Case Summary

BIKRAM CHATTERJI VS. UNION OF INDIA

Case Name: Bikram Chatterji & Ors. Vs. Union of India & Ors.

Appeal No.: Writ Petition(s) (Civil) No(s).940/2017

Date of Judgment: 21-Aug-18

Court: Supreme Court of India

The case study is a landmark decision of the Hon’ble Supreme Court regarding the real estate industry in India and presumably the most anticipated in the light of the various challenges faced by home-buyers throughout India.

FACTS:

In 2011, Projects of Amrapali group launched the construction of 42000 flats in Noida and Greater Noida and promised that delivery of possession will be made after 36 months. Buyers in 2010 – 2014 signed the buyer’s agreement. Even after payment of 40% consideration, they faced the threat of forfeiture. The agreement contained some terms as to the interest of owners, Clause 14 authorized himself to finance himself from any loans by way of mortgage/charge/security and allottees cannot raise an objection. Clause 15 authorized the builder to keep full authority over flat depriving allottees any lien or interest despite full payment. Clause 19(a) the builder was obliged to complete flats of Centurion Park within 30 months from date of commencement of signing an agreement which may vary more or less than 6 months. Clause 19(c) builder fixed sum of Rs. 5 per square feet per month for a period of delay. Breach of obligation by respondents to deliver flats even within 36 months. They did not pay the amount to the allottees and also the bank. And buyers had to pay the EMI’s to bank thereby causing double loss. 

Some consumers approached NCDRC by filing a consumer complaint. Bank of Baroda filed a company petition in 2017 before the NCLT under Section 7 of Insolvency and Bankruptcy Code, 2016. The NCLT appointed Interim Resolution Professional. The moratorium was also declared thereby under the SARFAESI Act, 2002. The order adversely affected the interest of thousands of homebuyers of various projects being developed by Amrapali.

Meanwhile, a writ petition was also filed in Supreme Court. The apex court after hearing the complaints and in light of the accusations of draining off of funds being made against the Amrapali Group decided to take cognizance of the petition and ordered to conduct a forensic audit over all the agencies of Amrapali Group.

ISSUES:

  • The charges levied by officials, banks, home purchasers and development agencies shall be valid.
  • The Amrapali Group’s RERA registration may be cancelled.
  • Form of relief accessible to homebuyers.

HELD:

Supreme Court held that:

RERA Amrapali Group registration under RERA Act shall be revoked and NBCC (India) Ltd is finalizing various projects.

The separate lease agreements issued for projects under consideration in favour of Amrapali Group Authorities are revoked and all the rights will now be vested in the Court Receiver who has authority to alienate, lease out or take any decision to raise funds. The Court Receiver will pay money raised to NBCC will complete the project with 8% profit margin (senior Adv., Shri R. Venkataramani).

The Authorities and Banks do not have the right to sell the property of the property buyers or the land leased for payment of their dues. They have to receive all their charges from the selling of other assets attached to the Amrapali Group.

The right of the lessee shall be enshrined in the Court Receiver (formerly with the Amrapali Group) and shall, by means of an authorized person on his behalf, conclude a tripartite agreement and perform all other acts as may be necessary and shall also make sure that the title is handed over to the home-buyers and that the possession is handed over to them.

Submitted By: Harshita Gupta

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