In W.P.(C)14552/2021-DEL HC- Real Estate Appellate Tribunal not conferred with power to initiate suo moto proceedings: Delhi HC Justice Yashwant Varma [26-05-2022]

Read Order: PRAVEEN CHHABRA Vs. REAL ESTATE APPELLATE TRIBUNAL 

Mansimran Kaur

New Delhi, May 27, 2022:  Referring to various provisions of the Real Estate Regulation and Development Act, 2016, the Delhi  High Court has held that the Real Estate Appellate Tribunal was not having the jurisdiction to initiate suo moto proceedings against the project of the petitioner and it could neither assume nor arrogate to itself a power or authority which might otherwise did not stand conferred on it by the Act.

While pursuing a petition filed against the impugned orders of the Tribunal whereby the Real Estate Appellate Tribunal restrained the construction of all sorts of projects as they were found to be not registered with the Real Estate Authority, the Bench of Justice Yashwant Varma opined that Section 3 of the Real Estate Regulation and Development Act, 2016 clearly stipulates that the requirement of registration is one which necessarily merits an enquiry and examination of the facts of each real estate project before the Authority or the Appellate Tribunal may come to conclude that registration is mandated.

The petitioner in the present case was a builder-developer who instituted the proceedings seeking issuance of a  direction to respondent to place on record all the necessary records pertaining to case titled as “Court of Its Own Motion Vs. Commissioners of all the Municipal Zones & Anrs.” It was further prayed to set aside the orders and proceedings with respect to the aforesaid case and to set aside the orders dated November 24, 2021 and November 17, 2021 passed by the Real Estate Appellate Tribunal, New Delhi. 

The Real Estate Appellate Tribunal initiated suo moto proceedings against  various residential and commercial projects and construction activity being undertaken in connection therewith in the National Capital Territory of Delhi and passed orders of restraint on the ground that the said projects in question were not registered Real Estate Regulatory Authority.  The petitioner approached this Court on being aggrieved by the fact that he was apprised by the appropriate development authorities that the plans submitted couldnot be accorded approval keeping in view the orders passed by the Appellate Tribunal. 

The question of law that was posed before this Court by way of writ petition was whether the Appellate Tribunal had the jurisdiction to initiate suo moto proceedings. The Court opined that the Authority is obliged to regulate real estate projects, to ensure compliance of obligations placed on promotees, allottees and real estate agents. The powers exercised by the Authority under Section 35 can be set in motion either on a complaint or by the Authority itself acting suo moto, added the Bench.

However, the Bench also noted, “On a consideration of the aforesaid provisions as made and incorporated in the Act, it is manifest that the Appellate Authority cannot possibly be recognized as conferred with the power to initiate proceedings suo moto or on its own motion.” Thus, the Court was of the considerate view that there was patent lack of jurisdiction in the instant case and the proceedings as drawn by the Appellate Jurisdiction ,needed to be quashed and set aside. 

With respect to the impugned orders, the Court submitted that order passed on November 17, 2021 was not passed while the Appellate Tribunal was in seisin of any order or direction made by the Authority or the Adjudicating Officer. Further with respect to the order dated November 24, 2021, the Court observed that the Appellate Tribunal framed omnibus direction restraining all construction activities be it residential or commercial, in the NCT Delhi.  However, noting that the Act came into force in March, 2016, the Court opined that Section 3 would apply to projects which may commence thereafter. Thus, keeping in view the mandate of Section 3 (1) and as far as the ongoing projects were concerned that would stand governed by its first proviso, the Court added.

Thus, the Court concluded that the direction passed by the Appellate Tribunal was based on false premises that all projects were liable to be compulsorily registered under the Act. It was also observed that the Tribunal passed the impugned orders without conducting any enquiry with respect to the validity of the aforesaid project. Accordingly, the present writ petition was allowed and the impugned judgments were set aside and quashed.