25th March, 2016, is being reproduced below:- “Section-3:-Prior registration of real estate project with Real Estate Regulatory Authority-(1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act: Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act: Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration. (2) Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required- (a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases: Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act; (b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act; (c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project. Explanation.—For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand alone real estate project, and the promoter shall obtain registration under this Act for each phase separately.” 10. Thus under Chapter II of the Act 2016, registration of real estate projects become mandatory and to make the statute applicable and to take its place under Sub-section (1) of Section 3, it was made statutory that without registering the real estate project with a real estate regulatory authority established under the Act, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner a plot, apartment or building, as the case may be in any real estate project but with the aid of provisions to Section 3(1), it was mandated that such of the projects which are ongoing on the date of commencement of the Act and more specifically the projects to which the completion certificate has not been issued such promoters shall be under obligation to make an application to the authority for registration of the said project within a period of three months from the date of commencement of the Act. With certain exemptions being granted such as the projects covered by sub section (2) of Section 3 of the Act, as a consequence, all such home buyers agreements which have been executed by the parties inter se have to abide the legislative mandate in completion of their ongoing projects. 11. With certain exemptions being granted such as the projects covered by sub section (2) of Section 3 of the Act, as a consequence, all such home buyers agreements which have been executed by the parties inter se have to abide the legislative mandate in completion of their ongoing projects. 11. The term “ongoing project” has not been so defined under the Act while the expression “Real Estate Project” is defined under Section 2(zn) of the Act, which reads as under:- “2(zn)-real estate project” means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto” 12. As per the legislative mandate, the Act is intended to apply even to the ongoing real estate projects. The expression “On Going Project” has been defined under Rule 2(h) of the U.P. Real Estate (Regulation and Development) Rules, 2016, which reads as under:- “2(h) "ongoing project" means a project where development is going on and for which completion certificate has not been issued but excludes such projects which fulfill any of the following criteria on the date of notification of these rules: (i) where services have been handed over to the Local Authority for maintenance. (ii) where common areas and facilities have been handed over to the Association for the Residents' Welfare Association for maintenance. (iii) where all development work have been completed and sale/lease deeds of sixty percent of the apartment/houses/plots have been executed. (iv) where all development works have been completed and application has been filed with the competent authority for issue of completion certificate.” 13. (iii) where all development work have been completed and sale/lease deeds of sixty percent of the apartment/houses/plots have been executed. (iv) where all development works have been completed and application has been filed with the competent authority for issue of completion certificate.” 13. The expression “Completion Certificate” has been defined under Section 2(q) and “Occupancy Certificate” under Section 2(zf) of the Act, which reads as under:- “2(q) “completion certificate” means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws; “2(zf) “occupancy certificate” means the occupancy certificate, or such other certificate, by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;” 14. Looking at the scheme of the Rules, the Completion Certificate can only be issued after all norms etc. have been complied with and as such, a partial Completion Certificate cannot be taken to mean a Completion Certificate in the original sense and such projects have to be taken to be “Ongoing Projects”. 15. Looking to the scheme of Act 2016 and Section 3 in particular of which a detailed discussion has been made, all “ongoing projects” that commence prior to the Act and in respect to which completion certificate has not been issued are covered under the Act. It manifests that the legislative intent is to make the Act applicable not only to the projects which were yet to commence after the Act became operational but also to bring under its fold the ongoing projects and to protect from its inception the inter se rights of the stake-holders, including allottees/home buyers, promoters and real estate agents while imposing certain duties and responsibilities on each of them and to regulate, administer and supervise the unregulated real estate sector within the fold of the real estate authority. 16. The Apex Court recently in M/s Newtech Promoters and Developers Pvt. Ltd. Vs. 16. The Apex Court recently in M/s Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P. & others (Civil Appeal No.(s) 6745-6749 of 2021 arising out of SLP (Civil) No.(s) 3711-3715 of 2021 had the occasion to consider as to whether the Real Estate (Regulation and Development) Act, 2016 is retrospective or retroactive in its operation and what will be its legal consequence, if tested on the ambit of the Constitution of India. The Apex Court after extensive analysis of the aims and objects, provisions of the Act observed as under:- “41. The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible, i.e., the legislature consciously enacted a retroactive statute to ensure sale of plot, apartment or building, real estate project is done in an efficient and transparent manner so that the interest of consumers in the real estate sector is protected by all means and Sections 13, 18(1) and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of the consumers/ allottees. In the given circumstances, if the Act is held prospective then the adjudicatory mechanism under Section 31 would not be available to any of the allottee for an ongoing project. Thus, it negates the contention of the promoters regarding the contractual terms having an overriding effect over the retrospective applicability of the Act, even on facts of this case. 42. What the provision further emphasizes is that a promoter of a project which is not complete/sans completion certificate shall get the project registered under the Act but while getting the project registered, promoter is under an obligation to prescribe fresh timelines for getting the remaining development work completed and from the scheme of the Act, we do not find that the first proviso to Section 3(1) in any manner is either violative of Articles 14 and 19(1)(g) of the Constitution of India. The Parliament is always competent to enact any law affecting the antecedent events under its fold within the parameters of law.” 17. The Apex Court further drawing a distinction between retrospective and retroactive statutes observing as under:- “48. The distinction between retrospective and retroactive has been explained by this Court in Jay Mahakali Rolling Mills Vs. Union of India and Others, which reads as under:- “8. The Apex Court further drawing a distinction between retrospective and retroactive statutes observing as under:- “48. The distinction between retrospective and retroactive has been explained by this Court in Jay Mahakali Rolling Mills Vs. Union of India and Others, which reads as under:- “8. “Retrospective” means looking backward, contemplating what is past, having reference to a statute or things existing before the statute in question. Retrospective law means a law which looks backward or contemplates the past; one, which is made to affect acts or facts occurring, or rights occurring, before it comes into force. Retroactive statute means a statute, which creates a new obligation on transactions or considerations or destroys or impairs vested rights.” 49. Further, this Court in Shanti Conductors Private Limited and Another Vs. Assam State Electricity Board and Others, held as under:- “67. Retroactivity in the context of the statute consists of application of new rule of law to an act or transaction which has been completed before the rule was promulgated. 68. In the present case, the liability of buyer to make payment and day from which payment and interest become payable under Sections 3 and 4 does not relate to any event which took place prior to the 1993 Act, it is not even necessary for us to say that the 1993 Act is retroactive in operation. The 1993 Act is clearly prospective in operation and it is not necessary to term it as retroactive in operation. We, thus, do not subscribe to the opinion dated 31.8.2016 [Shanti Conductors (P) Ltd. v. Assam SEB, (2016) 15 SCC 13 ] of one of the Hon'ble Judges holding that the 1993 Act is retroactive.” 50. In the recent judgment of this Court rendered in the case of Vineeta Sharma Vs. Rakesh Sharma and Others wherein, this Court has interpreted the scope of Section 6(1) of the Hindu Succession Act, 1956, the law of retroactive statute held as under:- “61. The prospective statute operates from the date of its enactment conferring new rights. The retrospective statute operates backwards and takes away or impairs vested rights acquired under existing laws. A retroactive statute is the one that does not operate retrospectively. It operates in futuro. However, its operation is based upon the character or status that arose earlier. Characteristic or event which happened in the past or requisites which had been drawn from antecedent events. A retroactive statute is the one that does not operate retrospectively. It operates in futuro. However, its operation is based upon the character or status that arose earlier. Characteristic or event which happened in the past or requisites which had been drawn from antecedent events. Under the amended Section 6, since the right is given by birth, that is, an antecedent event, and the provisions operate concerning claiming rights on and from the date of the Amendment Act.” Concluded as follows:- 51. Thus, it is clear that the statute is not retrospective merely because it affects existing rights or its retrospection because a part of the requisites for its action is drawn from a time antecedent to its passing, at the same time, retroactive statute means a statute which creates a new obligation on transactions or considerations already passed or destroys or impairs vested rights. 52. The Parliament intended to bring within the fold of the statute the ongoing real estate projects in its wide amplitude used the term “converting and existing building or a part thereof into apartments” including every kind of developmental activity either existing or upcoming in future under Section 3(1) of the Act, the intention of the legislature by necessary implication and without any ambiguity is to include those projects which were ongoing and in cases where completion certificate has not been issued within fold of the Act. 54. From the scheme of the Act 2016, its application is retroactive in character and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its fold and therefore, vested or accrued rights, if any, in no manner are affected. At the same time, it will apply after getting the ongoing projects and future projects registered under Section 3 to prospectively follow the mandate of the Act 2016.” 18. In the light of the observations made by the Apex Court as culled out herein-above, we find that the occupancy certificate dated 09.03.2017 issued in favour of the petitioner by the NOIDA Authority and heavily relied upon by the petitioner, is in fact a partial occupancy certificate which was issued to the petitioner on the basis of an inspection carried out by NOIDA on 22.02.2017 as is apparent from the recitals of the certificate filed as Annexure-1 to the writ petition. Besides the certificate has been issued after the Act came into force and as such, the argument of the learned counsel for the petitioner that the project of the petitioner was outside the ambit of the RERA Act and the complaint of the respondent No.3 was not maintainable, merits no consideration. In the absence of a completion certificate from the NOIDA, the project of the petitioner has to be treated to be an “ongoing project” as defined under Rule 2(h) of the U.P. Real Estate (Regulation and Development) Rules 2016 and consequently, the complaint at the instance of respondent No.3 is maintainable. Nothing has been brought on record by the petitioner to demonstrate that the project in question, stands excluded by virtue of fulfilling any of the criteria laid down under Rule 2(h) of the Rules. 19. In view of the above, we find that the impugned order passed by the learned Chairman, Real Estate Regulatory Authority, Gautam Buddh Nagar, does not suffer from any infirmity or illegality warranting interference under Article 226 of the Constitution of India. 20. The writ petition lacks merit and is, accordingly, dismissed. The interim order dated 05.12.2019 is discharged. 21. No order as to costs.