Allahabad High Court
Emaar India Ltd. Thru. Authorized ... vs State Of U.P. Deptt. Of Housing And Urban ... on 30 September, 2022
Author: Devendra Kumar Upadhyaya
Bench: Devendra Kumar Upadhyaya
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH RESERVED Court No. - 2 Case :- WRIT - C No. - 2071 of 2022 Petitioner :- Emaar India Ltd. Thru. Authorized Representative Mr. Ashish Singh, Lko. Respondent :- State Of U.P. Deptt. Of Housing And Urban Planning Devlp. Thru. Addl.Chief Secy. Lko. And Others Counsel for Petitioner :- Sunil Kumar Singh Counsel for Respondent :- C.S.C.,Ratnesh Chandra,Shobhit Mohan Shukla Hon'ble Devendra Kumar Upadhyaya,J.
Hon'ble Subhash Vidyarthi,J.
1. Heard Shri Satish Chandra Misra, learned Senior Advocate, assisted by Shri Sunil Kumar Singh and Shri Kapil Misra, learned counsel representing the petitioner-company, learned State Counsel representing the State of Uttar Pradesh, Shri Anil Kumar Tiwari, learned Senior Advocate, assisted by Shri Shobhit Mohan Shukla, learned counsel representing Uttar Pradesh Real Estate Regulatory Authority and Shri Ratnesh Chandra,learned counsel representing the Lucknow Development Authority.
2. These proceedings under Article 226 of the Constitution of India have been instituted by the petitioner-company with the following prayers;
"(a.) Issue a writ of mandamus or any other appropriate writ order directing the Respondent Nos.1/State of Uttar Pradesh and Respondent No.3/LDA to resolve all the land related issues, expeditiously conclude the process of acquisition in accordance with the Integrated Township Policy, 2014 of Government of Uttar Pradesh and handover and make available the remaining land for the Project in a timely and orderly manner to the petitioner Company and allow the petitioner Company to continue with the development of the Project in the interest of justice and in the interest of allottees and for the overall development of Project as per the Integrated Township Policy of State of Uttar Pradesh.
(b) Issue a writ of mandamus or any other appropriate writ directing the Respondent No.2/UP RERA to consider the duration of non-action/inaction of/ on the part of the Respondent No.3/LDA in providing and making available the land to the petitioner from 2012 to 2022 as 'Zero Period' with respect to completion and handover of the land for timely completion of the Project.
(c) Issue a writ of mandamus or any other appropriate writ directing the Respondent No.2/UP RERA to consider the period from March, 2020-February, 2022 as 'Zero Period' with respect to completion and handover of the land for timely completion of the Project.
(d) Issue a writ of mandamus or any other appropriate writ order directing the Respondent No.2/UP RERA to consider the representation dated 27th January, 2022 in its letter and spirit and extend the Registration of the Project of the petitioner-Company in view of the land and legal issues and other issues and concerns elaborated by the Petitioner-Company in the said representation and also as otherwise submitted to Respondent No.2/UP RERA and the same shall be valid in prospective.
(e). Issue a writ of certiorari or any other appropriate writ order or direction to the Respondent No.2/UP RERA directing and declaring that there is no requirement of approval of allottees in case of lapse/revocation of Registration and the procedure followed by Respondent No.2/UP RERA is in violation of RERA Act and the Rules made thereunder as there is no provision under the said Act and the Rules requiring such requirement."
3. The facts of the case, as submitted by the learned counsel representing the respective parties and culled out from the pleadings available on record, are as follows.
4. The State Government promulgated a policy for acquisition of land for residential projects and its development in the urban areas of the State of Uttar Pradesh through investment by the private sector. The said policy is embodied in the Government Order dated 21.05.2005.
5. The aforesaid policy by the State Government was issued considering the ever increasing pressure on housing and infrastructure facilities in the urban areas of the State of U.P. on account of accelerated urbanization. The said policy envisages the role of the State Government as a facilitator rather than a developer. The policy further lays emphasis on solving the problems and stumbling blocks being felt in the development and construction work by private sector and also for simplification of the processes. The object of the policy contained in the Government Order dated 21.05.2005 is also to invite and encourage investment of capital by the private sector.
6. Under the policy of the State Government laid down by the Government Order dated 21.05.2005, Lucknow Development Authority granted a licence to the petitioner-company for developing a housing scheme in the villages Sarsawa, Ardonamau and Ahmamau, Pargana, Tehsil & District-Lucknow on 28.04.2009. Lucknow Development Authority thereafter executed a Development Agreement with the petitioner-company on 24.12.2011 for developing the residential scheme in an area of 226.37 acres. In the agreement, it is clearly recited that the land owned by the Licensee is about 60% of the total land proposed to be assembled and further that there are certain other pockets of land, not more than 40% land of the project area, which are as yet not owned and possessed by the petitioner-company. The agreement also recites that the petitioner-company has requested the Government agency, namely, Lucknow Development Authority for acquisition of pockets of land not possessed by the petitioner-company and the said Government agency has consented for the same. It further recites that the Government Agency i.e. Lucknow Development Authority assured the petitioner-company that it will acquire land under the Land Acquisition Act,1894 and shall hand over/transfer the said land as freehold to the petitioner on deposit of acquisition cost and administrative charges.
7. The Development Agreement dated 24.12.2011 further recites that in case any land falls within any Gram Samaj or Land Management Committee or is under the Management of a Local Authority, the Government agency, namely, Lucknow Development Authority, shall request the Government of Uttar Pradesh to resume the said land and transfer the same to the petitioner-company for which it is the petitioner which shall bear the cost of land and other charges which may be incurred on resumption and transfer of such land.
8. As per the submission made by the learned counsel representing the petitioner-company, the total project area is 226.37 acres out of which 178.347 acres is owned by the petitioner, 11.851 acres of land is revenue Rasta or Banjar land and 36.171 acres of land is to be acquired by the State Government/Lucknow Development Authority.
9. It has also been stated by the learned counsel for the petitioner that pursuant to the Development Agreement executed between the petitioner and Lucknow Development Authority on 24.12.2011. the project was launched by the petitioner in the year 2012.
10. The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as 'the Act 2016') was passed by the Parliament in the year 2016. Certain provisions of the Act came into force w.e.f. 01.05.2016 and remaining provisions came into force w.e.f. 01.05.2017 by means of two separate notifications published in the official gazette and issued by the Central Government in terms of the provisions contained in section 1 (3) of the Act 2016.
11. On coming into force the Act 2016, the project in question which is known as "Gomti Greens Integrated Township" was registered under section 5 of the Act 2016 with U.P. Real Estate Regulatory Authority (hereinafter referred to as "RERA") and accordingly Registration Certificate of the said project was granted on 30.07.2017 for development over an area of 114 acres of land. The Registration with RERA was valid for a period of 6 years commencing from 01.10.2013 and ending on 22.12.2019. The Registration Certificate provided that the registration shall be valid for the aforesaid period of 6 years unless it is renewed by RERA in accordance with section 6 of the Act, 2016 read with rule 7 of the Rules framed thereunder.
12. Lucknow Development Authority by means of a letter dated 29.06.2019 granted extension to the period of layout plan/license of the project in question till 22.12.2023. Accordingly, so far as the layout of the project in question is concerned, the period available to the petitioner for completion of the same is till 22.12.2023.
13. On an application made by the petitioner, RERA extended the registration of the project in question till 21.12.2020 under section 6 of the Act 2016 read with Rule 7 of the Rules framed thereunder.
14. U.P. Real Estate Regulatory Authority on 06.06.2020 issued an order considering the spread of Covid-19 providing therein that all registered projects for which completion date or revised or extended completion date expires on or after 25.03.2020, the Registration and completion date or revised/extended completion date shall be extended by six months. The said order dated 06.06.2020 was issued by the RERA on the advice of the Government of India and in terms of the provisions contained in Section 6 and other enabling provisions contained in the Act 2016 which permitted extension of Registration on account of force majeure. Consequently, by means of an order dated 03.07.2020 the Registration of the Project in question was extended till 20.06.2021.It is to be noted, at this juncture, that after 20.06.2021 Registration of the Project being promoted by the petitioner-company with RERA was not extended, in other words it lapsed on 20.06.2021.
15. After the Registration of the Project in question lapsed with RERA on 20.06.2021, a show cause notice was issued vide letter dated 02.09.2021 under section 3/4/8/11 of the Act 2016 stating therein that the petitioner-company has failed to discharge its duties as a promoter under the Act 2016 and accordingly RERA required the petitioner-company to submit a proposal with the consent of Association of Allottees to complete the project. The notice further required the petitioner-company to give explanation as to why the petitioner-company may not be proceeded against under section 8 of the Act 2016 and as to why the petitioner-company may not be imposed certain restrictions as detailed in paragraph 7 (d) and ([k) of the said notice. Paragraph 7 (d) of the notice states that in case the promoter fails to complete its project within the period of registration under the provisions of the Act 2016, the promoter can be prohibited from advertising, marketing, booking, sale, accepting the deposits from the allottees and operation of bank account. Paragraph 7 ([k) of the notice dated 02.09.2021 also recites that as a result of non-completion of the project within the period of registration, operation of bank account of the Project may be prohibited. The petitioner-company is said to have submitted its reply to the said show cause notice dated 02.09.2021 by means of the letter dated 09.09.2021 giving in detail the reasons as to why no action against the petitioner-company is warranted under section 8 of the Act 2016. The petitioner-company was issued a supplementary show cause notice on 12.10.2021, pursuant to which it is said to have submitted its reply by means of the letter dated 29.10.2021 and thereafter another notice dated 13.11.2021 has been issued to the petitioner-company by RERA.
16. It has been stated by the learned counsel for the petitioner-company that apart from submitting the replies to the show show cause notices issued by RERA, as noted above, the petitioner has also made an application pursuant to office order dated 18.08.2021 issued by the U.P. Real Estate Regulatory Authority. The said office order dated 18.08.2021 has been issued on the representations submitted by the Confederation of Real Estate Developers' Associations of India and National Real Estate Development Council. The representations of these two Associations of Developers were given in the wake of the difficulties caused on account of Covid-19 pandemic. In the wake of stress on economic conditions on account of Covid-19 Pandemic, the Associations of Promoters requested that the period of 03.03.2020 to 31.12.2021 be declared as period of force majeure with no liabilities, responsibilities and penalties upon the Promoters under the Act 2016. It was also requested that completion dates of the projects ending on 01.03.2020 be extended by 1 year and 9 months to December, 2021 and also that benefit of waiver of fees/penalties applicable on extension of the projects or any delay may also be given.
17. U.P. Real Estate Regulatory Authority while considering the request of the Associations of the Promoters issued the aforesaid office order dated 18.08.2021 and provided that the registration period of the projects shall be extended by six months and registration and completion date or revised/extended completion date of all the registered projects for which completion date was ending on or after 25.03.2020 shall be extended. It was also decided by RERA that extension shall be granted suo motu without charging any fee from the Promoters. The RERA also provided vide office order dated 18.08.2021 that registration of the projects may be extended by one year and further that the Authority may also grant extension of registration upto maximum period of 15 months in National Capital Region (NCR) and 12 months in the districts outside the National Capital Region, which includes 6 months extension already granted on the ground of adverse impact of the first wave of the Covid-19 Pandemic. The Authority also decided that such extension shall be granted on an application to be preferred by the Promoters as per section 6 of the Act 2016 read with Rule 7 of the Rules. As per the officer order dated 18.08.2021 RERA also resolved to send a recommendation to the State Government in the Departments of Housing and Industrial Development using its powers under section 32 of the Act 2016 for direction to all competent authorities to extend the validity of the maps/NOCs for a further period of nine months without any charge/fees/penalties/cess.
18. It has been stated in the writ petition by the petitioner-company that pursuant to the office order dated 18.08.2021 issued by the RERA,the petitioner-company submitted its application for extension of registration of the project on 16.09.2021. The said application is on record as Annexure-44 appended to the writ petition.
19. In the aforesaid background facts, it has been submitted on behalf of the petitioner-company that delay in development of the project in question has occurred not on account of any lapse on the part of the petitioner-company but on account of in-action on the part of the Lucknow Development Authority and the State Government. In this regard it has been submitted on behalf of the petitioner-company that delay in completion of the project is attributable to non-fulfillment of the obligations by the Lucknow Development Authority and the State Government as per the Development Agreement for the reason that the Lucknow Development Authority has not acquired the land which it was under obligation to acquire and similarly the State Government has also not resumed the Gaon Sabha land (revenue Rasta and Banjar land etc.) and has not transferred such land to the petitioner-company which is the sole reason for delay in completion of the project. In this view, submission is that considering the facts and circumstances of the case, the extension of registration of the project of the petitioner-company is warranted. It has further been stated that acquisition of land has not been completed by the Lucknow Development Authority and similarly the exchange of land owned by the State/Gaon Sabha, namely, revenue Rasta and Banjar land etc. (an area of 8.192 acres of land) has also not been completed. Besides non-completion of the process of resumption of land by the State and transferring the same to the petitioner-company and acquisition of land by the Lucknow Development Authority and transfer of the same to the petitioner, it has also been submitted that Lucknow Development Authority has encroached certain area of land. Apart from the aforesaid reasons, the petitioner-company in the writ petition has also stated that on account of Pandemic caused by Covid-19 the project is delayed and as such for the aforesaid reasons the delay in the project cannot be attributed to the petitioner-company.
20. Shri S. C. Misra, learned Senior Advocate appearing for the petitioner-company has vehemently argued that section 6 of the Act, 2016 clearly provides for extension of registration of project registered under the Act, 2016 due to force majeure and various inactions pointed out in the writ petition at the end of Lucknow Development Act and the State Government, in this case, will constitute force majeure, and hence the petitioner is entitled to seek extension of registration. It has further been argued by the learned counsel for the petitioner that section 7(4) of the Act 2016 which spells out consequences of revocation of the registration, will not be applicable in the present case for the reason that the registration of the project being promoted by the petitioner-company in this case has not been revoked by RERA on account of any default on the part of the petitioner-company, rather it has lapsed. Accordingly, submission is that it is a case of lapse of registration and not that of revocation of registration as such no action as contemplated in section 7(4) of the Act 2016 is permissible against the petitioner-company. Further submission advanced by the learned counsel for the petitioner-company is that second proviso appended to section 8 of the Act 2016 is applicable in case of revocation of registration of a project and it is only in case of revocation of registration that the Association of Allottees shall have first right of refusal for carrying out of the remaining development works.
21. Submission of Shri Misra, learned Senior Advocate appearing for the petitioner, thus, is that since it is not a case of revocation of registration of the project being promoted by the petitioner-company; rather it is a case of lapse of registration as such the proceedings for engaging the Association of Allotees in this case for completion of the remaining development work of the project is impermissible.
22. On the aforesaid basis and grounds, learned Senior Advocate representing the petitioner-company has vehemently argued that in the light of the facts and circumstances of the present case, the notice issued by U.P. Real Estate Regulatory Authority under section 8 of the Act 2016 and other such notices are not lawful and hence the same cannot be permitted to be acted upon. It has, thus, been prayed by the learned Senior Advocate that in the facts and circumstances of the case the Lucknow Development Authority as also the State Government ought to be directed to resolve all the land related issues by concluding the process of acquisition and resumption etc. of land and transferring the same to the petitioner-company. It is in these background facts that Shri Misra, learned Senior Advocate, has prayed that RERA may be directed to consider the prayer for providing the benefit of period from 2012 to 2022 in respect of completion of the project and further to grant the benefit of zero period from March, 2020 till February 2022.
23. Learned counsel for the petitioner-company has also brought to our notice a circular dated 18.09.2021 issued by the Chairperson of Real Estate Regulatory Authority, Punjab which has been issued considering the cases in which even extended period of validity of registration under Section 6 of the Act, 2016 had lapsed and the projects were still not complete. The said circular dated 18.09.2021 also states that the matter was taken up by Real Estate Regulatory Authority, Punjab with the State Government of Punjab and thereafter the Government of Punjab advised that validity of registration of such projects may be extended till such time as the licence granted or renewed by the competent authority is valid. The circular also states that RERA, Punjab has accepted the advice of the State Government of Punjab and decided to extend the validity of the Registration of such projects under section 8 of the Act, 2016 up to the validity of licence granted to the promoter upon an application made by the promoter in this regard. The circular dated 18.05.2021 further provides that fee of 33% of the normal fee which was paid at the time of registration of the project will be levied as one time fee for such extension. On the basis of such circular dated 18.09.2021 issued by the Real Estate Regulatory Authority, Punjab, it has been argued on behalf of the petitioner-company that such extension in the present case is also permissible and as such appropriate directions may be issued to the Real Estate Regulatory Authority, U.P. to grant extension of registration of the projects being promoted by the petitioner-company.
24. Per contra, Shri Tiwari, learned Senior Advocate, assisted by Shri Shobhit Mohan Shukla, representing the U.P. Real Estate Regulatory Authority vehemently opposed the prayers made in the writ petition and has submitted that the writ petition is highly misconceived inasmuch as that under section 6 of the Act, 2016 extension of registration cannot be granted beyond the period of one year and further that in fact after grant of extension firstly for one year till 21.12.2020 and thereafter from 21.12.2020 to 20.06.2021 and thereafter again from 20.06.2021 to 20.12.2021 the petitioner is not entitled for extension of registration of the project in question.
25. Taking the Court to the scheme of the Act, 2016, it has been argued on behalf of the RERA that the Act, 2016 has to be interpreted bearing in mind the purpose and object sought to be achieved. According to the learned counsel representing the Authority, Parliament has enacted the Act, 2016 with a view to provide a cure for mischiefs being reportedly committee by the promoters in Real Estate sector which affect the persons desirous of owning dwelling accommodation. It has been stated further that by enacting the Act, 2016 the Parliament has provided for substantive rights of the allottees and remedial measures in case the allottees are made to suffer on account of non-fulfillment of their duties by the promoters.
26. Learned counsel representing the RERA has argued that while seeking registration of the project in question the petitioner-company was required to furnish various informations and accordingly an application for registration was made for a project with total land area of 114.35 acres out of the total land area of 226.37 acres mentioned in the Development Agreement executed by the Lucknow Development Authority. In this view, submission is that the project registered with RERA involves an area of only 114.35 acres of land and as per the petitioner-company itself, as mentioned in the writ petition, it had already purchased land admeasuring 197.566 acres which is owned by the petitioner-company and hence the reason being attributed to Lucknow Development Authority and the State Government for delay in completion of project is not tenable.
27. Drawing attention of the Court to the statement of facts mentioned in paragraph 14(e) of the writ petition, it has been argued on behalf of the RERA that the petitioner-company itself admits that it owned and possessed 197.566 acres of land which is much more than the area of land for which the project in question has been registered with RERA i.e. 114.35 acres. It has also been argued by the learned counsel representing the RERA that though on account of repeated Covid-19 outbreaks, RERA took a policy decision which is contained in the order dated 18.08.2021 for the purposes of extension of period of registration, however, though the petitioner-company did not make any application in the format prescribed for the said purpose, even then registration of the project was extended upto 21.06.2021. It has been stated that it is only thereafter that the show cause notice dated 02.09.2021 has been issued to the petitioner-company.
28. Submission on behalf of U.P. RERA further is that in terms of the provisions contained in section 6 of the Act, 2016 extension of registration is permissible to be granted by RERA due to force majeure and also in reasonable circumstances without any default on the part of the promoter, based on facts of each case. Such extension, according to the learned counsel representing the RERA, is permissible for a maximum period of one year in terms of the first proviso appended to section 6 of the Act, 2016. It has also been argued on behalf of the RERA that about 47 complaints have been received against the petitioner-company from their allottees and out of these complaints, in 25 cases, possession has been directed to be handed over to the allottees and in 4 cases payments have been directed to be made to them and further, in 3 cases for making recovery of the amount ordered to be paid to the allottees, recovery certificates have been issued for recovering the amount as arrear of land revenue. It has also been submitted that at the time of seeking registration, the petitioner-company had filed affidavit in terms of the requirement of section 4(2)(l) of the Act, 2016 declaring therein that the petitioner-company had a legal title to the land on which the development of the proposed project is to be carried out. In this view, submission is that delay being attributed by the petitioner-company in completion of project to the Lucknow Development Authority and State Government is thus, not tenable. On behalf of the RERA, it has also been argued that the Authority has been assigned certain functions under section 32 of the Act, 2016 and it is in fulfillment of its statutory obligation of protecting the interest of the allottees and promoter as well that it has required the petitioner-company to submit the proposal with the consent of the Association of Allottees and hence there is no illegality in the notice issued under section 8 of the Act, 2016, dated 02.09.2021. According to RERA, the notice, thus, has been issued to ensure completion of the project and not to hamper the same. The submission, thus, is that the writ petition deserves to be dismissed outrightly.
29. We have given our thoughtful consideration to the rival submissions made by the learned counsel representing the respective parties. Primarily, the petitioner-company has prayed that the RERA be directed to provide benefit of zero period from March, 2020 till February, 2022 in respect of completion of project. The said prayer is based on the submission that since the obligation of providing the land by acquisition under the relevant statute by the Lucknow Development Authority has not been fulfilled under the Development Agreement and further that the State Government has also not resumed the land vested in Gaon Sabha as revenue Rasta and Banjar land etc. as per its obligations under the Development Agreement, delay in completion of the project is not attributable to the petitioner-company. The aforesaid submission made on behalf of the petitioner-company does not appear to be tenable for the reason that registration of the project with RERA is in respect of the land over an area of only 114.35 acres, out of the total area of 226.37 acres as mentioned in the Development Agreement. It is also noticeable that as per the admission of the petitioner-company itself, it owns and possesses the land admeasuring 197.566, which is more than 114.35 acres of land, for which the project of the petitioner-company is registered with RERA. Accordingly, we have no ambiguity in our mind that since the project is registered only for 114.35 acres of land and the petitioner-company, admittedly, owns an area of 178.347 acres, even if it is assumed that Lucknow Development Authority and the State Government have not fulfilled their obligations under the Development Agreement by not making available the land by acquisition or by resumption, delay in completion of the project is clearly not attributable to the Lucknow Development Authority or the State Government as the petitioner-company already possessed more than 114.35 acres of land which was disclosed by it by filing the affidavit in fulfillment of requirement of section 4(2)(l) of the Act, 2016 at the time of seeking registration of the project with RERA.
30. The submissions made by Shri Misra, learned Senior Advocate, representing the petitioner-company that in-action on the part of the Lucknow Development Authority and the State Government in acquiring and resuming the land and thereafter handing over the possession of the same to the petitioner-company will constitute force majeure is also not tenable. In this regard, it is noticeable that section 6 of the Act, 2016 provides for extension of registration, according to which registration of a project can be extended by RERA on an application to be made by the promoter due to force majeure. The explanation appended to section 6 of the Act, 2016 clearly provides the meaning of the expression "force majeure", according to which force majeure shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project. Section 6 of the Act, 2016 is quoted hereunder;
"6. Extension of registration.--The registration granted under section 5 may be extended by the Authority on an application made by the promoter, due to force majeure, in such form and on payment of such fee as may be [prescribed]:
Provided that the Authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year:
Provided further that no application for extension of registration shall be rejected unless the applicant has been given an opportunity of being heard in the matter.
Explanation.-- For the purpose of this section, the expression "force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project. "
31. Rule 7 of U.P. Real Estate (Regulation and Development) Rules, 2016 (hereinafter referred to as "the Rules, 2016) framed under section 84 of the Act, 2016 provides the procedure for extension of registration of the project, according to which extension of registration is permissible on an application to be made by the promoter in form-E. It also requires certain other formalities to be completed by the promoter seeking extension of registration. Rule 7(3) provides that extension of registration of a project shall not be beyond the period provided as per local laws for completion of the project or any phase thereof. Rule 7 of the Rules, 2016 is also extracted hereunder;
7. Extension of registration of the project.-(1) The registration granted under section 5, may be extended as per section 6, on an application made by the promoter in Form ''E' which shall not be less than three months prior to the expiry of the registration granted.
(2) The application for extension of registration shall be accompanied with a demand draft drawn on any scheduled bank, for an amount equivalent to twice the registration fee as prescribed under sub-rule (3) of rule 3 along with an explanatory note setting out the reasons for delay in the completion of the project and the need for extension of registration for the project, along with documents supporting such reasons: Provided that where extension of registration is due to force majeure the authority may at its discretion waive the fee for extension of registration.
(3) Extension of registration of the project shall not be beyond the period provided as per local laws for completion of the project or phase thereof, as the case may be.
(4) In case of extension of registration, the regulatory authority shall inform the promoter about the same as per Form ''F' and in case of rejection of the application for extension of registration the regulatory authority shall, after giving an opportunity to the applicant to be heard in the matter as per second proviso of section 6, inform the promoter about the same as per Form ''D':
32. The Rules, 2016 do not provide any other definition of; neither does it assign any other meaning to the expression force majeure as is assigned to this expression in the explanation appended to section 6 of the Act, 2006. Accordingly, except for the exigencies mentioned in the explanation, no other situation, in our considered opinion will constitute force majeure. Apart from different exigencies and situations mentioned in the explanation appended to section 6 of the Act, 2016, "any other calamity caused by nature affecting the regular development of the real estate project" is also a situation which constitutes force majeure, however, non-fulfillment of any contractual obligation arsing out of the Development Agreement either by the Lucknow Development Authority or by the State Government, in our considered opinion, will not fall in the explanation appended to section 6 of the Act, 2016 for constituting force majeure. In this view, we are of the considered opinion that the alleged non-fulfillment of the contractual obligation in terms of the provisions contained in the Development Agreement does not constitute force majeure as per the provisions of section 6 of the Act, 2016. The submissions made on behalf of the petitioner-company in this regard, thus, merits rejection, which is hereby rejected.
33. It is also to be noticed that so far as the RERA is concerned, apart from having authority and power to grant extension of registration due to force majeure it is also vested with the power to extend the registration granted to a project for such time as it considers necessary, however, such extension in aggregate cannot exceed a period of one year. Accordingly, so far as extension due to force majeure is concerned, the period of such extension which is permissible under section 6 of the Act, 2016 is not prescribed in the Act, 2016, however, in case of extension being sought on the ground of existence of reasonable circumstances without any default on the part of the promoters, extension by RERA is permissible not beyond the period of one year.
34. So far as the facts of the instant case are concerned, we have already noticed that initially extension of registration of the project in question was granted by the RERA upto 21.12.2020 and thereafter it was extended due to force majeure till 21.06.2021. In view of the situation caused by Covid-19, further extension of registration till 20.06.2021 was granted by RERA by means of office order dated 03.07.2020 in view of the policy decision embodied in the order of RERA, dated 06.06.2020 which was based primarily on account of force majeure caused because of Covid-19. Prior to the said extension granted on 03.07.2020, extension of the registration of the project was granted by the RERA by means of an order dated 14.12.2019 on the prayer made by the petitioner-company till 21st of December, 2020. It is also noticeable that in the light of the policy decision of RERA, dated 18.08.2021 further extension of six months was granted to the petitioner-company in respect of the project in question till 19.12.2021 which has been communicated to the petitioner-company by means of an order dated 23.04.2022.
35. In view of the aforesaid facts and legal position which emerges from a bare reading of section 6 of the Act, 2016, we are of the considered opinion that further extension of registration of the project in question under section 6 of the Act, 2016 may not be permissible.
36. We now proceed to consider the submissions made on behalf of the petitioner-company that the action under section 7(4) of the Act, 2016 will not ensue in this case for the reason that it is not a case where registration of the project in question has been revoked, rather it is a case where the registration has lapsed. Section 7 of the Act, 2016 is quoted hereunder:
"7. Revocation of registration.--(1) The Authority may, on receipt of a complaint or suo motu in this behalf or on the recommendation of the competent authority, revoke the registration granted under section 5, after being satisfied that-
(a) the promoter makes default in doing anything required by or under this Act or the rules or the regulations made thereunder;
(b) the promoter violates any of the terms or conditions of the approval given by the competent authority;
(c) the promoter is involved in any kind of unfair practice or irregularities.
Explanation.--For the purposes of this clause, the term "unfair practice means" a practice which, for the purpose of promoting the sale or development of any real estate project adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:-
(A) the practice of making any statement, whether in writing or by visible representation which,-
(i) falsely represents that the services are of a particular standard or grade;
(ii) represents that the promoter has approval or affiliation which such promoter does not have;
(iii) makes a false or misleading representation concerning the services;
(B) the promoter permits the publication of any advertisement or prospectus whether in any newspaper or otherwise of services that are not intended to be offered;
(d) the promoter indulges in any fraudulent practices.
(2) The registration granted to the promoter under section 5 shall not be revoked unless the Authority has given to the promoter not less than thirty days notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered any cause shown by the promoter within the period of that notice against the proposed revocation.
(3) The Authority may, instead of revoking the registration under sub-section (1), permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter.
(4) The Authority, upon the revocation of the registration,-
(a) shall debar the promoter from accessing its website in relation to that project and specify his name in the list of defaulters and display his photograph on its website and also inform the other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration;
(b) shall facilitate the remaining development works to be carried out in accordance with the provisions of section 8;
(c) shall direct the bank holding the project bank account, specified under sub-clause(D) of clause (l) of sub-section (2) of section 4, to freeze the account, and thereafter take such further necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works in accordance with the provisions of section 8;
(d) may, to protect the interest of allottees or in the public interest, issue such directions as it may deem necessary.
37. Under the aforequoted section 7 of the Act, 2016 RERA has been given authority to revoke the registration of a project suo motu or on a receipt of a complaint in case promoter makes default or promoter violates any of the terms or conditions of the approval given by the competent authority or the promoter is involved in any kind of unfair practice or irregularities. The competent authority has been defined in section 2(p) of the Act, 2016, according to which "competent authority" means the local authority or any authority created under any law by the appropriate Government which exercises the authority over land under its jurisdiction and has powers to give permission for development of such immovable property. Clause 2(p) of the Act, 2016 is quoted hereunder;
"2(p) "competent authority" means the local authority or any authority created or established under any law for the time being in force by the appropriate Government which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property;"
38. Accordingly, the competent authority in the present case is Lucknow Development Authority which has been created under U.P. Urban Planning and Development Act, 1973 and it exercises powers to give permission for development in terms of the provisions contained in section 14 of the said Act. Thus, revocation of registration is permissible by RERA on the recommendation of Lucknow Development Authority and not otherwise. Sub section 2 of section 7 of the Act, 2016 provides that registration granted to a promoter will not be revoked unless the promoter is given 30 days notice in writing stating therein the grounds on which it is proposed to revoke the registration. Sub section 3 of section 7 of the Act, 2016 provides that RERA, instead of revoking the registration, may permit registration to remain in force subject to such further terms and conditions as the RERA thinks fit to impose in the interest of allottees and any such terms and conditions so imposed shall be binding upon the promoter.
39. Sub section 4 of section 7 of the Act, 2016 provides for certain consequences which ensue upon revocation of registration. In the instant case, there is nothing on record which suggests that any proceeding for revocation of registration of the project in question has been initiated or drawn.
40. The registration of the project in question rather has lapsed on 19.12.2021 on expiry of the period of extension granted by means of the communication dated 23.04.2022. In view of these facts, since the registration has not been revoked on the grounds mentioned in section 7(1), rather it has lapsed as such, in our considered opinion the consequences as mentioned in sub section4 of section 7 of the Act, 2016 may not ensue against the petitioner-company.
41. Having observed as above, we cannot, in the same breath, loose sight of the provisions contained in section 8 of the Act, 2016 which provides for certain obligations of RERA as a consequence of lapse of or on revocation of registration. Section 8 of the Act, 2016 is reproduced hereunder;
"8. Obligation of Authority consequent upon lapse of or on revocation of registration.--Upon lapse of the registration or on revocation of the registration under this Act, the Authority, may consult the appropriate Government to take such action as it may deem fit including the carrying out of the remaining development works by competent authority or by the association of allottees or in any other manner, as may be determined by the Authority:
Provided that no direction, decision or order of the Authority under this section shall take effect until the expiry of the period of appeal provided under the provisions of this Act:
Provided further that in case of revocation of registration of a project under this Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works."
42. From a perusal of aforequoted provisions of section 8 of the Act, 2016, it is clear that upon laps of registration or on its revocation, RERA may consult the appropriate Government to take such action as it may deem fit including carrying out of the remaining development works by the competent authority (which in this case will be Lucknow Development Authority) or by some Association of Allottees or in any other manner, as may be determined by the RERA. The second proviso appended to section 8 speaks about the first right of the Association of Allottees of refusal for carrying out of the remaining development works. As already observed above, it is a case of lapse of registration and not its revocation on the ground of default by the petitioner-company or violation of conditions of the approval given by Lucknow Development Authority or on account of involvement of the petitioner-company in any kind of unfair practice or irregularities. It is rather a case of lapse of registration of the project in question with RERA for the reason that the registration has not been extended after extension of registration of the project expired on 19.12.2021. The obligation cast on RERA under section 8 is to take action on lapse or or revocation of registration. Such action may include carrying out the remaining development work by the competent authority (Lucknow Development Authority) or by the Association of Allottees or in any other manner to be determined by RERA in consultation with the appropriate Government ( in this case State of U.P.)
43. One argument raised by the learned counsel representing the petitioner-company is that the notice date 02.09.2021 has been issued by RERA under section 8 of 2016 Act without any consultation with the State Government of U.P. and as such the said notice is unlawful. When we examine the aforesaid argument made on behalf of the petitioner-company in the light of the provisions contained in section 8 and also in the light of the contents of the notice dated 02.09.2021, what we find is that RERA has required the petitioner-company only to submit a proposal in agreement of the Association of Allottees. This notice also requires the petitioner-company to show cause and furnish explanation as to why proceedings under section 8 of the Act, 2016 may not be drawn. No final action as contemplated in section 8 of the Act, 2016 has yet been taken. Action is yet to crystallize and we have no reason to believe that action under section 8 in this case shall precipitate without consultation with the State Government as per requirement of Section 8.
44. Merely because the notice dated 02.09.2021 issued by the RERA to the petitioner-company requires the petitioner-company to submit a proposal for completion of project in agreement with the Association of Allottees will not mean that it is the final decision of RERA for completion of the rest of the work of the project through joint participation of the petitioner-company and the Association of Allottees. In our opinion, the action under section 8 shall finally precipitate only in consultation with the State Government and further, section 8 does not contemplate only one action i.e. carrying out of the remaining work by the Association of Allottees. Section 8 of the Act, 2016 contemplates power and authority of RERA to take action as may be thought fit which may include carrying out of the remaining development work even by the competent authority (Lucknow Development Authority) or by Association of Allottees or in any other manner which may be determined by the RERA.
45. Though in the writ petition no prayer for quashing of the notice issued under section 8 of the Act, 2016, dated 02.09.2021 has been made, however, clause E of the prayer clause of the writ petition contains a prayer for declaring that there is no requirement of approval of allottees in case of lapse/revocation of registration and that the procedure followed by RERA is in violation of the Act, 2016 and Rules framed thereunder. This prayer in our considered opinion is highly misconceived for the reason that by the notice dated 02.09.2021 no approval of the Association of Allottees has been sought to be submitted by RERA. As already stated above, by the notice dated 02.09.2021 the petitioner-company has only been required to submit a joint proposal in agreement with the Association of Allottees for carrying out rest of the development work. Clause 8 of the notice dated 02.09.2021 has to be read as per the provisions of section 8 of the Act, 2016. The said clause in the notice dated 02.09.2021 cannot be read to mean that the RERA has taken a decision for issuing direction to the Association of Allottees to carry out the remaining development works or even to issue direction to carry out the remaining development works jointly by the petitioner-company and the Association of Allottees. Final decision under section 8 of the Act, 2016 is yet to be arrived at.
46. In fact the notice dated 02.09.2021 has been issued only for the purposes of drawing appropriate proceedings under the Act 2016 so that the interest of the allottees as also that of the promoter/petitioner-company may be protected and appropriate measures may be determined by RERA for carrying out the remaining development works. The notice dated 02.09.2021 has to be understood in this perspective alone.
47. It is to be noted further that, in fact, till date no final action under section 8 of the Act, 2016 has precipitated as no decision by RERA has been taken and accordingly we are of the opinion that pursuant to the notice dated 02.09.2021 though the petitioner is said to have already submitted its reply on 09.09.2021, however, the petitioner-company should furnish an additional reply to facilitate the decision/determination to be made by RERA for chalking out action considering the facts and circumstances of the case for completion of remaining development work as contemplated in section 8.
48. We may also clarify that, as already observed above, under section 8 of the Act, 2016 to entrust the remaining development works to the Association of Allottees or jointly to the petitioner-company and Association of Allottees is not the only course which may be ordered by RERA. Section 8 contemplates other courses as well, which may be ordered by RERA, such as directing the competent authority, which in this case is Lucknow Development Authority, to carry out the remaining development works. The RERA is vested with authority to determine the action for completion of remaining development work in any other manner as well.
49. So far as the prayer made by the petitioner-company for issuing a direction to the Lucknow Development Authority and State of Uttar Pradesh for the land related issues is concerned, we may observe that it is always open to the petitioner-company to approach these authorities for resolution of any dispute in terms of the provisions contained in the Development Agreement.
50. In view of the discussion made and reasons given above, the writ petition is finally disposed of with the following directions;
(i) In respect of the notice issued under section 8 of the Act, 2016, dated 02.09.2021, in addition to the reply dated 09.09.2021 already submitted, the petitioner-company is permitted to furnish additional reply to the RERA within three weeks from today whereupon RERA shall consider the reply of the petitioner-company and accordingly, having regard to the facts and circumstances of the case, take appropriate decision in terms of the provisions contained in section 8 of the Act, 2016 and/or in any other provision of law applicable to the subject, in the interest of the allottees as also the promoter.
(ii) For fulfillment of obligations by the Lucknow Development Authority/State Government under the Development Agreement, the petitioner-company may make appropriate application to the competent authority in Lucknow Development Authority and the State Government which shall be considered and appropriate decision thereon shall be taken by the authorities concerned.
51. In the facts of the case, there will be no order as to costs.
Order Date :-30.09.2022 akhilesh/ (Subhash Vidyarthi, J.) (D. K. Upadhyaya, J.)