Mumbai, June 25: In a significant ruling for homebuyers, the Bombay High Court has held that allottees are not restricted to seeking revocation of a project's registration under the Real Estate (Regulation and Development) Act, 2016 (RERA) when a developer fails to comply with an order of the Real Estate Appellate Tribunal. They can also seek direct execution of the Tribunal's order as a civil court decree.
HC Clarifies Homebuyers' Rights
Justice N.J. Jamadar, on June 24, allowed a batch of appeals filed by homebuyers of the ‘Shri Vallabh Residency’ project in Kandivali against developer Swadhinta Builders LLP.
The dispute arose after the Maharashtra Real Estate Appellate Tribunal, by an order dated June 30, 2022, directed the developer to execute agreements for sale with the allottees and complete construction of the project within 12 months after obtaining the necessary approvals.
The Tribunal had also granted liberty to the allottees to take appropriate action under Sections 7 and 35 of RERA if the developer failed to comply.
Alleging continued non-compliance, the homebuyers initiated execution proceedings before the Appellate Tribunal. They later sought to amend their execution applications to invoke Order XXI Rule 32(5) of the Code of Civil Procedure (CPC), which empowers a court to direct that an act required under a decree be carried out by the decree-holder or another person appointed by the court, at the cost of the defaulting party.
Tribunal Order Set Aside
However, the Tribunal rejected that part of the amendment application, observing that the homebuyers could instead pursue remedies under Section 7 of RERA, which deals with revocation of a project's registration.
Setting aside that order, the High Court held that the Tribunal had adopted an incorrect approach by examining the merits and consequences of the proposed amendment rather than deciding whether the amendment was legally permissible.
“The Appellate Tribunal committed an error in delving into the merits of the amendment and the consequences that would ensue,” Justice Jamadar observed.
The court emphasised that Section 57 of RERA clearly provides that every order of the Appellate Tribunal is executable as a decree of a civil court and that the Tribunal possesses all the powers of an executing court.
Referring to the proposed amendment, the court noted that it merely sought an additional mode of execution available under Order XXI Rule 32(5) of the CPC.
Execution Remedy Independent
Importantly, the High Court clarified that the remedy of executing a Tribunal order is separate from the remedies available under Sections 7 and 35 of RERA.
“The remedy of execution of the order passed by the Appellate Tribunal as a decree is independent of the remedies under Sections 7 and 35 of RERA 2016,” the court held.
Allowing the appeals, the High Court quashed the Tribunal's order, permitted the homebuyers to amend their execution applications and directed the Appellate Tribunal to decide the execution proceedings on their own merits and in accordance with law as expeditiously as possible.
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The homebuyers were represented by advocates Jay Chhabria, Tvishi Pant and Aditya Shete, instructed by Keystone Partners. Swadhinta Builders LLP was represented by advocates Rubin Vakil, Abir P. and Kartik Joshi, instructed by Wadia Ghandy & Co.
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