# M/S Paramount Prop. Build Pvt. Ltd v. State of U.P. & Ors

- **Citation:** (2021) 2 ILRA 257
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-11-04
- **Case number:** Writ C No. 12573 of 2020
- **Bench:** Surya Prakash Kesarwani, Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-paramount-prop-build-pvt-ltd-v-state-of-u-p-ors-46147
- **Pages:** 4

## Headnote

Act, 2016 - S. 18(1), 38 - Powers of
Authority to impose Interest - Petitionerpromoter could not deliver possession of
flats to the allottees in time - allottees
filed
complaints
before
Real
Estate
Regulatory
Authority,
who
passed
impugned orders awarding interest - Held
-
allottees
having
not
intended
to
withdraw from the project, the proviso to
Section 18(1) casts an obligation on the
258 INDIAN LAW REPORTS ALLAHABAD SERIES
promoter to pay to the allottees interest
for every month of delay, till the handing
over
of
the
possession
-
Authority
exercising powers u/s 38(1) is fully
empowered to impose interest in regard
to contravention of the obligation cast
upon the promoter. (Para 9, 10)

Writ Petition dismissed. (E-4)

## Text

2 All. M/S Paramount Prop. Build Pvt. Ltd. Vs. State of U.P. & Ors.
257
were a religious minority, to invoke the
protection of Articles 29(1) and 30(1). We
had in those writ petitions held that what
constitutes a linguistic or religious minority
must be judged in relation to the State
inasmuch as the impugned Act is a State
Act and not in relation to the whole of
India. In this view we rejected the several
contentions which are also urged in these
petitions, namely, that Hindus being a
majority in India are not a religious
minority in Punjab and held that the Arya
Samajis who are part of the Hindu
community in Punjab are a religious
minority and that they had a distinct script
of their own the Devnagri which entitled
them to invoke the guarantees under the
aforesaid provisions of the Constitution."

53. Similarly the Constitutional Bench
of the Hon'ble Supreme Court in Roop
Chand vs State Of Punjab, reported at AIR
1963 SC 1503 opined:

"22....It may be that just now the
right has not been affected and there is only a
threat that it will be affected. But we think
that the threat is sufficiently serious and the
petitioner is not bound to wait till his right
has actually been affected more particularly
as it is not disputed that it would inevitably be
affected."

IV. Directions:-

54. The respondents are granted four
weeks time to file their respective counter
affidavits'. While filing the counter affidavit,
the respondent no. 4-SHCIL shall also state
its organizational details and structure,
constitution of its Board, the extent of control
of the Government both administrative and
financial, and any other like information.

55. The SHCIL and the State
Government are directed to make the
necessary disclosures regarding the actual
commission being given to the Stock
Holding Corporation of India Limited by
the State Government, and reveal the same
to the petitioner within two weeks from the
date of receipt of a certified copy of this
order.

56. List in the top ten cases in the
additional cause list immediately after four
weeks before the appropriate Bench.
----------
(2021)02ILR A257
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.11.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ C No. 12573 of 2020

M/S Paramount Prop. Build Pvt. Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Syed Imran Ibrahim, Sri Gaurav Tripathi

Counsel for the Respondents:
C.S.C., Sri Ajeet Kumar Singh, Archana
Singh, Sri Wasim Masood

Real Estate (Regulation and Development)
Act, 2016 - S. 18(1), 38 - Powers of
Authority to impose Interest - Petitionerpromoter could not deliver possession of
flats to the allottees in time - allottees
filed
complaints
before
Real
Estate
Regulatory
Authority,
who
passed
impugned orders awarding interest - Held
-
allottees
having
not
intended
to
withdraw from the project, the proviso to
Section 18(1) casts an obligation on the
258 INDIAN LAW REPORTS ALLAHABAD SERIES
promoter to pay to the allottees interest
for every month of delay, till the handing
over
of
the
possession
-
Authority
exercising powers u/s 38(1) is fully
empowered to impose interest in regard
to contravention of the obligation cast
upon the promoter. (Para 9, 10)

Writ Petition dismissed. (E-4)

(Delivered by Hon'ble Surya Prakash Kesarwani, J.
&
Hon'ble Dr. Yogendra Kumar Srivastava, J.)

1. Heard learned counsel for the
petitioner, learned standing counsel for the
State-respondents and Sri Wasim Masood,
learned counsel for the respondent No.2.

2. The petitioner is a promoter. The
respondent Nos.3 to 119 are allottees. The
petitioner could not deliver possession of the
flats to the allottees in time and there
occurred delay. The allottees filed separate
complaints before the Uttar Pradesh Real
Estate Regulatory Authority, Gautam Buddh
Nagar (hereinafter referred to as 'the
Authority'), who passed the impugned orders
awarding interest.

3. Learned counsel for the petitioner
submits that the impugned orders are without
jurisdiction inasmuch as the power to grant
interest, does not vest with the authority.

4. Learned counsel appearing for the
respondent
No.2 has
controverted
the
aforesaid contention by submitting that the
authority is vested with the power to grant
interest and the orders impugned, do not
suffer from any error of jurisdiction on this
count.

5. We have carefully considered the
submissions of learned counsel for the
parties.

6. Section 18 and Section 38 of the
Real Estate (Regulation and Development)
Act, 2016 (hereinafter referred to as 'the
Act 2016') are relevant for the purposes of
deciding the controversy involved in the
present writ petition, which are reproduced
below:

"Section 18. Return of amount
and compensation. -(1) If the promoter
fails to complete or is unable to give
possession of an apartment, plot or
building,--

(a) in accordance with the terms
of the agreement for sale or, as the case
may be, duly completed by the date
specified therein; or

(b) due to discontinuance of his
business as a developer on account of
suspension
or
revocation
of
the
registration under this Act or for any
other reason,

he shall be liable on demand to
the allottees, in case the allottee wishes to
withdraw
from
the
project,
without
prejudice to any other remedy available, to
return the amount received by him in
respect of that apartment, plot, building,
as the case may be, with interest at such
rate as may be prescribed in this behalf
including compensation in the manner as
provided under this Act:

Provided that where an allottee
does not intend to withdraw from the
project, he shall be paid, by the promoter,
interest for every month of delay, till the
handing over of the possession, at such
rate as may be prescribed.

(2)
The
promoter
shall
compensate the allottees in case of any loss
caused to him due to defective title of the
land, on which the project is being
developed or has been developed, in the
manner as provided under this Act, and the
claim
for
compensation
under
this
2 All. M/S Paramount Prop. Build Pvt. Ltd. Vs. State of U.P. & Ors.
259
subsection shall not be barred by limitation
provided under any law for the time being
in force.

(3) If the promoter fails to
discharge any other obligations imposed on
him under this Act or the rules or
regulations
made
thereunder
or
in
accordance with the terms and conditions
of the agreement for sale, he shall be liable
to pay such compensation to the allottees,
in the manner as provided under this Act.

Section 38. Powers of Authority.
(1) The Authority shall have powers to
impose penalty or interest, in regard to
any contravention of obligations cast upon
the promoters, the allottees and the real
estate agents, under this Act or the rules
and the regulations made thereunder.

(2) The Authority shall be guided
by the principles of natural justice and,
subject to the other provisions of this Act
and the rules made thereunder, the
Authority shall have powers to regulate its
own procedure.

(3) Where an issue is raised
relating to agreement, action, omission,
practice or procedure that-

(a)
has
an
appreciable
prevention, restriction or distortion of
competition
in
connection
with
the
development of a real estate project; or

(b) has effect of market power of
monopoly situation being abused for
affecting interest of allottees adversely,

then the Authority, may, suo
motu, make reference in respect of such
issue to the Competition Commission of
India."

7. Section 18 of the Act, 2016 is in
respect of return of amount and compensation
in case the promoter fails to complete or is
unable to give possession of an apartment,
plot or building. Sub-section (1) of Section 18
provides for two different contingencies. In
case the allottee wishes to withdraw from the
project, the promoter shall be liable on
demand to return the amount received by him
to the allottees in respect of the apartment,
plot or building as the case may be with
interest at such rate as may be prescribed
including compensation in the manner as
provided under the Act. Alternatively, where
the allottee does not intend to withdraw from
the project, the promoter shall, as per the
proviso to Section 18(1), be liable to pay
interest for every month of delay, till the
handing over of the possession, at such rate
as the case may be prescribed.

8. Section 38(1) of the Act, 2016
confers powers upon the Authority to impose
penalty or interest, in regard to any
contravention of obligations cast upon the
promoters, the allottees and the real estate
agents, under the Act or the Rules or the
Regulations made thereunder.

9. The case at hand being one where the
promoter has failed to give possession of the
apartments, duly completed by the specified
date, and the allottees having not intended to
withdraw from the project, the proviso to
Section 18(1) casts an obligation on the
promoter to pay to the allottees interest for
every month of delay, till the handing over of
the possession, at the prescribed rate.

10. The promoter having contravened
the afroesaid obligation with regard to giving
possession of the apartment by the specified
date, and complaints in this regard having
been filed by the allottees, the Authority
exercising powers under Section 38(1) is
fully empowered to impose interest in this
regard to contravention of the obligation cast
upon the promoter.

11. We may take notice of the fact
that the Act, 2016 was enacted for
260 INDIAN LAW REPORTS ALLAHABAD SERIES
establishment of the real estate regulatory
authority for regulation and promotion of
the real estate sector and to ensure sale of
plot, apartment or building, as the case may
be, or sale of real estate project in an
efficient and transparent manner and to
protect the interest of consumers in real
estate sector; accordingly, the provisions of
the Act have to be read in the manner so as
to sub-serve the aforesaid objects.

12. Having regard to the aforesaid
facts and circumstances of the case, we are
of the considered view, that in case of
contravention of any obligation cast upon
the
promoters,
the
Authority
while
exercising jurisdiction under Section 38(1),
is fully empowered to award interest. The
impugned orders passed by the Authority,
therefore, cannot be said to be without
jurisdiction.

13. No other point has been argued
before us by the learned counsel for the
petitioner.

14. For all the reasons afore-stated,
we do not find any merit in this writ
petition.

15. Consequently, the writ petition
fails and is hereby dismissed.
----------
(2021)02ILR A260
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.11.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ C No. 12574 of 2020
M/s Paramount Prop Build Pvt. Ltd.
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Syed Imran Ibrahim, Sri Gaurav Tripathi

Counsel for the Respondents:
C.S.C., Sri Ajeet Kumar Singh, Archana
Singh, Sri Wasim Masood

Real Estate (Regulation and Development)
Act (16 of 2016) , S.3, Prior registration of
real estate project with RERA - U.P. Real
Estate
(Regulation
and
Development)
Rules (2016) , R.2(h) - "ongoing project"
means a project where development is
going on but excludes such projects
 where all development works have been
completed and application has been filed
with the competent authority for issue of
completion certificate - Held - mere filing
of an application with the competent
authority
for
issuance
of
completion
certificate would not bring project out
from the purview of an 'ongoing project',
in case development works of a project
have not been completed. (Para 18)

Promoter took objection to jurisdiction of RERA
on the ground that project is not 'ongoing
project' - as petitioner had already filed an
application before authority for issuance of
completion certificate - Held - RERA recorded
finding that the development works in respect of
the project were not completed & NOC relating
to some technical work had not been obtained -
project rightly held to be an 'ongoing project' -
Order passed by Real Estate Regulatory
Authority
directing
promoter
to
handover
possession of the apartments to the allottees &
to pay interest on delayed completion of project,
cannot be held to be without jurisdiction. (Para
19, 20)

Writ Petition dismissed. (E-4)

(Delivered by Hon'ble Surya Praksh Kesarwani, J.
&
Hon'ble Dr. Yogendra Kumar Srivastava, J.)