Orissa High Court
M/S Seven Hills Estate Ltd And vs M/S Seven Hills Flat Owners on 28 February, 2025
Author: R.K. Pattanaik
Bench: R.K. Pattanaik
AFR IN THE HIGH COURT OF ORISSA AT CUTTACK
MSA Nos.10 and 11 of 2024
M/s Seven Hills Estate Ltd and .... Appellants
Another
Mr. P.K. Ray, Sr. Advocate
-Versus-
M/s Seven Hills Flat Owners .... Respondents
Association and others
Mr. A. Rath, Advocate for respondent Nos.1 and 2
Mr. B.P. Tripathy, Advocate for respondent No.3
CORAM:
JUSTICE R.K. PATTANAIK
DATE OF JUDGMENT:28.02.2025
1. Both appeals are disposed of by the following common
judgment.
2. MSA No.10 of 2024: Instant appeal filed under Section 58
of Real Estate (Regulation and Development) Act, 2016 read
with Section 151 CPC, 1908 (herein after referred to as ‘the
Act’) is at the behest of appellants assailing the impugned
order dated 3rd January, 2024 as at Annexure-3 passed in
connection with OREAT Appeal No.17(T) of 2020
corresponding to Complaint Case No.03 of 2018 disposed of
on 25th May, 2019 by the Odisha Real Estate RegulatoryPage 1 of 12
Authority, Bhubaneswar (in short ‘the ORERA’) on the
grounds inter alia that the same is liable to be quashed.
3. MSA No.11 of 2024: The present appeal is filed under the
Act by the appellants questioning the correctness and legality
of the impugned decision by order dated 3rd January, 2024 at
Annexure-3 in OREAT Appeal No.02(T) of 2022 arising out
of Execution Case No.56 of 2019 disposed of on 8 th
November, 2021 by the ORERA on the grounds stated
therein.
4. Heard Mr. Ray, learned Senior Advocate for the
appellants, Mr. Rath, learned counsel for respondent Nos.1
and 2 and Mr. Tripathy, learned counsel for respondent No.3.
5. Appellant No.1 is a real estate company, whereas,
appellant No.2 is the Director of the said company. In fact,
the company floated an advertisement in the name and style
of Seven Hills and Sands at Puri for sale of flats. Following
the advertisement, the members of the flats Association
entered into agreements with the company. As per the
contract, the project was to be completed within a stipulated
period. According to appellant No.1, in terms of the
agreements, the project was completed within time but it
could not be in respect of common areas and therefore, the
Association approached the ORERA with a complaint in CC
Case No.03 of 2018. Ultimately, the said complaint upon
disposal was followed by order dated 25th May, 2019 and on
being aggrieved, the appellants filed the appeal disposed ofPage 2 of 12
on 3rd January, 2024. The pleading on record from the side of
the appellants is that the learned Appellate Tribunal did not
properly consider the facts and appreciate the law and hence,
the impugned order in OREAT Appeal No.17(T) of 2020 and
also the decision in Complaint Case No.03 of 2018 are liable
to be set aside. With such other grounds raised, the appellants
questioned the decisions of the ORERA and learned
Appellate Tribunal. In the meantime, with the order in
Complaint Case No.03 of 2018 dated 25th May, 2019, the
proceeding in Execution Case No.56 of 2019 was initiated
and it led to the passing of the order dated 8th November,
2021 which is under challenge in MSA No.11 of 2024 with
similar grounds and in view of the pendency of appeal by
then. The ORERA declined to suspend the execution and
proceeded to dispose it of instructing the appellants to
register the project immediately and to complete construction
providing the promised amenities to the members of the
Association as per the agreements executed between them
within a period of three months and to obtain occupancy
certificates from the competent authority on such completion
of project with consequential directions issued. The said
order in complaint case was challenged in OREAT Appeal
No. 02(T) of 2022. The execution proceeding and the order
passed therein, as earlier stated, was challenged in OREAT
Appeal No.17(T) of 2022. Both orders in the complaint and
execution have gone against the appellants as learned
Appellate Tribunal declined to intervene.
Page 3 of 12
6. The undisputed facts are that the ORERA held the project
to be mandatorily registerable, hence, directed the appellants
accordingly as required under the Act. It reached at a
conclusion that the materials available on record are
sufficient to hold that the appellants defaulted in handing
over the flats with all promised amenities within the
stipulated period of time and hence, the same amounted to
the violation of Section 18 under the Act. The learned
Appellate Tribunal upheld the decision of the ORERA and
dismissed the appeal. Similarly, the execution was declined
to be interfered with by learned Appellate Tribunal in
OREAT Appeal No.17(T) of 2022 with a conclusion that a
technical team inspected the project area on 22 nd October,
2021 and submitted a report which revealed that the
directions issued in Complaint Case No.03 of 2018 not to
have been complied with and even the promoter delivered
possession of the flats, which were not constructed with the
approval of the complaint authority and there was no
provision of water supply, electricity connection to the
project and the project to be still incomplete and that apart,
the promoter has not obtained the structural safety and fire
certificates besides completion and occupancy certificates.
The stay of the execution was also declined on the ground
that filing of an appeal does not suspend the proceeding
unless there is an order in terms of Order 41 Rule 5 CPC. It is
revealed from the record that the execution proceeding is
already disposed of by the ORERA, whereafter, the
Page 4 of 12
Association approached the Adjudicating Authority in AOCC
No.20 of 2021 demanding compensation from the promoter
which was disposed of by order dated 19th January, 2023
directing payment of compensation in their favour which has
also not been complied with till date and in that behalf,
Execution Case No.10 of 2023 has been initiated for
execution of such order. With the dissatisfaction noted down,
learned Appellate Tribunal dismissed the challenge to the
execution and also the complaint.
7. Mr. Ray, learned Senior Advocate for the appellants filed a
host of citations, such as, Newtech Promoters and
Developers Pvt. Ltd. Vrs. State of U.P. & others (2021) 18
SCC 1; Sanwarlal Agrawal and others Vrs. Ashok Kumar
Kothari & others (2023) 7 SCC 307; Pradeep Mehra Vrs.
Harijivan J. Jethwa (Since Deceased through LRs.) and
others MANU/SC/1189/2023; Nihalsons Real Estate
Developers Vrs. Wave Megacity Centre Pvt. Ltd.
MANU/RT/0461/2023; Kanta Malhotra Vrs. M/s Parsvnath Developers Limited and others
MANU/RT/0122/2021, however, confined the argument on
the points, namely, maintainability of the action before the
ORERA in Complaint Case No.03 of 2018 in view of an
arbitration clause between the parties and no claim
certificates received from the members of the Association.
The Apex Court in Newtech Promoters & Developers Pvt.
Ltd. (supra), discussed in detail, the object and reasons of the
Act and the role of the Regulatory Authority vis-à-vis the real
Page 5 of 12
estate sector and reproduced the same therein, which is to the
following effect:
“The real estate sector plays a catalytic role
in fulfilling the need and demand for housing and
infrastructure in the country. While this sector has
grown significantly in recent years, it has been largely
unregulated, with absence of professionalism and
standardization and lack of adequate consumer
protection. Though the Consumer Protection Act, 1986
is available as a forum to the buyers in the real estate
market, the recourse is only curative and is not
adequate to address all the concerns of buyers and
promoters in that sector. The lack of standardization,
has been a constraint to the healthy and orderly growth
of industry. Therefore, the need for regulating the
sector has been emphasized in various forums.
2. In view of the above, it becomes
necessary to have a Central legislation, namely, the
Real Estate (Regulation and Development) Bill, 2013,
in the interests of the effective consumer protection,
uniformity and standardization of business practices
and transactions in the real estate sector. The proposed
bill provides for the establishment of the Real Estate
Regulatory Authority (the Authority) for regulation and
promotion of real estate sector and to ensure sale of
plot, apartment or building, as the case may be, in an
efficient and transparent manner and to protect the
interest of consumers in real estate sector and establish
the Real Estate Appellate Tribunal to hear appeals from
the decisions, directions or orders of the Authority.”
In the above decision, it has been held that the object of
the Act is to ensure greater accountability towards
Page 6 of 12
consumers, to significantly reduce frauds and delays and also
the current high transaction costs and at the same time, to
balance the interests of consumers and promoters by
imposing certain responsibilities on both and to bring
transparency of the contractual conditions, set minimum
standards of accountability and a fast-track dispute resolution
mechanism.
8. On the contrary, Mr. Rath, learned counsel for respondent
Nos.1 and 2 justifies the impugned orders of authorities
below and highlights upon the conduct of the promoter and
how the flats have been handed over with unfinished work.
Mr. Tripathy, learned counsel for OREAT supported the
impugned decisions of learned Appellate Tribunal on the
ground that the appellants to be grossly guilty of default as
the amenities as per the agreements have not been provided
complying the directions of the ORERA and in course of
argument, produced the original records in CC No.03 of 2018
and EC No.56 of 2019 for reference of the Court.
9. As to the argument advanced from the side of the
appellants by Mr. Ray, learned Senior Advocate, the same is
based on a decision of the Delhi High Court in Praveen
Chhabra Vs. Real Estate Appellate Tribunal in W.P.(C)
No. 14552 of 2021 dated 26th May, 2022. By claiming that
the authorities below failed to take cognizance of the material
facts and law involved, Mr. Ray, learned Senior Advocate
would further submit that the suo motu proceeding under
Page 7 of 12
Section 35 of the Act is unsustainable. It is contended by Mr.
Ray, learned Senior Advocate that as per agreements between
the promoter and members of the Association, any such
dispute between them shall be referred to arbitration, the fact,
which has been lost the sight of by both the authorities below
and refers to Sections 5 and 8 of the Arbitration and
Conciliation Act, 1996. It is claimed that a preliminary
objection was raised on the maintainability of the complaint
but it was not considered and dealt with by the ORERA and
also learned Appellate Tribunal. It is alleged that the
members of the Association are responsible to suppress the
arbitration clause in the agreements and therefore, would be
guilty of playing fraud on the authorities below and in that
connection, Mr. Ray, learned Senior Advocate refers to a
decision of the Apex Court in S.P. Chengalvaraya Naidu
(Dead) by Lrs. Vrs. Jagannath (Dead) by LRs. and others
AIR 1994 SC 853. In reply and response to the above, Mr.
Rath, learned counsel for respondent Nos.1 and 2 submits
that such question was not raised before the learned courts
below. Even though, any such objection was raised, it was
not specific. Rather, the Court finds that on such other
grounds, the jurisdiction of the ORERA was questioned. The
appellants, as it appears, wholeheartedly participated in the
complaint proceeding and the same was disposed of at last.
Even learned Appellate Tribunal declined to suspend the
execution pending disposal of the appeal which was finally
disposed of on 3rd January, 2024. The absence of jurisdiction
Page 8 of 12
of the ORERA was to be challenged on such specific ground
due to existence of arbitration clause and the same having
been not resorted to, rather, a general objection was raised,
the Court is of the view that the appellants at this distant
point of time cannot be allowed to turn back and question the
maintainability of the complaint under the Act. The fraud
alleged against the members of the Association is equally
untenable since the promoter did not raise such a question at
the very inception. The Court is in agreement with the
contention advanced by Mr. Rath, learned counsel since the
appellants did not really question the jurisdiction in view of
the arbitration clause and sincerely participated in the
proceeding till the complaint was disposed of. A decision of
the Apex Court Mumtaz Yarud Dowla Wakf Vrs. Badam
Balakrishna Hotel Pvt. Ltd. and others 2023 SCC Online
SC 1378 is cited by Mr. Rath, learned counsel for respondent
Nos.1 and 2 to contend that even, otherwise, failure on the
part of the Court to do so is not a ground to intervene in view
of the legal maxim “actus curiae neminem gravabit” which
means, in case, where a Court has failed to check its
jurisdiction and a plea has been raised subsequently and
especially, after receiving an adverse verdict, the forum shall
not be declared as having lack of jurisdiction, especially
when, there is no apparent injury otherwise to the rights
conferred under a statute. In the case (supra), an earlier
decision of the Apex Court in Indore Development
Authority Vrs. Manoharlal and others (2020) 8 SCC 129
Page 9 of 12
was referred to. In the case at hand, it is without any doubt
that the appellants raised a question of maintainability but it
was not specifically concerned with the arbitration clause.
Since, the complaint is at the instance of respondent Nos.1
and 2 and a preliminary objection on maintainability was to
be questioned, it was the responsibility of the appellants
rather to raise it. At the cost of repetition, the Court forms an
opinion that at no point in time, not even before learned
Appellate Tribunal, the appellants did question the
maintainability of the complaint on any such ground of
arbitration. A general objection by the appellants on some
other unspecific grounds cannot be a basis to allege that the
issue of lack of jurisdiction by the ORERA was not
examined. The Court concludes that a point of jurisdiction
has to be seriously raised before the Court or even if, not
raised, the Court is to consider the same which cannot be
disregarded but it should be brought to the notice of the Court
concerned. In absence of any such material on record to show
and satisfy that the appellants ever objected to the complaint
on the ground of want of jurisdiction of the ORERA, the
same cannot be entertained thereafter unless it is found that
one of the parties to the arbitration has really been
prejudiced. Even if, respondent Nos.1 and 2 are held to be
irresponsible but in view of the conduct of the appellants, it
cannot be alleged that the former was guilty of fraud. Even
otherwise, when the rights of the parties have been looked
into and adjudicated upon without any prejudice, the Court is
Page 10 of 12
of the view that such a question on arbitration and lack of
jurisdiction is not to be entertained to nullify the decisions of
the authorities below rendered on merit.
10. In Praveen Chhabra (supra), the Delhi High Court held
that the suo motu proceedings by the Appellate Tribunal are
needed to be quashed as being not inconsonance with the
provisions of the Act. As to the decision in S.P.
Chengalvaraya Naidu (supra), the same, in the considered
view of the Court, is inapplicable as it is not inclined to hold
respondent Nos. 1 & 2 guilty of fraud. As such, the facts and
circumstances of the case, in the above decision, are totally
different, wherein, a preliminary decree was obtained by
playing fraud on the Court by an act of deliberate deception
and it was intended to cheat and receive an advantage. Such
is not the case vis-à-vis respondent Nos.1 and 2, who are the
allottees and members of the Association fighting a battle
against the promoter ever since 2018 and still are deprived of
the promised amenities. As far as, the argument of Mr. Ray,
learned Senior Advocate for the appellants is concerned, with
regard to no claim certificates of the flat owners, the Court is
of the further view that such cannot absolve the promoter
from complying the directions of the ORERA in providing
the amenities to which they are otherwise entitled to. The
Court is of the conclusion that merely because no claim
certificates have been obtained by the promoter, if there is an
acceptable claim pending and as in the instant case, the
amenities as agreed upon have not been provided, the same
Page 11 of 12
cannot be ground to oppose the action under the Act. On a
similar analogy, the decision of the Apex Court in R.L.
Kalathia and Company Vrs. State of Gujarat AIR 2011
SC 754 is profitable to be referred, where, it has been held
that a contractor shall still be entitled to make a claim, even
if, he is a signatory to the no claim certificate. Normally, in a
case of present kind, no claim certificates are issued by the
allottees, at times, under compulsion or for such other
reasons, which is not to debar them from demanding all of
the promised amenities, the same having not been provided
by the promoter.
11. Considering the grounds advanced and submissions of
Mr. Ray, learned Senior Advocate for the appellants, Mr.
Rath, learned counsel for respondent Nos.1 and 2 and Mr.
Tripathy, learned counsel for respondent No.3, the irresistible
conclusion of the Court is that the learned authorities below
did not commit any error or illegality and hence, the orders
under challenge deserve to be affirmed.
12. Hence, it is ordered.
13. In the result, the appeals are dismissed.
14. In the circumstances, there is no order as to the costs.
(R.K. Pattanaik)
Signature Not Verified Judge
Digitally Signed
Signed
Rojinaby: ROJINA SAHOO
Designation: Junior Stenographer
Reason: Authentication
Location: OHC, CTC
Date: 04-Mar-2025 19:35:44
Page 12 of 12
[ad_1]
Source link