# Psa Impex Private Ltd v. Real State Appellate Tribunal Lko. & Ors

- **Citation:** (2021) 3 ILRA 1096
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-03-09
- **Case number:** Second Appeal No. 121 of 2020
- **Bench:** Mrs. Sangeeta Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/psa-impex-private-ltd-v-real-state-appellate-tribunal-lko-ors-46878
- **Pages:** 25

## Headnote

Act,2016---section
7-Procedure
applicable to the Authority while taking
decission
u/s
7
does
not
requires
authority to act judicially-if promoter/real
Estate Agent adopting corrupt practiceAuthority is empowered to revoke the
registration-administrative power-rightly
exercised-Authority is only required to
issue notice to further inform its mindAppeal dismissed. (E-7)

List of Cases cited:

## Text

_Characters 0–39,840 of 85,860. This is a partial read: ask again with offset=39840 for what follows._

1096 INDIAN LAW REPORTS ALLAHABAD SERIES
(2021)03ILR A1096
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 09.03.2021

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA, J.

Second Appeal No. 121 of 2020

Psa Impex Private Ltd. ...Appellant
Versus
Real State Appellate Tribunal Lko. & Ors.
 ...Respondents

Counsel for the Petitioner:
Prashant Kumar

Counsel for the Respondent:
Shobhit Mohan Shukla

RERA
Act,2016---section
7-Procedure
applicable to the Authority while taking
decission
u/s
7
does
not
requires
authority to act judicially-if promoter/real
Estate Agent adopting corrupt practiceAuthority is empowered to revoke the
registration-administrative power-rightly
exercised-Authority is only required to
issue notice to further inform its mindAppeal dismissed. (E-7)

List of Cases cited:

1. Sahni Silk Mills Pvt. Ltd. Vs Employees' State
Insurance Corporation; 1994 (5) SCC 346.

2. St. of W.B.l Vs Subhash Kumar Chaterjee;
(2010) 11 SCC 694.

3. Automotive Tyre Manufacturers Association
Vs Designated Authority & ors.; (2011) 2 SCC
258.

4. K. Arockiyaraj Vs Chief Judicial Magistrate &
anr., 2013 SCC Online Madras.

5. Rajendra Pratap & ors. Vs Sadasiva Rao
KTSSK Ltd.; (2012) 4 SCC 781.

6. Jagannath Temple Managing Committee Vs
Siddha Matha.

7. U.P. Avas Evam Vikas Parishad & anr. Vs
Friends Cooperative Housing Society Ltd. & anr.,
(1995) Supplement 3 SCC 456

8.Sahni Silk Mills Pvt. Ltd. & anr. Vs Employees'
State Insurance Corporation 1994 (5) SCC 346

9. Harishankar Bagla Vs. St. of M.P. 31 AIR 1954
SC 465

10.Barium Chemicals Ltd. & anr. Vs Company
Law Board & ors. AIR 1967 Supreme Court 295.

11. Automotive Tyre Manufacturers Association Vs
Designated Authority & ors., 2011 (2) SCC 258

12. St. of W.B.l Vs Subash Kumar Chatterjee &
ors., 2010 (11) SCC 694

13. K. Arockiyaraj Vs Chief Judicial Magistrate &
anr., 2013 SCC online Madras 2576

14. Rajendra Prataprao & ors. Vs. Sadashivrao
Mandalik K.T.S.S.K. Ltd. & ors. 2012 (4) SCC
page 781

15.Jagannath Temple Managing Committee Vs
Siddha Math & ors. reported in 2015 (16) SCC
542

16. Paramjit Singh Patheja v I.C.D.S Ltd. JT
2006 volume 10 Supreme Court 41

17. Sri Sitaram Sugar Company Ltd. & anr. Vs
U.O.I. & ors., 1990 (3) SCC 223

18. Associated Provincial Picture Houses Ltd. Vs
Wednesbury Corporation 1948 (1) Kings Bench
223

19. St. of H.P. Vs Raja Mahendra Pal, 1999 (4)
SCC 43

20.Province of Bombay Vs Kusaldas S. Advani &
ors., AIR 1950 Supreme Court 222

21. Radeshyam Khare & anr. Vs St. of M.P. &
ors., AIR 1959 Supreme Court 107
3 All. Psa Impex Private Ltd. Vs. Real State Appellate Tribunal Lko. & Ors.
1097
22.R Vs Manchester Legal Aid Committee, 1952
(1) All England Reporter 480

23. Gullapalli Nageswara Rao Vs A.P. State Road
Transport Corporation, 1959 (Supplement 1)
SCR 319

24. Franklin Versus Minister of Town & Country
Planning (1947) 2 All ER 289 (HL)

25.Provincial
Picture
Houses
Ltd.
Vs
Wednesbury Corporation 1948 (1) Kings Bench
223

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

1. Heard the learned Senior Counsel Sri
Sudeep Seth assisted by Sri Prashant Kumar,
Advocate for the Appellant and Shri Shobhit
Mohan Shukla, learned Standing Counsel for
Real Estate Regulatory Authority (hereinafter
referred to as a "the Authority").

2. The brief facts of the case as are
relevant for deciding this appeal are being
given here in below:-

3. On 18.3.2019, by Letter No.905, the
Authority at Gautam Budh Nagar issued a
show cause notice to the Appellant under
Section 7 of the Act of 2016. The show cause
notice has been annexed as Annexure-7 to the
Application for Interim Relief. The Promoter
had got the Project registered as Sampada
Livia under Sections 3 and 4 of the Act, with
registration
No.UPRERAPRJ5855.
The
commencement date for the Project was
mentioned as 01.12.2014 and date of
completion was mentioned as 30.11.2019,
and 24 allottees had approached the
Authority by filing complaints against the
violations of the Builder Buyers Agreement
(hereinafter referred to as ''BBA') by the
Promoter. During the course of enquiry into
the complaints made by the allottees under
Section 38 of the Act, it was found that even
the necessary conditions for registration of
the Project as mentioned in Rule 14 had not
been met and required details were not
uploaded on the R.E.R.A. Website. There
were no regular progress reports uploaded
either. It was, therefore, decided to get an on
the spot inspection done of the Project site.

4. A team was constituted of the Chief
Engineer as the Technical Adviser, along
with another Junior Engineer and it was
found by the said team that although the
Project was registered as "Sampada Livia"
and the Promoter's name was given as PSA
Impex Private Limited, the board on the
site
showed
the
name
as
"Alturio
Residency". The approved plan had not
been uploaded on the R.E.R.A. website.
The
Project
completion
date
was
30.11.2019, however, on 24.2.2019, when
the Team inspected the Project and tried to
call the Project Coordinator on his mobile
number, the same was found to be switched
off and the on site inspection showed that
the work had been stopped as no
construction material was available on the
site and only 10% of the structural work on
the Project was completed. There were two
floors built in Tower A, seven floors built
in Tower B, six floors built in Tower C,
and only basement was built in Tower D.
There were other Towers to be built which
had not even been started. It had become
evident from the spot inspection report
dated 26.2.2019 submitted along with
photographs, that there was no likelihood
of the Project being completed within time
and the flats being handed over to the
allottees. The security guard on the site
revealed that work had stopped on the
Project for the past two years.

5. The Authority surmised that in all
likelihood, the hard earned money of the
allottees had been diverted unauthorisedly
1098 INDIAN LAW REPORTS ALLAHABAD SERIES
by the Promoter. On the request of the
Authority, an audit of the Project was got
conducted by the Chief Executive Officer
of Greater Noida through M/s. Currie and
Brown Auditors, who submitted a report
that about Rs.47 Crores of allottees'' money
had
been
diverted.
Because
of
the
complaints made by the allottees and on the
spot inspection report as well as the
Auditors report and because of the
incomplete details of the Project being
uploaded on the website, the Authority had
come to a, prima facie, satisfaction that the
Promoter had violated the conditions of
registration
and
the
conditions
for
revocation of registration under Section
7(1)a, 7b, 7c and 7d existed for the
Authority to issue a show cause notice
under Section 7(2) of the Act to the
Promoter to show cause why its registration
may not be revoked. The reply to the notice
had to be submitted within 30 days of
issuance of such notice.

6. A reply to the said show cause
notice was submitted on 5.4.2019, and
supplementary replies were submitted on
30.4.2019, 6.5.2019, 13.5.2019. Another
notice was issued to the Promoter on
17.05.2019 asking for its explanation on
seven
points
as
mentioned
therein,
including a correct up-to-date list of home
buyers with their addresses who had given
their consent to the Resolution plan of the
new builder. The construction plan of the
Project and the sanction given by the
Competent Authority and the arrangement
of financial resources and cash flow for
completion of the Project was also
demanded
to
be
given
along
with
documentary evidence that all the shares of
the Company PSA Impex Pvt. Ltd. had
been transferred to the new builder M/s
Rudra Build Well Constructions Ltd. The
Promoter submitted its reply to the letter
dated 17.05.2019 on 20.05.2019, saying
that the owner of M/s Rudra Build Well Sri
Raj Kumar had been taken on board as
Director of M/s PSA Impex Pvt. Ltd. and
99.75% shares had been transferred to him.

7. The Authority deliberated upon the
replies submitted by the Promoter in the
light of the provisions of the Act and the
Rules, as also the circular of U.P. Real
Estate Regulatory Authority published on
15.05.2018. An order dated 11.07.2019 was
issued asking the Promoter to contact either
personally or through e-mail, the Secretary
of UP Real Estate Regulatory Authority
with his personal affidavit along with the
consent letters of at least two thirds of the
allottees to the proposed transfer of the
Project to the new builder. The Authority
would then arrange publication of the
information in various newspapers and fix
a date, time and place for public hearing of
all home buyers as well as other affected
parties. The further proceedings under
Section 7 of the Act as proposed in the
show-cause notice dated 08.03.2019 would
be kept in abeyance to enable the Promoter
to comply with the requirements of the
Circular dated 15.05.2018.

8. The Promoter did not comply with
the order dated 11.07.2019. A reminder
was sent but still the Promoter did not
make any effort to comply with the
directions given in the order dated
11.07.2019.

9. Taking into account the conduct of
the Promoter, a meeting was held on
26.09.2019
by
the
Authority
and
conclusions drawn on the basis of the
conduct of the Promoter, the complaints
made by the home buyers, the report dated
26.02.2019 of the on-spot inspection
including photographs of the Project site,
3 All. Psa Impex Private Ltd. Vs. Real State Appellate Tribunal Lko. & Ors.
1099
and the Auditor's report, and appropriate
orders were passed, observing that the
Promoter had not complied with the
provisions of Section 4 and 11 and Rule 14
of the Act and the Rules and had not
provided the necessary documents nor
uploaded quarterly progress report in time.
The Promoter had also not respected the
BBA where the date of commencement of
the Project was shown 01.12.2014 and
completion date was given as 30.11.2019.
There were only two months left for
completion of the Project but the Promoter
had completed only 10% of the structural
work on the Project. The work had also
been stopped some two years ago. The
Promoter was in jail and there was no
genuine attempt to complete the Project
within time. Since different dates were
being given in each of the replies for
completion of the Project, there was no
hope that the Promoter would keep the
promise and there was a genuine doubt
which had matured into a decision
regarding his intentions.

10. It was therefore directed that the
registration of the Promoter be revoked
under Section 7 of the Act and various
consequences would follow as a result of
this revocation. The Authority decided to
proceed as per Section 8 of the Act to
ensure the completion of the Project. The
decision of the Authority was conveyed by
the Secretary through the Office Order
dated 30.9.2019. Aggrieved by the order
dated 30.09.2019, the Promoter approached
the Appellate Tribunal in Appeal which has
been rejected by the order impugned.

11. In this Appeal against the order of
the learned Appellate Tribunal the Learned
Senior Counsel appearing on behalf of the
Appellant has raised mainly two questions
of law to be decided by this Court. It is the
case of the Appellant who is the Promoter
of the Real Estate Project named as
Sampada Livia (hereinafter referred to as
"the Project") that (a) the Authority had not
given
oral/personal
hearing
to
the
Appellant while deciding the case of
deregistration/revocation of registration of
the Appellant. Even if the language of
Section 7 of the Act only provided for
issuance of a show cause notice and
consideration of reply given to it by the
Promoter,
the
act
of
revocation
of
registration had civil consequences and
therefore the right of personal/oral hearing
should
be
read
into
the
procedure
prescribed by the Act. (b) it has been
argued that the Authority acted in a quasijudicial capacity while ordering revocation
of registration under section 7 of the Act
and therefore it could not have subdelegated its power to decide the issue in
the case of the Appellant, the Authority had
only approved the draft of the order passed
by the Secretary, R.E.R.A. The Secretary,
R.E.R.A. is only an officer appointed by
the
State
Government
to
assist
the
Authority in the exercise of its duties and
responsibilities
under
the
Act.
The
Secretary, R.E.R.A. had passed the order
dated 30.09.2019 revoking the registration
of the Appellant which order was passed
without jurisdiction as the jurisdiction lies
only with the Authority.

12. It has also been argued that the
Authority has been wrongly held to be
exercising its power Suo Moto by the
Tribunal as the Authority in its order
impugned dated 30.09.2019 itself says that
it has taken action the basis of complaints
made by the allottees. There were two
parties to the lis and therefore the R.E.R.A.
had a duty to decide quasi-judicially. Quasi
judicial power is conferred by the Act on
R.E.R.A. and not on its Secretary. The
1100 INDIAN LAW REPORTS ALLAHABAD SERIES
R.E.R.A. could not have delegated the
power under Section 7 to the Secretary.

13. It has been argued that as many as
six replies were submitted to the Authority
and that none of these replies were
considered by the the Authority while
passing the order revoking the registration
of the Appellant.

14. It has been argued that in the reply
dated 05.04.2019, it was mentioned that the
Promoter was in jail for the past six to
seven months and was trying to contact an
experienced builder to take over the
Project.
M/s
Rudra
Build
Well
Construction Pvt. Ltd. had proposed to take
over the Project and complete the same
latest by March, 2020. The detailed
Resolution plan would be made available
by 30.04.2019.

15. In the reply dated 30.04.2019, the
Promoter stated that the new builder had
taken over the Project and had started work
like cleaning up the site and also
undertaking strengthening of structural
columns which had weakened due to the
work having been stalled for a long time.
Nearly, 200 home buyers were presented
with a Resolution plan, some of them had
taken the option of refund, some had taken
the option of shifting to already constructed
flats in Rudra Build Well's other the
Project, while others had given their
consent to continue with the Project and
wait for its completion. In the reply dated
30.04.2019, time was again requested to be
given and it was assured that actual
progress on the site would be evident from
21.07.2019.

16. In the reply dated 06.05.2019, it
was informed that all the shares/assets and
liabilities of the Promoter had been
transferred to the new builder that is M/s
Rudra Build Well Constructions Pvt. Ltd.
and the new Promoter had contacted the
architect to update the plan of the Project as
per the Green Building Norms and to get it
registered under "GRIHA" or "IGBC". A
revised construction schedule for each of
the towers has been given by the new
Promoter.

17. In the reply dated 13.05.2019, it
was informed to Real Estate Regulatory
Authority that at least Rs.10 crores had
been disbursed as refund through cheques
to various home buyers and arrangements
were being made for cash inflow to
complete the Project. The builder had
proposed to complete two towers by
March, 2020 and another two towers by
October, 2020. There was no reference to
remaining five being completed any time
soon.

18. It was argued that despite
submission of replies categorically stating
that the Appellant had sorted out the
problem and transferred all shares to a new
Promoter and possession of flats to the
allottees would be given in a phased
manner commencing from October, 2020,
the Appellant has been de-registered. The
Secretary, R.E.R.A. by a letter dated
11.7.2019 demanded consent of 2/3rd of
the allottees from the Appellant for
transferring its share to a third-party and
other relevant documents. It has been
further argued that the Appellant was not
communicated this letter dated 11.7.2019
on account of which, it could not reply in
time. Only on receiving the reminder notice
dated 8.8.2019, a reply was submitted on
20.8.2019, but the same was not considered
by the Authority. It has been argued that in
the reply dated 20.8.2019, it was pointed
out that 485 buyers out of 533, i.e. more
3 All. Psa Impex Private Ltd. Vs. Real State Appellate Tribunal Lko. & Ors.
1101
than 2/3rd of the allottees, have submitted
the consent to continue with the Project and
a request was made to convert the case
under Section 15 of the Act and not to deregister the Project. In the two meetings
held
26.9.2019
and
27.9.2019,
the
Authority passed a resolution for deregistering the Project of the Appellant.

19. It has been argued that the
operative portion of the order dated
30.09.2019 to de-register the Project of the
Appellant, and the approved draft of
detailed order of the Authority were
prepared by some unknown person, the
Authority concluded the meetings with a
direction to the Secretary, R.E.R.A. to
communicate the order under his signature.
Neither did the Appellant get any personal
nor any oral hearing by the Authority by
fixation of date, time and place, nor any
detailed order was passed by the Authority
regarding revocation of registration of the
Project. It was argued that the Agenda of
the meeting dated 27.9.2019 clearly shows
that no discussion of the reply submitted by
the Appellant was undertaken by the
Authority and only a one page (operative
portion of the order) was passed by the
Chairman
of
the
Authority,
while
approving the draft of the order prepared by
some other person.

20. Sri Shobhit Mohan Shukla, on the
other hand, has argued that on 17.5.2019,
the Authority directed the Promoter to
furnish clarification/action plan along with
updated list of home buyers, who had opted
for ready to move in houses, those who had
opted for refund/exit from the Project, and
those who had consented to continue in the
Project, the cash flow plan to manage the
finances for the proposed construction plan
and
documentary
evidence
which
supported the claim of the Promoter that
Rudra Build Well Construction Private
Limited had become hundred percent
shareholder
of
the
Company.
The
Appellant submitted its reply on 20.5.2019
saying that Shri Raj Kumar, the Chairman
of Rudra Build Well Constructions Private
Limited had joined the Board of Directors
of the Company and 99.75%, of the shares
of the Company had been transferred to
him.

21. The Authority after considering
the reply of the Promoter and with a view
to giving it opportunity to comply with the
provisions of Section 15 of the Act, passed
an order on 11.7.2019. The Promoter was
directed to submit within 15 days, the
consent for transfer of the Project of the
majority of the shareholders supported by
their affidavits. Based on consent of not
less than 2/3rd of the allottees, a public
notice was to be issued thereafter with
proper advertisement about date and place
of hearing and method for filing objections
before the Authority, if any. The final
decision on the show cause notice dated
8.3.2019 was put on hold till the decision
on the proposal of the Promoter to be taken
by the majority of the home buyers.

22. The Promoter did not comply with
the order dated 11.7.2019 and keeping in
view the conduct of the Promoter, the
matter was thoroughly deliberated by the
Authority in its meeting dated 26.9.2019
and 27.9.2019, where the Authority came
to the conclusion that the Promoter had not
given details with documentary evidence as
required under the Act and the Rules i.e.
under the provisions of Sections 4 and 11
of the Act, and Rule 14 of the Rules on the
R.E.R.A. Website. On the website, the
Promoter had declared 1.12.2014 as the
date of commencement of the Project and
30.11.2019 as the date of completion of the
1102 INDIAN LAW REPORTS ALLAHABAD SERIES
Project. However, only 10% of the work on
the Project was done and only two months'
time was left to complete the Project as per
the date of completion declared on the
website. The report of on the spot
inspection carried out by the team of
Engineers and the facts as were mentioned
in the complaints of the allottees clearly
made out that the Promoter was detained in
jail and for the past two years or more, no
construction work was done on the Project.
The report submitted by M/s Currie and
Brown India Ltd., was also considered
where it was stated that the Promoter had
diverted Rs.47 Crores collected from the
allottees, which amounted to a breach of
trust and constituted a criminal offence.

23. In view of the deliberation carried
out on 26.9.2019 and the conclusions
reached from the said deliberations on
27.9.2019, in order to protect the interests
of the allottees and to facilitate the
remaining work of the Project to be
completed as per the provisions of the Act
and the Rules, the Authority decided to
revoke the registration of the Project with
immediate effect and also to proceed under
Section 8 of the Act.

24. It was argued by Sri Shobhit
Mohan
Shukla
that
in
the
written
submissions before the Appellate Tribunal,
the Authority also undertook to produce the
original records relating to the 22nd
Meeting held on 27.9.2019 at the time of
hearing of the case by the Tribunal. The
Authority had noted that although the
transfer of shares etc. comes within the
domain of Companies Act, still as per
Section 15 of the Act, the majority shares
of the Project can be transferred only with
the prior written consent of 2/3rd of the
allottees and prior approval of the
Authority. The Authority found that the
Promoter had transferred majority shares to
one Mr. Raj Kumar of Rudra Build Well
Construction
Private
Limited
without
following the provisions of the Companies
Act as well. Such a transfer being against
the Companies Act, the name of Mr. Raj
Kumar was not even mentioned in the list
of Directors of the Company available on
the Website of Registrar of Companies.

25. The Authority in its meeting dated
26.9.2019 noted several irregularities and
directed for framing of a draft order, giving
reasons for revocation of registration. In the
meeting held on 27.9.2019, the Authority
approved the draft order for revocation of
registration.

26. It was argued by Sri Shobhit
Mohan Shukla that the decision with regard
to the Appellant had been taken by the
Authority as it had been mentioned at Page
353, which is in line with the power of the
Authority given to it under Section 7 of the
Act and includes revocation of registration
of the Appellant; the debarring of the
Promoter from accessing the R.E.R.A.
website
in
relation
to
the
project;
mentioning his name in the list of
defaulters and displaying his photograph on
the website and informing all other Real
Estate
Regulatory
Authorities
in
the
country
about
revocation
of
such
registration; as also freezing the account
maintained by the Promoter in relation to
the Project in ICICI Bank till further
orders.

27. The Authority had also taken a
decision to constitute a the Project
Monitoring
Committee
under
the
Chairmanship of the R.E.R.A. Member,
Mr. Balvinder Kumar; with the Chief
Executive Officer of Greater Noida; and
Mr.
R.D.
Paliwal,
a
Conciliation
3 All. Psa Impex Private Ltd. Vs. Real State Appellate Tribunal Lko. & Ors.
1103
Consultant; the Finance Controller of U.P.
the Authority; and the Technical Advisor of
U.P. the Authority as its Members. This
Committee was constituted to suggest ways
to the Authority to carry out its obligations
under Section 8 of the Act for completion
of the Project consequent upon revocation
of registration of the Promoter.

28.

Further,
the
Authority
in
discharge of its mandate under Section 8 of
the the Authority Act, issued a public
notice on 7.12.2019, calling upon the
Association of allottees to submit a viable
proposal for completion of the remaining
development work of the Project. A public
notice was issued after expiry of two
months' period stipulated for filing the
Appeal before the Tribunal. The Sampada
Livia
Buyers
Welfare
Association
submitted a proposal to carry out the
remaining
development
work
of
the
Project, which was thoroughly examined
by
the
Project
Advisory
Monitoring
Committee appointed for such purpose.
The Committee found the proposal of the
Buyers' Association to be feasible and the
report of the Committee was considered by
the Authority in its meeting held on
02.06.2020 and it permitted the Sampada
Livia Buyers' Association to carry out the
remaining development work of the Project
as per the terms and conditions laid down
in its order dated 6.6.2020.

29. An authorisation letter was issued
on 26.6.2020. Another letter was issued by
the Authority to the Promoter directing him
to handover the possession of the Project
along with the structures and entire assets
standing thereon to the Association.

30. The Authority had also proposed
policy guidelines to be followed by the
Authority to facilitate completion of the
Project under Section 8 of the Act and the
Government has subsequently approved the
proposal of the Authority and issued policy
guidelines to be followed in all such
matters by a Government Order dated
26.6.2020.

31. It has been submitted by Sri
Shobhit Mohan Shukla that the Appellant
had earlier taken the plea that the order
passed by the Authority under Section 38
had been passed by a single Member,
which was turned down by the High Court
in Writ-C No.3259 of 2020: PSA Impex
Private Limited versus State of U.P. and
others, decided on 6.2.2020. In yet another
writ petition, namely, Writ-C No.2248 of
2020: M/s KDP Build Well Private Limited
Versus State of U.P. and four others, the
High Court has again turned down the plea
of the builder that the order passed by the
Authority had, in fact been passed by the
single
Member,
which
was
without
jurisdiction. It has been held by the
Division Bench of this Court that the
Authority has the power to take decision
authorising not only the Secretary to
communicate the decision of the Authority,
but also a single Member to decide cases.

32. Sri Shobhit Mohan Shukla has
further emphasized that in the instant case,
the decision had been taken by the
Authority, not by a single Member, and it
had only been communicated by the
Secretary. The Agenda for the 22nd
Meeting held on 26.6.2019 has also been
filed at Page 342 of the paper book. It
contains ten Items of which, Agenda Item
No.22.1 relates to the Appellant, M/s. PSA
Impex Private Limited.

33. In rejoinder to the arguments of
the counsel appearing for the Appellant, Sri
Sudeep Seth, learned Senior Counsel
1104 INDIAN LAW REPORTS ALLAHABAD SERIES
appearing for the Appellant has read out the
last sentence on Page 343 of the paper
book, which is as follows:

"uparyukt ullikhit paristhitiyon
mein
pradhikaran
ke
samaksh
prakaranvistrit vichar vimarsh evam nirnay
hetu evam prastawit aadesh ke aalekh sahit
prastut hai."

34. It has been argued by the learned
Senior Counsel that the draft of the order to
be passed by the Authority had been
prepared by the Secretary and it was placed
before the Authority only for its approval.

35. Sri Shobhit Mohan Shukla, on the
other hand, has read out Pages 352 and 353
of the paper book to emphasize that
Agenda Item may have been prepared by
the Secretary, the actual deliberation on
such Agenda Item was done on 26.9.2019
and 27.9.2019 by the Authority. The
decision on each of the Agenda Items was
taken thereafter by the Authority itself.

36. Learned Senior Counsel to
substantiate his arguments has relied upon
the following case laws:

(i) Sahni Silk Mills Pvt. Ltd. vs.
Employees' State Insurance Corporation;
1994 (5) SCC 346.

(ii) State of West Bengal vs.
Subhash Kumar Chaterjee; (2010) 11 SCC
694.

(iii)
Automotive
Tyre
Manufacturers Association vs. Designated
Authority and others; (2011) 2 SCC 258.

(iv) K. Arockiyaraj vs. Chief
Judicial Magistrate and another, 2013 SCC
Online Madras.

(v) Rajendra Pratap and others vs.
Sadasiva Rao KTSSK Ltd.; (2012) 4 SCC
781.

(vi) Jagannath Temple Managing
Committee vs. Siddha Matha.

37. This Court has carefully perused
the order dated 30.09.2019 issued by Real
Estate Regulatory Authority. It is apparent
that in the first two pages, the Authority has
referred to 24 complaints being filed by
home buyers under Section 31 of the Act
regarding
various
irregularities
and
violation of the provisions of the Act and
the Rules on the part of the Promoter,
which have been summarised and mention
has also been made that despite notices
having been sent through e-mail, the
Promoter did not respond to the notices.
Later the complainants informed the Real
Estate Regulatory Authority that the
Promoter was in jail. Taking into account
the complaints under Section 31 of the Act,
Real Estate Regulatory Authority examined
the information uploaded by the Promoter
on the website till 25.02.2019. The
information has to be provided under
Section 11 and Rule 14 and continuous and
regular updation of such information on UP
Real Estate Regulatory Authority web page
has to be done by the Promoter. No
Quarterly
Progress
Report
had
been
uploaded. Taking into account the lapse on
the part of the Promoter, the Authority had
asked its technical advisor i.e. the Chief
Engineer to constitute a team and to make a
spot inspection of the site and submit a
report. The spot inspection of the site was
done
and
the
report
submitted
on
26.02.2019 along with photographs.

38. In the BBA, the date of
commencement of the Project was given as
01.12.2014. In four years i.e. up to
February, 2019, only 10% of the structural
work was done and it was evident that there
was no possibility of the Project being
completed and handed over to the buyers in
3 All. Psa Impex Private Ltd. Vs. Real State Appellate Tribunal Lko. & Ors.
1105
time. There was also the possibility of
diversion of the allottees' money. Hence,
the Authority asked the Chief Executive
Officer of Greater Noida to get an Audit
conducted of the Project. The Auditors,
M/s Currie and Brown Ltd, informed that
about Rs.47 crores had been diverted by the
Promoter.

39. In paragraph-7 of the order dated
30.09.2019, the reasons for issuing showcause notice for revocation of registration
have been given. The Authority found on
the basis of complaints made by the buyers,
and on the basis of incomplete information
uploaded by the Promoter on UP Real
Estate Regulatory Authority web page, and
on the basis of the report of spot inspection
and photographs of the Project, and on the
basis of the Audit report, that the Promoter
having registered the Project was not
interested in completing the same. The
Auditors' report also showed that the
Promoter had diverted several crores of
allottees'
money.
Hence
conditions
mentioned under Section 7(1) existed for
taking action under Section 7(2) of the Act.
The Promoter had committed a default on
all counts as mentioned under sub-section 1
of Section 7 and its various clauses. There
was a prima facie satisfaction that the
Promoter
was
indulging
in
several
fraudulent practices. The show-cause notice
was therefore issued on 08.03.2019 asking
the Promoter to submit his reply within 30
days.

40. In the order dated 30.09.2019,
the Authority has referred to a personal
hearing/meeting with the Promoter held
on
25.04.2019,
in
paragraph-13.
Therefore, the argument of the learned
Senior
Counsel
regarding
personal
hearing having not been given and the
order
having
been
passed
without
following the principles of natural justice
fails.

41. In paragraph-14 of the order
dated 30.09.2019 there is reference of
majority shares of the earlier Promoter
being transferred to the new Promoter,
but
the
same
had
been
done
in
contravention of Section 15 of the Act.
Section 15 of the Act imposed an
obligation on the Promoter in case of
transfer of a Real Estate the Project to a
third party, to obtain prior written
consent from 2/3 of the allottees, and also
to obtain prior written approval of the
Authority,
and
on
the
transfer
or
assignment
being
permitted
by
the
allottees and the Authority under subsection 1, the intending Promoter was
required to independently comply with all
the pending obligations under the Act and
the Rules and Regulations and as per the
Agreement for Sale entered into by the
erstwhile Promoter with the allottees. The
transfer or assignment of assets and
liabilities would not result in extension of
time to the intending Promoter to
complete the real estate the Project and
he was required to complete the same as
per the Builder Buyer Agreement.

42. In U.P. Avas Evam Vikas
Parishad and another Versus Friends
Cooperative Housing Society Limited and
Another reported in (1995) Supplement 3
SCC 456, the Supreme Court observed that
there is a distinction between permission or
"prior approval" and "approval." The
difference between approval and prior
approval or permission is that in the first
case the action holds good until it is
disapproved, while in the other case it does
not become effective until permission is
obtained. But permission subsequently
granted still validates the previous act. It is
1106 INDIAN LAW REPORTS ALLAHABAD SERIES
not necessary to obtain previous consent
before taking any action and its approval
would mean that such action is validated.

43. Where a statute uses the term
prior approval, anything done without prior
approval is a nullity; where a statute
employs the expression approval, however,
in such cases subsequent ratification can
make the act valid. In some cases, the word
''prior' and ''previous' may be implied if the
contextual
situation
or
circumstances
justify such reading otherwise if an act
requires only approval the action holds
good until it is disapproved. Since Section
15 of the Real Estate (Regulation and
Development) Act required prior approval
and not simply approval and there was no
prior approval either of the allottees or of
the Authority when shares of Appellant
was transferred to M/s Rudra Builders Pvt.
Ltd, the said transfer became vitiated and
could not be countenanced.

44. Section 34 of the Act provides for
the
functions
of
the
Authority
and
enumerates the same in several Sub-clauses
from a to h quoted hereinbelow:-

"34.
The
functions
of
the
Authority shall include--

(a) to register and regulate real
estate projects and real estate agents
registered under this Act;

(b) to publish and maintain a
website of records, for public viewing, of
all
real
estate
projects
for
which
registration has been given, with such
details as may be prescribed, including
information provided in the application for
which registration has been granted;

(c) to maintain a database, on its
website, for public viewing, and enter the
names and photographs of promoters as
defaulters including the project details,
registration for which has been revoked or
have been penalised under this Act, with
reasons therefor, for access to the general
public;

(d) to maintain a database, on its
website, for public viewing, and enter the
names and photograhps of real estate
agents who have applied and registered
under this Act, with such details as may be
prescribed,
including
those
whose
registration has been rejected or revoked;

(e) to fix through regulations for
each areas under its jurisdiction the
standard fees to be levied on the allottees
or the promoter or the real estate agent, as
the case may be;

(f) to ensure compliance of the
obligations cast upon the promoters, the
allottees and the real estate agents under
this Act and the rules and regulations made
thereunder;

(g) to ensure compliance of its
regulations or orders or directions made in
exercise of its powers under this Act;

(h)
to
perform
such
other
functions as may be entrusted to the
Authority by the appropriate Government
as may be necessary to carry out the
provisions of this Act."

45. This Court has also carefully
perused the order of the Tribunal impugned
in this Appeal dated 20.10.2020. The
Tribunal has referred to the brief facts of
the case as mentioned by the Appellant in
its Appeal in Paragraphs-1 and 2 of its
order.
It
has
also
referred
to
the
reply/written submissions in Paragraph 3.
Keeping in view the several replies of the
Promoter and his representatives, the
matter was thoroughly deliberated by the
Regulatory Authority in its meeting dated
26.9.2019 and 27.9.2019 and the draft of
the impugned order dated 30.9.2019 was
approved by the Authority. The Secretary,
3 All. Psa Impex Private Ltd. Vs. Real State Appellate Tribunal Lko. & Ors.
1107
R.E.R.A. had only communicated the
decision of the Authority for which, he was
duly authorised. In Paragraph 4 of its
judgment, the Tribunal has considered the
issues raised by the learned counsel for the
Appellant in the memo of the Appeal. It has
referred to the fact that although several
grounds were written in the Appeal, the
counsel for the Appellant during the course
of
hearing
had
confined
his whole
argument for assailing the order passed by
the the Authority principally on the
grounds; (a) that the Authority's order was
passed without jurisdiction by the Secretary
of the Authority; (b) It was in violation of
the provisions of Sections 20 and 21 of the
Act; (c) the order was passed without
considering the replies preferred by the
Appellant; (d) no reasons were assigned by
the Regulatory Authority for taking suo
moto action under Section 7 of the Act; (e)
no
authorisation
was
done
by
the
Regulatory Authority in favour of the
Secretary to pass the impugned order; (f) in
none of the complaints, the relief of
revocation of the registration of the
Promoter was sought; (g) the AppellantCompany had changed its Promoter with
the approval of 2/3rd of the allottees and
failure to take prior approval of the
Regulatory Authority under Section 15 of
the Act does not warrant the de-registration
of the Project.

46.

The
Tribunal
thereafter
summarised the facts as culled out from the
information supplied by the Appellant in
the grounds of the Appeal and the
Regulatory
Authority
in
its
written
submissions, and also examined the record
of the case sent from Gautam Buddha
Nagar.

47. The Tribunal has mentioned these
facts in Paragraph Nos.5, 5.01, 5.02, 5.03
of its order that the Project was registered
as an ongoing the Project in the month of
August, 2017 by the Promoter M/s. P.S.A.
Impex Private Limited in the name of
Sampada Livia. The commencement date
was given as 01.12.2014 and the proposed
completion date was 30.9.2019. The
original
commencement
date
of
construction
was
not
uploaded.
The
Promoter had provided very few details
about the Project on its web-page on
U.P.R.E.R.A. Website and only the cost of
the Project was given. The geographical
location, details like longitude and latitude
were not provided. The development work
and the structural construction carried out
was also not given in the description. The
column regarding details of the land was
left blank. The details of encumbrances etc.
were also not provided. The approved map
was not uploaded. The affidavit of the
Promoter under Section 4(2)(1) was also
not uploaded. There was no certificate of
the Chartered Accountant, no certificate of
the Engineer and no certificate of the
Architect. The ownership documents of the
land were not uploaded by the Promoter.
The annual audited balance sheets were
also not uploaded. No quarterly progress
report was uploaded. REG 5 Form as
provided in the Regulations was also not
uploaded. The floor plans of all types of
flats were not provided in the format
required and only unit plans were uploaded,
which were also not approved by any
Competent Authority.