| CITATION | MANU/SC/0947/2019 |
| DATE OF JUDGEMENT | 23rd JULY, 2019 |
| COURT | SUPREME COURT OF INDIA |
| APPELLANT | BIKRAM CHATTERJEE |
| RESPONDENT | UNION OF INDIA |
| BENCH | JUSTICE ARUN MISHRA JUSTICE UDAY UMESH LALIT |
INTRODUCTION
This decision by the Supreme Court of India brought about a change in the real estate sector after the introduction of RERA (Real Estate [Regulation and Development] Act, 2016) thus protecting the rights of property owners against property developers and perpetrators of violence.[1] This attempt failed until 2019 when happy home buyers filed a petition with the Supreme Court of India. Noida and Greater Noida Development Authority (hereinafter referred to as “Local Authority”) had rented out houses worth Rs 3,000 million and the concerned parties claimed that they were paid better compared to the home buyers. Also, there is complete negligence on the part of the local authorities and financial institutions in taking appropriate action.[2]
Facts of the Case
- Aggrieved by the insolvency proceedings initiated by the National Company Law Tribunal (NCLT), a large number of domestic buyers filed suit against M/ by filing petitions in insolvency petitions (No.: (IB)- 121(PB) / 2017) filed by Bank of Baroda. Amrapali Silicon City Private Limited.
- Home buyers said that the initiation of insolvency proceedings against M/s Amrapali Silicon City Private Limited and the ban imposed on it has protected thousands of home buyers who own homes in various projects developed by M/s Amrapali Silicon Interests.[3]
- After hearing the complaints from home buyers and allegations of misuse of funds against the Amrapali Group, the Supreme Court decided to accept the appeal and order an audit of all entities in the Amrapali Group.[4]
- In the High Court, the claim of the home buyers was challenged by the authorities of Noida and Greater Noida (“Authorities”) other than the Amrapali Group, who were involved in a dispute with the banks that created the project and the banks that had given loans to the Amrapali Group in various plantations, claiming that their rights in the project took precedence over the rights of the home buyers in the lease agreements and in the payment of mortgages.[5]
Issues Raised
- Validity of claims made by authorities regarding activities established by Amrapali Group.
- Validity of claims made by banks regarding activities established by Amrapali Group.
- Validity of fees paid by the bank for projects established by Amrapali Group. Act (“RERA Act”) will be repealed.
- What relief can be provided to the home buyers in light of the present facts and circumstances?
CONTENTIONS OF THE PETITIONER
The policy debt cannot be considered as the home buyer’s debt, and the fees paid by the home buyer should be considered as the most important.[6]
The principle of public trust enshrined in Article 21 of the Constitution of India applies to public officials who have the duty to act fairly and properly in promotion of the public and public interest.
CONTENTIONS OF THE RESPONDENT
The loan agreement signed between the bank and Amrapali Group is valid and enforceable, and the bank is responsible for the project until the loan is repaid according to its terms.[7]
The Buyer Is not a secured creditor and therefore has no right, title or interest in the project under the Buyer Agreement.
JUDGEMENT OF THE CASE
The Supreme Court held that-
Amrapali Group’s RERA registration under the RERA Act will be cancelled and future work will be carried out by NBCC (India) Ltd;
Various leases granted to the officials of Amrapali Division for the relevant works are cancelled and all rights are now vested in the Trustee Court (Senior Advocate Shri R. Venkataramani)[8]
Authorities and banks are not allowed to sell houses or lands that they have rented to settle debts and all debts must be cleared through the sale of other properties seized by the Amrapali Group;
The rights of the Tenant will vest in the Purchaser (formerly in the Amrapali Group) who will sign the tripartite agreement on his behalf by the authorised purchaser and do all necessary things and ensure that the name is transferred to the home purchasers as the name is transferred to them.[9]
ANALYSIS
This case concerns the Amrapali Group, a real estate company in India that failed to deliver residential projects to homebuyers despite collecting substantial amounts of money. The homebuyers, including Bikram Chatterjee, approached the Supreme Court seeking justice as the company did not deliver the promised flats and failed to return the money.[10]
The RERA Registration of Amrapali Group under RERA Act shall stand cancelled and the various projects shall now henceforth be completed by NBCC (India) Ltd. Authorities and Banks shall have no right to sell the flats of the home buyers or the land leased out for the realization of their dues and all their dues shall have to be recovered from the sale of other properties of Amrapali Group which have been attached. The tripartite agreement and do all other acts as may be necessary and also to ensure that title is passed on to home buyers and possession is handed over to them. [11]
CONCLUSION
The application seems attractive at first glance but it has no basis as the IAs were submitted by various corporate groups including Ace Group of Companies but they did not seem to be concerned about the qualification of the home buyers. The Court held that Amrapali Group of Companies and other Groups of Companies are only strangers to the findings of the Amrapali Group of Companies Court and therefore only the IAs are on trial and therefore no mercy should be shown at least in the present process.
The decision was seen as a landmark judgment In the Indian real estate sector, as it reinforced the rights of homebuyers and set a precedent for dealing with errant developers.
REFERENCES
- https://indiankanoon.org
- https://www.advocatekhoj.com
- https://thelaws.com
- https://casemine.com
- https://www.ijjlr.com
- https://main.sci.gov.in
- https://www.lawlex.org
- https://supremetoday.ai
This Article is written by Rupali Sharma, student of The Law School, University of Jammu, an Intern at Legal Vidhiya.
[8] https://www.advocatekhoj.com
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