BIKRAM CHATTERJI & ORS. V. UNION OF INDIA 2019 (19) SCC 161

FACTS: 

1. In Noida and Greater Noida during the year of 2011, numerous real estate projects for housing were started. Among them, one company called Amrapali Group of Companies has proposed to construct approximately 42,000 flats. The buyers who were interested in the flats invested their whole life savings and some of them even took out a loan from the bank to pay the housing amount. Most of the buyers have paid the amount upto 50 to 100% abiding by the payment schedule. But the company( Amrapali) did serious and rigorous reach of their obligation by failing to deliver the flats within a period of 36 months to the buyers after obtaining the amount from the same.

2. Some buyers had approached the National Consumer Dispute Redressal Commission by filing consumer complaints under section 12(1)(c) of the Consumer Protection Act, 1986. The Bank of Baroda reached out to the National Company Law Tribunal by filing a company petition under section 7 of the Insolvency and Bankruptcy Code, 2016 to trigger the Corporate Insolvency Resolution process in the matter of M/S Amrapali Silicon City pvt. Ltd. According to the Noida and Greater Noida Authorities, in case where the lease deed got Snapped, the buildings that were under construction have to be demolished within 3 months. The bankers have charge on the property as the land has been mortgaged to them and until and unless their amount is paid, the builder will have no right over that particular property as well as the buyers can also not possess the same.

3. It was construed by the petitioners that buyers can not be categorized as ordinary financial creditors because they have invested their whole life time savings into that property. Also, it is a violation of Art. 21 of the Indian constitution which is provided to everyone as by subjecting the buyers to the liquidation proceedings of discriminatory nature. The very survival of the buyers had been jeopardized. It was contended that the buyers were not provided with any equal protection under the Insolvency and Bankruptcy Code, 2016.

4. This particular case was challenged many times before the Hon’ble court and numerous orders have been passed by the Supreme court related to resolve the validity of the lease and the fraudulent activities, the IAs was filed by CREDAI and NAREDCO. Regarding this,  the recent judgement has been given by the Hon’ble court on 23rd February,2023. 

ISSUES:

1. Whether the mortgage/charge in favour of the bank was valid?
2. Whether the interest of the buyers in the alloted plots were required to be protected and in what manner?

ARGUMENTS OF PETITIONERS:

The learned counsel appearing for the applicants submits that by the notification dated 9th June,2020 that the rate of interest was made applicable by the State of UP that is to be charged by the various builders/ project proponents which was brought to the notice of the court after the first order came and the court took cognizance of the notification dated 9th June, 2020. The counsel further submitted that once the orders have been passed after hearing the parties on perusal of available records, it is not valid to file miscellaneous application for recalling such orders and thus was not valid and justified under the guise of miscellaneous application unless there is any manifest apparent error if mistake being traced out in the previous order of November.

ARGUMENTS OF RESPONDENTS: 

The respondent contended that, so far as IAs filed by the CREDAI and NAREDCO, they have not filled any IA upto the passing of order dated 7th November,2022, all came into the pool after 25th August, 2020 order, which came to be passed by this court at a later stage and admittedly either of the builders or promoters were not even remotely concerned, whether directly or indirectly, in reference to the projects of Amrapali Group of Companies of which the judicial cognizance was taken up by this court.

JUDGEMENT:

• The Supreme court of India has given an order on 23rd July, 2019 in Bikram Chatterji & ors. V. Union of India by providing various instructions to the concerned authority as was enumerated in the detailed order. After passing the judgement on 23rd July, 2019, the matter was further listed for further hearing with an object to make sure that the interest of the buyers was being protected and to comply with the directions.

• Apart from the default on the part of the Amrapali Group of Companies, the court receiver has submitted his note exploring the possibilities for securing the funds for execution of stalled projects of Amrapali Group of Companies. Meanwhile, when the court was taking a call based on the receiver’s report, to take further course of action to make sure that the directions under para 156 of 2019 order, is properly in compliance with. 

• An I.A No. 4139 of 2020 was filed by Ace Group of Companies, it was claimed by them in their application that they may also get the benefit of reduction in the rate of interest which is to be charged by the concerned authority. No matter record were available that is to be placed by Ace Group of Companies, and no builder of the same company could claim parity with the Amrapali company for the reason that by the judgement of 23rd July, 2019, does not only cancelled the lease deed executed between the Amrapali company and Noida/ Greater Noida Authorities, but also appointed a court receiver and issued directions which is mentioned under para 156 of 2019 order.

• For those who were working and covered under the Government of Uttar Pradesh, general instructions were issued on 9th June, 2020 reducing the rate of interest to be charged by the authorities in rem were applicable to all the project proponents and builders. The court reduced the rate of interest on the outstanding premium and was applicable to all the 114 plots which were alloted from the year 2005 by Noida/Greater Noida Authorities.

• The initial proceedings of the case Bikram Chatterji (supra) was only confined to, securing the interests of buyers of Amrapali company and later on, an interim application was filed by the Ace Company, but it was observed by the court that either of the company in no manner was related to the functioning of the Amrapali Group of Companies with reference to para 156.

• Further submission was made before the court that, if anyhow the court arrives at the conclusion that the orders passed by the Hon’ble Supreme court on the IAs filed at the instance of the builders is to be recalled, then at least their IAs must be restored and heard on merits.

• The court held that, though the submission on the face appears to be attractive, but has no validity and weightage for the reason that the IAs were filed by the concerned companies. Also, they were not connected in any ways with the plight of buyers of Amrapali company. Thus, the IAs do not deserve any indulgence, consequently, the IAs were dismissed. 

REFERENCES:

https://www.scconline.com/DocumentLink/MEW4q4fB

https://www.advocatekhoj.com/library/judgments/announcement.php?WID=16090

This article is written by Deepanshi Srivastava of Shambhunath Institute of Law, Legal intern at legal Vidhiya.

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