GRJ Distributors And Developers Private Limited vs Union Of India And Ors

With the consent of learned counsel for the parties, the writ petitions are heard finally.

This batch of writ petitions has been filed to challenge the Notifications dated 17th February, 2017 and 15th May, 2017. issued by the Urban Development Department, Government of Rajasthan. The first Notification was issued for the constitution of designated Real Estate Regulatory Authority (for short "the Authority") and second for designated Real Estate Regulatory Authority Appellate Tribunal (for short "the Tribunal"). A further challenge has been made to the orders passed by the Authority beyond the period of one year from the date of coming into force of the Real Estate (Regulation and Development) Act, 2016 (for short "the Act of 2016").

A reference of Sections 20 to 43 of the Act of 2016 has been given to show that the Authority so as the Tribunal were required to be constituted within the period of one year from the date of coming into force of the Act of 2016. In the instant case, the respondents failed to constitute the Authority so as the Tribunal within the period of one year, rather, they have issued Notification to designate the Authority so as the Tribunal to exercise jurisdiction beyond the period of one year. It is pursuant to the third proviso of Section 20 of the Act of 2016. The Notification and continuance of jurisdiction of the Authority was in ignorance of the fact that proviso cannot overrule the main provision. When the main provision provides for constitution of the Authority so as the Tribunal within the period of one year from the date of coming into force of the Act of 2016, any notification or continuance of jurisdiction of the Authority under the Notification is illegal and, accordingly, a prayer is made to set aside the order passed by the Authority.

Elaborating the facts of the case, it is stated that the Act of 2016 came into effect on 01st May, 2016. As per Section 20 of the Act of 2016, the respondents were under an obligation to establish and incorporate the Authority within a period of one year from the date of coming into force of the Act.

Reference of Section 43 of the Act of 2016 has also been given. It is regarding constitution of the Tribunal. It was also to be within a period of one year from the date of coming into force of the Act of 2016. For the period of one year, the legislature permitted arrangements given under the third proviso of Section 20 of the Act of 2016 and first proviso to Section 43 of the Act of 2016. An interim arrangement for a period of one year was permitted, as constitution of the Authority and the Tribunal was likely to take time but the proviso could not overrule the main provision so as to allow the interim arrangement of one year in perpetuation or beyond the period given under Sections 20 and 43 of the Act of 2016.

In the instant case, the respondents issued two Notifications to designate the Authority as well as the Tribunal and while issuing the Notifications, they had not taken care that the period left out as per Sections 20 and 43 of the Act of 2016 is of few months for the Authority and no time for designating the Tribunal. It is also stated that the Authority and the Tribunal have to be constituted in the manner given under the Act of 2016. The Authority is consist of three members as per Sections 21 of the Act of 2016. The process for constitution of the Authority has been given under Section 22 of the Act of 2016. The designated Authority pursuant to the impugned Notifications was of one member and it heard and decided the matters against the petitioners beyond the period of one year. A challenge to the order was made while challenging the validity of the Notifications issued by the State of Rajasthan.

Learned counsel submits that during pendency of the writ petitions, a direction was given by this Court to constitute the Authority as well the Tribunal as per the provisions of the Act of 2016. The State Government has already initiated the process for constitution of the Authority so as the Tribunal but the process could not be completed due to assembly election during the intervening period.

Learned counsel, appearing for the State Government, submits that the process would now be completed soon. There would be duly constituted Authority so as the Tribunal. Accordingly, a prayer is made to save the Notifications challenged by the petitioners.

Learned counsel, appearing for the complainants, submit that adjudication of the complaints has already been made by the Authority, thus the prayer made in the writ petitions may not be accepted. The petitioners can challenge the order by approaching the Tribunal and it can be after due constitution as per the provisions of the Act of 2016 and till then they would have protection in the shape of stay order, thus the Notifications and the order/s may not be interfered. It would balance the equities between the parties and save further adjudication by the same Authority.

At this stage, learned counsel for the petitioners submit that apart from challenge to the Notifications and order/s in reference to the period of one year, there is another aspect of the matter. In the instant case, an order was passed by the Authority after hearing the parties but thereupon another order was passed without a notice to the petitioners, thus second order was even in violation of the principles of natural justice apart from violation of the procedure given under the Act of 2016. The aforesaid aspect has not been touched at the initial stage, as the prayer was to remand the matters to the Authority and it may be heard by it after its due constitution.

Learned counsel for the complainants submit that the matters may be remanded to the Authority with certain directions so that grievance of the complainants may be redressed at the earliest. The first direction should be to the State Government to constitute the Authority and the Tribunal within a period of two months from the date of receipt of copy of this order. It is moreso when, process for it has already been initiated.

The second direction should be for expeditious hearing and disposal of the complaints by the Authority after its constitution and it should be within the period of three months from the first date fixed by the Authority.

Since, we find that the process for constitution of the Authority as well as Tribunal has already been initiated by the State Government, though, it could not be completed due to assembly election in between but now with the declaration of result of assembly election, the process can be continued and be completed within the period of two months from the date of receipt of copy of this order.

Accordingly, the Authority would be constituted as per the Act of 2016 within two months from the date of receipt of the copy of this order and, for that, Sections 21 and 22 of the Act of 2016 would be taken note of.

The reference of Section 71 of the Act of 2016 would be relevant at this stage because after constitution of the Authority, they have to designate the Adjudicating Officer and accordingly, we further direct that immediately after constitution of the Authority, the process would be taken up by them for designating Adjudicating Officer as per Sections 71 and 72 of the Act of 2016. The aforesaid aspect has been taken by this Court looking to the fact that as per the procedure given under the Act of 2016, whenever the matter is brought before the Authority, it may be sent to the Adjudicating Officer for determination of the compensation, if any and not otherwise.

The respondents would further constitute the designated Real Estate Regulatory Authority Appellate Tribunal within the period of three months from the date of receipt of copy of this order. The process for it has already been taken up, thus would be completed within the period given above.

We have given directions for constitution of the Authority and the Tribunal. The challenge to the Notifications is yet to be seen. We find that beyond the period of one year from the date of coming into force of the Act of 2016, such Notifications cannot have effect. The proviso to Sections 20 and 43 of the Act of 2016 cannot be read de hors the main provision. Accordingly, the directions in reference to the Notifications under challenge need to be given. The Notifications under challenge would not operate beyond a period of one year from the date of coming into force of the Act of 2016. As the impugned orders have been passed by the Authority beyond the period of one year, the same are set aside with remand of the matter to the Authority, as agreed by learned counsel for the parties. The Authority would hear and decide the matter on remand within the period of three months after its constitution and the first date fixed by them. Both the parties are directed to co-operate with the Authority to complete the proceedings within the period given above.

With the aforesaid, all the writ petitions are disposed of. A copy of this order be placed in each connected file.