Status as on: 22/08/2021

Brief Facts of the case:

The present Writ Petition was filed by a Petitioner who was the Original Complainant before the Maharashtra Real Estate Regulatory Authority. The Petitioner was an “allottee” as defined under RERA Act. The Petitioner had fled Complaint under Sections 12, 14, 18 and 19 of the said Act against Respondent No. 4. The main grievance in the Complaint before RERA was that under Articles of Agreement, the Petitioner paid the entire consideration to Respondent No. 4 towards purchase of a Flat and that there was a gross delay in handing over possession of the said Premises. Therefore, the Petitioner filed the Complaint seeking return of the amount paid and interest thereon, including compensation under the aforesaid provisions of RERA. The Adjudicating Officer allowed the said Complaint and directed Respondent No. 4 to pay the amount along with interest the Petitioner. As Respondent No. 4 failed to pay the Decretal Amount, the Petitioner initiated execution proceedings against Respondent No. 4. The said execution proceedings were allowed by RERA and consequently RERA issued a Recovery Certificate against Respondent No. 4. Thereafter, RERA directed the Collector to execute the said Recovery Certificate. According to the Petitioner, despite the aforesaid direction the Collector and the Tahsildar both failed to comply with the said direction and failed in performing their statutory obligations. The Petitioner filed the present Writ Petition under Articles 226 and 227 of the Constitution of India, seeking issuance of a Writ of Mandamus against the Collector and Tahsildar to comply with the direction to perform their statutory duties to recover the amounts. The Petitioner seeks interim relief against Respondent No. 4 and its group companies, so that the amount to be paid to the Petitioner under the Recovery Certificate is protected till such time as the statutory authorities secure the recovery of the same as arrears of land revenue.

Held

The Hon’ble Bombay High Court ruled as follows:

1. The application for interim reliefs was accordingly allowed.
2. The court held that the Respondent No. 4 and its Director wilfully and deliberately breached the Courts Orders. Not only is this a case of wilful disobedience of the Orders but in the acts of this case, such wilful non-compliance and false and incomplete affidavits also tend to interfere with the administration of justice, as these disclosures are necessary to enable the court to pass effective orders in the Writ Petition.
3. The court said that we are instead inclined to take Suo moto cognizance of Respondent No. 4 and Shri Jhavar’s conduct, and direct that a Notice be issued to Respondent No. 4 and Shri Jhavar under Section 14 of the Contempt o Courts Act read with Rule 4 of the Appellate Side Rules, 1960, and call upon Respondent No. 4 and Shri Jhavar to respond as to why Shri Jhavar should not be punished under the aforesaid provisions or obstruction and interference with the administration of justice and lowering the dignity of this Court.
4. The court was prima facie satisfied, that Respondent Nos. 2 and 3 (The Collector and Tahsildar) have done nothing in discharge of their statutory duties to secure recovery of the Decretal Amounts under the Recovery Certificate.
5. In considering this submission or opposition to grant of interim reliefs against Respondent No. 4, it is to be noted that the final reliefs in the Writ Petition seek a Mandamus against Respondent Nos. 2 and 3 to exercise their statutory duties and take effective steps or the realisation of the amount due and payable to the Petitioner under the Recovery Certificate. It is not the case of any of the Respondents including Respondent No. 4 that the Writ Petition seeking such a Writ of Mandamus is not maintainable or is misconceived. The maintainability of the Writ Petition must be determined with reference to the final reliefs that are sought, and we have no doubt that such a Writ Petition would be maintainable under Article 226 of the Constitution of India.
6. In the wide and extraordinary jurisdiction under Article 226 of the Constitution of India, there would be no embargo, or restriction on the grant of interim reliefs against an errant private party in aid of the final reliefs prayed or in the Writ Petition.
7. Respondent No. 4 is restrained by an order of injunction from selling, transferring, further encumbering, or alienating, or creating any further third-party rights in respect of its unsold units.
8. The court was of the view that Prima facie recovery of monies under the Recovery Certificate, would in the facts and circumstances of the present case, also be permissible against the assets of group companies, especially in the non-payment of a clear undisputed amount is being illegally and dishonestly avoided, whilst at the same time very large sums of money are being raised and spent by the same group or carrying on large real estate development projects.
9. Further the court directed Respondent No. 4 to deposit in this Court a sum of Rs. 11,36,33,625/- being the principal sum owed to the Petitioner, within our weeks from the date of uploading of the Order. If such deposit is made, the order of injunction will stand vacated.

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Important Judgements referred

1. Cipla Limited vs. Mr. Krishna Dushyant Rana – The High Court referred to this judgement by the Hon’ble Supreme Court stating: Although, the Judgment in Cipla was in the context of consequences of non-disclosure under Order 21 Rule 41(3) of the Code of Civil Procedure, 1908, the Judgment itself also relies upon the general principles that are fundamental to the rule of law. The Judgment (which in turn refers to various other relevant decisions of the Supreme Court and other Courts) clearly supports the proposition that such brazen and continuous disregard or orders of the Court including by making false and misleading statements would also obstruct and interfere with the administration of justice.
2. Dwarka Nath vs. Income-tax Officerand Deoraj vs. State Maharashtra – In these cases the Supreme Court, while considering the scope and ambit of the powers of the High Court under Article 226 of the Constitution, held that the High Court while exercising its writ jurisdiction can issue any order or direction, which it considers necessary to be issued. The court noted that the Supreme Court has observed that in a given case, the failure to grant interim reliefs, even if they may be mandatory in nature, would defeat the ends of justice.

Conclusion

The court concluded by saying that it is of the view that recovery of monies under the Recovery Certificate, would in the facts and circumstances of the present case, also be permissible against the assets of group companies, especially if the non-payment of a clear undisputed amount is being illegally and dishonestly avoided, whilst at the same time very large sums of money are being raised and spent by the same group or carrying on large real estate development projects. To allow such persons to defeat and frustrate the recovery of monies by individual purchasers and at the same time, permit them to carry on their business as usual, would clearly undermine the rule of law and shake the confidence of the public at large.

Source- 

(Bombay High Court Judgement dated 15.07.2021 in WRIT PETITION (ST) NO. 3221 OF 2020)

Disclaimer – The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at rera@centrik.in

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