Madras High Court
Subashini Thulasiram vs M/S.Spr & Rg Constructions Pvt on 15 September, 2020
Bench: N.Kirubakaran, P.Velmurugan
C.M.S.A.No.22 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.09.2020
CORAM :
THE HONOURABLE MR.JUSTICE N.KIRUBAKARAN
and
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
C.M.S.A.No.22 of 2019
Subashini Thulasiram,
W/o.Thulasiram,
Rep. by her Power Agent E.Jayalakshmi,
th rd
W-195, 15 Street, 3 Avenue,
Anna Nagar West Ext., Chennai 101. ... Appellant
Vs
1.M/s.SPR & RG Constructions Pvt., Ltd.,
Rep. By its Directors Hitesh Kumar P.Kawad
& M.Surendranath
Present address:
M/s.SPR & RG Constructions Pvt. Ltd.,
Rep. by its authorised signatory Ragilaj,
No.1, Cooks Road, Perambur, Chennai 12.
2.CMDA, Thalamuthu Natarajan Maaligai,
Gandhi Irwin Road, Egmore, Chennai 8.
3.The Commissioner, Greater Chennai Corporation,
Ripon Building, Chennai.
https://www.mhc.tn.gov.in/judis/
1/49
C.M.S.A.No.22 of 2019
4.State Level Environmental Impact Assessment Authority,
Tamil Nadu,
III Floor, Panagal Maaligai,
No.1, Jeennis Road, Saidapet, Chennai 600 015. … Respondents
(R2 to R4 impleaded vide order of this Court dated 04.10.2019)
PRAYER : Appeal to set aside the order of the Tamil Nadu Real Estate
Appellate Tribunal dated 19.06.2019 made in Appeal 2 of 2019 reversing the
order of the Adjudicating Officer, Tamil Nadu Real Estate Regulatory Authority,
Chennai, made in Sr.No.0002/2018 in unnumbered C.C.P.sr.No.___ of 2018
dated 20.12.2018.
For Appellant :Mr.R.Singgaravelan, Senior counsel
for Mr.Shahul Hameed
For Respondents :Mr.AR.L.Sundaresan (for R1)
Senior counsel
for Mr.E.Sathishkumar
Mrs.Karthikaa Ashok (for R3)
Standing counsel
Mr.J.Pothiraj (for R4)
Special Government Pleader
JUDGMENT
(Judgment of the Court was delivered by N.KIRUBAKARAN, J ) Defrauding of purchasers, https://www.mhc.tn.gov.in/judis/ 2/49 C.M.S.A.No.22 of 2019 Deviation of approved plans, Violation of Rules and Regulations, Non provision of agreed amenities, Provision of inadequate amenities, Substandard construction and Over exploitation of ground water etc., have almost become normal nowadays and most of the developers and promoters are misleading and exploiting the purchasers by their violations and negligence. Unless strict action is taken against these erring developers, we cannot expect orderly development of the town or city. Violations will not only affect the purchasers but also affect the environment. Mostly these erring builders/promoters are having connivance with the policy makers, officials, police force and muscle men and the gullible/innocent purchasers cannot raise their little finger against this kind of syndicate and they have become silent sufferers. The collapse of multi-storied building at “Mugalivakkam village” itself is an infamous example. It would throw light upon how in utter violation of rules and regulation, most of https://www.mhc.tn.gov.in/judis/ 3/49 C.M.S.A.No.22 of 2019 the buildings are being constructed affecting the common man and the planned development of urban areas.
2. Here is one such case before this Court, in which there are allegations of violation of rules and regulations, approved plan and attempt to wriggle out of the new RERA Act by the 1st respondent/promoters.
3.The Appellant has purchased a flat from the 1st respondent and entered into a sale cum construction agreement on 27.11.2012. The property is situated in New Survey Nos. 148/5A, 148/7A, 137/1 and 138/1, Karambakkam Village, Ambattur Taluk, Thiruvallur District. The flat purchased bearing No.9131, 13th floor, Block No.9, measuring about 1592 sq. ft., is part of a multi-storied building project known as “Osian Chlorophyll” and the proportionate undivided share of land is about 418 sq. ft. The total cost of land is Rs.11,49,500/- was paid by the appellant/complainant. A sum of Rs.81,85,380/- was to be paid towards cost of construction. Out of the said amount the complainant already https://www.mhc.tn.gov.in/judis/ 4/49 C.M.S.A.No.22 of 2019 paid a sum of Rs.75,18,367/- and a balance sum of Rs.6,67,013/- is being withheld by the appellant for the reason that the respondent should get appropriate approvals from the authorities. As per the sale cum construction agreement dated 27.11.2012, the possession of the flat is to be handed over within 36 months from 31.03.2012 (i.e.,) on or before 31.03.2015.
4.The first respondent assured that all the approvals for the construction had been obtained and construction would be made in conformity with the approvals. The respondent obtained only planning permission, but the prior environment clearance certificate had not been obtained and the completion certificate was not issued, as the project (Osian Chlorophyll) comes under the definition of “on-going project”. Moreover there are legal proceedings pending before the authorities and the possession of the flat has not been handed over as per the terms of the agreement. The 1st respondent by email dated 15.07.2015 sought for extension of time for handing over possession assuring that the https://www.mhc.tn.gov.in/judis/ 5/49 C.M.S.A.No.22 of 2019 completion certificate would be obtained and thereafter possession would be handed over by 15.12.2015.
5.Inspite of such assurance, no clearance had been obtained in compliance with Section 14 of the Real Estate (Regulation and Development) Act, 2016. Moreover, the respondent has not registered the project as it is coming under the definition of on-going project as defined in Rule 2 (h) of the Tamil Nadu Real Estate (Regulation and Development) Rules 2017. As the construction has not been done after obtaining approvals and the possession has not been handed over as per clause 8 of the sale cum construction agreement, the appellant filed an application before Adjudicating Officer, Tamil Nadu Real Estate Regulatory Authority seeking withdrawal from the project. Infact, after construction was started, the respondent made an application to the State Level Environmental Impact Assessment Authority for environment clearance only on 12.06.2013. Further the respondent was prohibited from making any further https://www.mhc.tn.gov.in/judis/ 6/49 C.M.S.A.No.22 of 2019 construction by the authority and a letter of undertaking/apology from the respondent has been given to that effect.
6.Since the undertaking given by the respondent was violated by making construction and completing the same without environmental clearance, the Tamil Nadu Pollution Control Board filed criminal complaint in CC.No.56/2014 on the file of Judicial Magistrate, Ambattur and the same is pending.
7.Meanwhile there were proceedings with regard to the environmental clearance before the National Green Tribunal, New Delhi in OA.No.37/2015 and OA.No.213/2014. The Tribunal quashed the official memorandum confirming the order of State Level Environmental Impact Assessment Authority de-listing the application for environmental clearance. In view of the above decision, the appellant opted for withdrawing from the project. Hence, the appellant issued lawyers notice demanding money paid by her and reply dated 21.05.2018 was issued by the respondent asking the appellant to take https://www.mhc.tn.gov.in/judis/ 7/49 C.M.S.A.No.22 of 2019 possession of the flat. In the absence of environmental clearance certificate the whole construction has become illegal and therefore, the appellant filed complaint before the Authority seeking direction to the 1st respondent to pay a sum of Rs.20,00,000/- as compensation together with interest at 24% from 31.03.2015 as per Section 18(3), Section 14 for violation of sanctioned plan and approval and Section 19(1) of the Tamil Nadu Real Estate (Regulation & Development) Act 2016 for not providing the information as to the status of the environmental clearance.
8.The said complaint was filed in SR.No.002/18 and preliminary objections regarding maintainability have been raised by the 1st respondent stating that Rule 2(h)(ii) of Tamil Nadu Real Estate ( Regulation and Development ) Rules 2017, excludes those projects in Chennai Metropolitan area for which an application for completion certificate has been filed prior to the date of notification of the Rules. According to them, the project was completed on 03.05.2017 and application for completion certificate with the https://www.mhc.tn.gov.in/judis/ 8/49 C.M.S.A.No.22 of 2019 CMDA was filed on 29.05.2017 and completion certificate was granted by CMDA on 06.09.2018. Hence, the project is a completed project as on the notification of the Rules viz., 22.06.2017 and it would not fall under the ambit of RERA.
9.The Authority after hearing both the parties found that as on the date of commencement of the RERA Act on 01.05.2017, the respondent did not file application for completion certificate to the CMDA and therefore, the project is an on going project and that the respondent has to register under the RERA Act and that the Authority gets jurisdiction over the project, irrespective of the fact that whether it is registered or not. Hence the Adjudicating Officer rejected the preliminary objection and directed the complaint to be registered by order dated 20.12.2018.
10.Aggrieved over the said rejection of the preliminary objection, the respondent filed appeal No.2/19 before the Tamil Nadu Real Estate Appellate https://www.mhc.tn.gov.in/judis/ 9/49 C.M.S.A.No.22 of 2019 Tribunal under Section 44 of the RERA Act. After hearing all the parties the Tribunal raised three points for consideration and held that
1. The environmental clearance is mandatory for 1st respondent's project.
2. Mere procedural violation of the 1st respondent viz., non obtaining of environmental clearance, relieved the 1st respondent's project from the concept of on-going projects, as the Government took penal action for the absence of environmental clearance and granted a clean chit by issuing the certificate on 27.06.2018
3. The construction was completed on 03.05.2017 itself and applied for completion certificate on 29.05.2017 whereas the Tamil Nadu Real Estate Rules came into force on 22.06.2017. Therefore, even before RERA rules came into force, the appellant applied for completion certificate and the delay in issuing the completion certificate may not be the fault of the 1st respondent and the CMDA cannot find fault with the respondent that the construction is not completed or not complied with the approval. Further as per Rule 2(h)(ii) of the Tamil Nadu RERA Rules, there is an https://www.mhc.tn.gov.in/judis/ 10/49 C.M.S.A.No.22 of 2019 exemption for the 1st respondent's project as the respondent completed the project on 03.05.2017 and the first respondent applied for completion certificate on 29.05.2017. Hence, when the rule came into force on 22.06.2017, the project is a completed project and it comes under the exempted category as per the above rules. The project is not an ongoing project and invocation of Sections 71, 79 and 88 of the RERA Act by the Adjudicating Officer is unwarranted and set aside the order and allowed the appeal. Against the said allowing of the appeal only the present Appeal has been filed.
11.Heard Mr.R.Singgaravelan, learned senior counsel appearing for the appellant; Mr.AR.L.Sundaresan, learned senior counsel appearing for the 1st respondent; Mrs.Karthika Ashok, learned counsel appearing on behalf of the 3 rd respondent and Mr.J.Pothiraj, learned Special Government Pleader for the 4th respondent.
https://www.mhc.tn.gov.in/judis/ 11/49 C.M.S.A.No.22 of 2019
12.This Court frames the following substantial questions of law to be decided in the appeal:
(1)Whether the appellate authority right in holding that the project was completed as early as on 03.05.2017 and the project would not be ongoing project as there is an exemption under Rule 2(h)(ii) of the Tamil Nadu Real Estate (Regulation and Development) Rules which came into force on 22.06.2017? (2)Whether the Appellate Authority's finding that the construction was completed on 03.05.2017 especially when the RERA Act came into force on 01.05.2017 is not perverse?
(3)Whether the Tamil Nadu Real Estate (Regulation and Development)Rules which came into force on 22.06.2017 and inconsistent with the RERA Act could give exemption to the respondent’s project under the definition of on-going project?
Though three substantial questions of law are there, all would raise the same point whether the 1st respondent's project could be called as ongoing project or otherwise and the exemption under Rule 2(h)(ii) could be given. All the learned counsels argued on the above questions of law.
https://www.mhc.tn.gov.in/judis/ 12/49 C.M.S.A.No.22 of 2019
13.Mr.R.Singgaravelan, learned senior counsel appearing on behalf of the appellant would submit that the project cannot be called as a “completed project”, in the absence of the environmental clearance certificate from the appropriate authorities which was obtained only on 27.06.2018 much after the act came into force viz., on 01.05.2017; The Tamil Nadu RERA Rules cannot over reach the main Act and the Act alone would prevail over the Rules; As per Section 3 of the Act, prior registration of Real Estate Project is not necessary if the promoter has received the completion certificate prior to the commencement of the Act whereas Rule 2(h)(ii) gives exemption for ongoing project, if developer has applied for the completion certificate; The said Rule is contrary to or in violation of the parent act under Section 3. Therefore, the contention of the first respondent which has been accepted by the Tribunal that Rule 2(h)(ii) of the Rules giving exemption from terming the project as ongoing project as the promoter has applied for completion certificate as early as on 29.05.2017 after completing the construction on 03.05.2017, is perverse and has to be set https://www.mhc.tn.gov.in/judis/ 13/49 C.M.S.A.No.22 of 2019 aside. Secondly, he would submit that in the absence of environmental clearance certificate, the construction itself should not have been commenced. When such is the position, the Tribunal committed an error in accepting the contention of the respondent’s case that the respondent completed the project as early as on 03.05.2017 and applied for completion certificate 29.05.2017 and got the completion certificate on 06.09.2018. In fact, the environmental clearance certificate was only obtained on 27.06.2018. Hence the entire construction is illegal.
14.In view of the above contentions, Mr.R.Singgaravelan would also submit that the project cannot be called as “completed project” and it would come under the definition of “ongoing project” as per rule 2(h)(ii) of Tamil Nadu RERA Rules, 2017. Hence, the complaint filed by the appellant before the authority is maintainable; The well-considered order of the authority should not have been set aside by the appellate authority giving erroneous reasons. Hence, he seeks for allowing of the Appeal.
https://www.mhc.tn.gov.in/judis/ 14/49 C.M.S.A.No.22 of 2019
15.However, Mr.AR.L.Sundaresan, learned senior counsel appearing on behalf of the 1st respondent would submit that the Tribunal rightly came to the conclusion that the construction was over on 03.05.2017 and the 1st respondent applied for completion certificate on 29.05.2017. Hence, Rule 2(h)(ii) of the Tamil Nadu RERA Rules gives exemption to the 1st respondent’s project from terming it as “On-going project”. Therefore, the Tribunal was right in allowing the appeal.
16.The first respondent would further submit that there is no complaint by the authorities that the construction has been done in violation of any of the approvals; For non-obtaining of environmental clearance certificate that the 1st respondent has been proceeded with by filing criminal complaint by the Tamil Nadu Pollution Control Board before Judicial Magistrate Court, Ambattur and that was taken note of by the competent authority; The issue of environmental clearance certificate is only a procedural violation committed by the respondent https://www.mhc.tn.gov.in/judis/ 15/49 C.M.S.A.No.22 of 2019 for which criminal actions has already been taken; The Government after new notification absolved the defects of the 1st respondent and granted a clean chit and granted environmental clearance certificate which itself would ratify the acts done by the 1st respondent; Only after due compliance, environmental clearance certificate was issued; Moreover, the appellant's sister had already taken possession and the appellant was also offered possession after completion of construction on 03.05.2017 and therefore, the project cannot be deemed to be an ongoing project. Hence he would seek dismissal of the appeal.
17.There is no dispute with regard to entering into sale cum construction agreement dated 27.11.2012 for the purchase of a flat measuring to an extent of 1592 sq. ft. with undivided share of land 418 sq. ft. and payment of Rs.11,49,500/- and Rs.75,18,367/-, except the balance of Rs.6,67,013/- to be paid by the appellant. The flat was supposed to be handed over within 36 months from 31.03.2012 (i.e.,) on or before 31.03.2015. https://www.mhc.tn.gov.in/judis/ 16/49 C.M.S.A.No.22 of 2019
18.The main contention of the appellant is that though the first respondent promised that the construction would be made after getting appropriate approvals and clearances from the appropriate authorities, there was no environmental clearance certificate obtained by the respondent. In the absence of any environmental clearance from the appropriate authorities and non-obtaining of completion certificate from CMDA, the project should be held as ongoing project and therefore, the 1st respondent has to apply under the RERA Act and get registered and the appellant is entitled to maintain the application for compensation before the Adjudicating Officer invoking the provisions of the Act.
19.To understand the issue involved in this case, it is appropriate to note the following facts.
(i) The RERA Act came into force on 01.05.2017.
(ii)The Tamil Nadu Real Estate (Regulation & Development) Rules came into force on 22.06.2017.
(iii)According to the 1st respondent, the project was completed on 03.05.2017.
https://www.mhc.tn.gov.in/judis/ 17/49 C.M.S.A.No.22 of 2019
(iv)The first respondent applied for completion certificate on 29.05.2017.
(v)Environmental clearance certificate was obtained on 27.06.2018.
(vi)Completion Certificate from CMDA was obtained on 06.09.2018. The above material dates are very important to decide the issue involved viz., whether the 1st respondent's project is an on-going project or not.
20.The object of RERA Act is stated as follows:
“An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto.” Since many Promoters and developers have been illegally indulging in unethical practices, the consumers are put to unnecessary harassment, apart from lack of transparency involving the transaction, the Act has been passed. https://www.mhc.tn.gov.in/judis/ 18/49 C.M.S.A.No.22 of 2019 Section 2(q) of the Act speaks about “completion certificate” which is extracted as follows:
“(q)“completion certificate” means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;” Section 3 of the Act gives the details about the prior registration of Real Estate Project with Real Estate Regulatory Authority and is extracted as follows:
“Section 3: Prior registration of real estate project with Real Estate Regulatory Authority.
(1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the https://www.mhc.tn.gov.in/judis/ 19/49 C.M.S.A.No.22 of 2019 real estate project with the Real Estate Regulatory Authority established under this Act:
Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act:
Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration.
(2) Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required
(a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases:
https://www.mhc.tn.gov.in/judis/ 20/49 C.M.S.A.No.22 of 2019 Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act;
(b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act;
(c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project.” From the above it is very clear that prior registration is the rule and exemption is given in Section 3(2) and three circumstances under which no registration is necessary. Section 3(2)(b) of the Act is relevant for the purpose of this case viz., when the promoter has received completion certificate for a real estate project prior to the commencement of the Act, then there is no necessity for the promoter to get registration of the real estate project with the Real Estate Regulatory Authority. The Act came into force on 01.05.2017.
https://www.mhc.tn.gov.in/judis/ 21/49 C.M.S.A.No.22 of 2019 Therefore, to get exemption from registration invoking Section 3(2)(b) of the Act, the promoter should have received the completion certificate as on 01.05.2017.
21.In this case, the 1st respondent applied for completion certificate on 29.05.2017 only, whereas the Act came into force much before on 01.05.2017. If the respondent had already applied and obtained completion certificate as on 01.05.2017, there is no necessity for the 1st respondent to get the project registered with the Authority. However, the facts would reveal that the respondent applied only on 29.05.2017 and obtained the certificate on 06.09.2018. Hence, the respondent's contentions that his project is a completed project and the 1st respondent need not register under the Act are liable to be rejected.
22.The only contention of the 1st respondent is that as per rule 2 (h) (ii) of the Tamil Nadu RERA Rules 2017, which has come into force on 22.06.2017 an https://www.mhc.tn.gov.in/judis/ 22/49 C.M.S.A.No.22 of 2019 exemption is given and the 1st respondent's project cannot be called as an ongoing project. Rule 2(h)(ii) of the Tamil Nadu RERA Rules 2017 is extracted as follows:
“(ii)the projects in Chennai Metropolitan Area for which application for completion certificate has been filed with Chennai Metropolitan Development Authority subject to furnishing certificate from the architect/licensed surveyor/structural engineer associated with the project to the effect that all the buildings in the projects have been structurally completed i.e., all the columns, beams and slabs have been erected, supported with photographs. Chennai Metropolitan Development Authority will issue, completion certificate for those projects in compliance with Completion Certificate norms prescribed. In Completion Certificate filed cases, if the Completion Certificate is rejected by Chennai Metropolitan Development Authority for violation of norms, such projects will be intimated to the Real Estate Regulator Authority and will be bound for registration with Real Estate Regulatory Authority. The details of all projects where Completion Certificate application has been filed with Chennai Metropolitan Development Authority prior to notification of these https://www.mhc.tn.gov.in/judis/ 23/49 C.M.S.A.No.22 of 2019 rules will be disclosed to the public by publishing the list of all such projects on the website of Chennai Mentropolitan Development Authority and Real Estate Regulatory Authority immediately after notification of these rules. ”
23.A reading of the above rule would reveal that as on commencement of the Act, if the completion certificate is applied for the project in Chennai Metropolitan Area, it cannot be called as ongoing project and there is no necessity for Registration under the Act. As explained above the Act came into force on 01.05.2017 whereas the 1st respondent applied for completion certificate on 29.05.2017. Therefore, even Rule 2(h)(ii) of the Tamil Nadu RERA Rules 2017, does not come to the aid of the respondent. The exemption has been given only for those who have already applied or unable to get the completion certificate in view of the administrative or so many reasons attributable to the authorities. The said exemption is sought to be employed wrongly by the 1st respondent and the same has been accepted by the Tribunal erroneously.
https://www.mhc.tn.gov.in/judis/ 24/49 C.M.S.A.No.22 of 2019
24.As rightly pointed out by the learned senior counsel appearing on behalf of the appellant, it is well settled law that the parent Act will prevail over the rules and there cannot be any rules contrary to Act. Assuming that Rule 2(h)(ii) gives some relief to the 1st respondent, it is in contrary to Section 3 of the Act. When the Act has come into force on 01.05.2017, the first respondent should have complied with. The principle that the subordinate legislation cannot be in violation of the Act is supported by following decisions of the Apex Court:
1.Ramesh Mehta Vs. Sanwal Chand Singhvi reported in 2004 (5) SCC 409.
2.Global Energy Ltd., Vs. Central Electricity Regulation Commission reported in (2009) 15 SCC 570.
The State Government Rule 2(h)(ii) is contrary to Section 3 of the Act and therefore the first respondent cannot take advantage of the same and claim exemption from registration.
https://www.mhc.tn.gov.in/judis/ 25/49 C.M.S.A.No.22 of 2019
25.The Tribunal relied upon definition of “completion certificate” as “ongoing project” has not been defined in the Act. The “completion certificate” provision is extracted as follows:
“Section 3(2)(b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act” Even the completion certificate could be issued only when the Real Estate Project has been developed according to the sanctioned plan, layout plan, specifications as approved by the competent authority. Assuming that the 1st respondent completed the project allegedly on 03.05.2017 and applied for completion certificate on 29.05.2017, whether that application for completion certificate can be deemed to be a proper complete application for getting completion certificate is to be seen. Application for completion certificate should give the details as to how the construction has been made as per sanctioned plan, lay out plan and specifications as approved by the competent authority whereas it is admitted by the 1st respondent themselves that environmental clearance certificate was only obtained on 27.06.2018 proving that the application for completion certificate itself is incomplete and improper. It is clear that based on incomplete and improper application, environmental https://www.mhc.tn.gov.in/judis/ 26/49 C.M.S.A.No.22 of 2019 clearance certificate has been obtained by the 1st respondent "somehow" and hence environmental clearance itself is invalid.
26.The importance of environmental clearance certificate could be understood by reading the Central Government notification and further clarification dated 14.09.2006 which speaks about necessity to obtain environmental clearance certificate before commencement of any new project which reads as follows:
“Published in the Gazette of India, Extraordinary, Part-II and Section-3, sub section (ii), Ministry of Environment, Forests, New Delhi – Notification dated 14th September, 2006. S.O.1533 whereas, a draft notification under sub-rule (3) of rule 5 of the Environment (Protection) Rules, 1986 for imposing certain restrictions and prohibitions on new projects or activities, or on the expansion or modernization of existing projects or activities based on their potential environmental impacts as indicated in the Schedule to the notification, being undertaken in any part of India, unless prior environmental clearance has been accorded in https://www.mhc.tn.gov.in/judis/ 27/49 C.M.S.A.No.22 of 2019 accordance with the objectives of National Environment Policy as approved by the Union Cabinet on 18th May, 2006 and the procedure specified in the notification, by the Central Government or the State or Union territory level Environment Impact Assessment Authority (SEIAA), to be constituted by the Central Government in consultation with the State Government or the Union Territory Administration concerned under sub-section (3) of section3 of the environment (Protection) Act, 1986 for the purpose of this notification, was published in the Gazette of India, Extraordinary, part II, section 3, sub-section (ii) vide number S.O.1324(e) dated the 15th September 2005 inviting objections and suggestions from all persons likely to be affected thereby within a period of sixty days from the date on which copies of Gazette containing the said notification were made available to the public.” In the above said notification further clarification in page no.6 which is as follows:
“2. Requirement of prior environmental clearance: The following projects or activities shall require prior environmental clearance from the concerned regulatory authority which shall hereinafter referred to be as the Central Government in the Ministry of https://www.mhc.tn.gov.in/judis/ 28/49 C.M.S.A.No.22 of 2019 Environment and Forests for matters falling under category 'A' in the schedule and at State level the State Environment Impact Assessment Authority (SEIAA) for matters falling under category 'B' in the said schedule, before any construction work or preparation of land by the project management except for securing the land, is started on the project or activity:
i. All new projects or activities listed in the schedule to this notification;
2.Expansion and modernization of existing projects listed in the schedule to this notification with addition of capacity beyond the limits specified for the concerned sector, that is, projects or activities which cross the threshold limits given in the schedule, after expansion or modernization;
3.Any change in product – mix in an existing manufacturing unit included in schedule beyond the specified range.” The above notification prohibits any new project without getting clearance from the appropriate Authorities. It is stated by the 1st respondent that the 1st respondent applied for environmental clearance certificate on 28.01.2011. It is evident from environmental clearance letter issued by Member Secretary https://www.mhc.tn.gov.in/judis/ 29/49 C.M.S.A.No.22 of 2019 SEIAA – Tamil Nadu dated 27.06.2018 that 1st respondent admitted the construction activities have already been started without obtaining mandatory prior environmental clearance certificate from the competent authorities. The said paragraph 6 in sub para (ii) of the letter as relied upon by the Appellate Tribunal in paragraph 11 is extracted as follows:
“The project proponent in his letter dated 1.7.2013 furnished the letter of apology / commitment duly resolved by the Board of Directors for the violation of EIA Notification, 2006, as the construction activities have already been started without obtaining the mandatory prior environmental clearance from the competent authority received by SEIAA-TN on 13.7.2013. The letter of apology furnished by the project proponent was forwarded to Government of Tamil Nadu, Environment & Forest Department to initiate credible action against violation committed by project proponent in this office letter No.SEIAA-TN/F.433/2011 dated 19.7.2013.” https://www.mhc.tn.gov.in/judis/ 30/49 C.M.S.A.No.22 of 2019 Admittedly, when the construction was started, there was no mandatory prior environmental clearance obtained by the respondent from the competent authority.
27.The non-obtaining of prior environmental clearance and obtaining of clearances only on 27.06.2018 after the completion of the project on 03.05.2017 as contended by the first respondent, would definitely make the first respondent's application for completion certificate made on 29.05.2017 as incomplete certificate. In the eye of law, it cannot be called as a complete application for completion certificate in order. Therefore, the reliance of the 1st respondent on application dated 29.05.2017, for completion certificate loses its ground, even though the respondent is supported by Rule 2 (h) of Tamil Nadu RERA Rules.
28.The Tribunal committed a grave error in observing that the procedural violation of the 1st respondent is only with regard to the commencement of https://www.mhc.tn.gov.in/judis/ 31/49 C.M.S.A.No.22 of 2019 construction during pendency of the application for environmental clearance certificate and the same is liable to be set aside. When the environmental clearance certificate is mandatory as per the above notification dated 14.09.2006, it cannot be called procedural violation and the violation goes to the root of the matter which makes the entire construction as illegal. Obtaining of post facto clearance would not legalize the construction of the 1 st respondent. The very purpose of obtaining of environmental clearance certificate is to see that the construction does not cause any environmental disturbance. The very fact of obtaining environmental clearance certificate on 27.06.2018 after the construction was over on 03.05.2017, which has been referred to in the clearance certificate itself, would speak volumes about the manner in which the authority has given the certificate. The environmental authorities are not established to give post facto certificate and the duty of the authority is to see that the proposed construction would cause any disturbance or any environmental damage would be caused. There is no justification for the authorities in giving environmental clearance certificate which is required to be https://www.mhc.tn.gov.in/judis/ 32/49 C.M.S.A.No.22 of 2019 obtained before the commencement of construction, when the construction was over. It is like playing of music which is supposed to be done during the marriage is conducted, after the marriage was over. There is a failure on the part of State Level Environmental Impact Assessment Authority in giving the certificate.
29.Merely because the authorities have initiated criminal proceedings for failure to obtain mandatory environmental clearance certificate from the competent authority by filing criminal case before Judicial Magistrate Court, Ambattur could not condone non obtaining of environmental clearance certificate.
30.The authority relied upon the apology letter given on 01.07.2013 by the 1st respondent for violation of EIA notification, 2006, that apology cannot in any way be relied upon to give the post facto environmental clearance certificate. Having given a finding in paragraph 12 of the impugned order that https://www.mhc.tn.gov.in/judis/ 33/49 C.M.S.A.No.22 of 2019 there is a clear violation of EIA notification, 2006 by the 1st respondent, the Tribunal ought not have found that it is only procedural violation with regard to the commencement of construction, pending environmental clearance. Therefore, the findings given by the Tribunal that environmental clearance certificate ratifying the actions of 1st respondent are set aside.
31.Merely because the appellant’s sister took possession the property and occupied the flat and the appellant was offered flat to take possession, it will not absolve the respondent’s responsibilities and duties cast upon it as a developer to develop the property as per law after getting approvals and clearances. The observation/finding of the Tribunal that issuing of environmental clearance certificate after initiating penal action for procedural violation amounts to leaving the 1st respondent project from the concept of 'ongoing project' is contrary to law. The completion of the project on 03.05.2017 allegedly admitted by the appellant in any way would not support the respondent’s case as https://www.mhc.tn.gov.in/judis/ 34/49 C.M.S.A.No.22 of 2019 even on 03.05.2017, there was no clearance. In the absence of environmental clearance, the whole construction would become illegal.
32.The Tribunal relied upon the statement of the appellant that appellant’s sister had occupied the flat and the appellant admitted the completion of construction on 03.05.2017, and all these actions were done even before applying for completion certificate. Without obtaining completion certificate, the 1st respondent cannot offer or put the purchasers into possession of the property. Therefore, the said observations of the Tribunal are liable to be set aside. The findings of the Tribunal that the 1st respondent completed real estate project and applied for completion certificate before commencement of the Rules on 22.06.2017 and in conformity with the Section 2(z)(n) of the RERA Act have to be set aside for the simple reason that Rule 2(h)(ii) should be employed only by those developers who applied for completion certificate on the date of commencement of the Act on 01.05.2017 whereas the first https://www.mhc.tn.gov.in/judis/ 35/49 C.M.S.A.No.22 of 2019 respondent applied for completion certificate on 29.05.2017 after the Act came into force.
33.It is also brought to the notice of this Court by Mr.R.Singgaravelan the learned senior counsel appearing on behalf of the appellant that after obtaining environmental clearance certificate dated 27.06.2018, an application for revised completion certificate has been applied on 23.07.2018 and thereafter revised completion certificate has been issued on 06.09.2018. He would point out that as per the original planning permission dated 20.07.2012, 950 dwelling units were permitted to be constructed. The said construction was alleged to have been completed on 03.05.2017. However, thereafter first respondent applied for revised approval plan on 20.07.2018 for dwelling units of 1050 and revised plan was also given on the same day viz., 20.07.2018. According to him, without the knowledge of the purchasers and contrary to the planning permission dated 20.07.2012 issued by CMDA and building permission dated 20.07.2012 issued by Corporation of Chennai, violating the rights of the purchasers. https://www.mhc.tn.gov.in/judis/ 36/49 C.M.S.A.No.22 of 2019
34.However, the learned senior counsel appearing on behalf of the respondent would submit that the application for revised plan has been applied and thereafter only a revised completion certificate was obtained and application for revised completion certificate was submitted on 23.07.2018 and completion certificate was obtained on 06.09.2018. Therefore, everything has been done according to law.
35.It is seen from the records especially application for revised completion certificate dated 23.07.2018 filed by the respondent, it is stated planning permission for the construction of 950 dwelling units was obtained on 20.07.2012. Once the plan has been approved and the building permit was given for construction of 950 dwelling units and sale cum construction agreement was entered into between the 1st respondent and the purchasers, the 1st respondent cannot unilaterally without notice to the purchasers increase the dwelling units from 950 to 1050. It would certainly violate the rights of every https://www.mhc.tn.gov.in/judis/ 37/49 C.M.S.A.No.22 of 2019 purchaser as undivided share in the land would get reduced by increasing the dwelling units from 950 to 1050. The said action is illegal. Moreover even as per the averments of the 1st respondent, the building was completed in all aspects as on 03.05.2017 and they themselves applied for completion certificate on 29.05.2017.
36.The letter dated 23.07.2018 is extracted in its entirety:
“We had obtained planning permission for the above construction vide reference-1 cited above for an FSI area of 1,16,382.00 Sqm with 950 dwelling units and building permit from greater Chennai corporation vide reference-2 cited above:
Subsequently we had applied for revised planning permission vide reference-3 cited above with a lesser FSI area of 1,13,465.26 Sqm but increase in no. of dwelling units to 1050. The DC advice was issued in letter no.C3(N)10839/2014 dated 09-09-2016. Even though the construction of building as per the revised plan was completed in all respects prior to 31-05-2017 for 1050 dwelling units, we had applied for completion certificate for 950 dwelling units as per the earlier approved plan on 31-05-2017. https://www.mhc.tn.gov.in/judis/ 38/49 C.M.S.A.No.22 of 2019 Now we have obtained planning permission for the revised plan vide reference-4 cited above and request you to issue completion certificate for 1050 dwelling units as per the revised approval” It is also clear from the above letter, that the 1st respondent applied only for completion certificate on 30.05.2017 and they have not applied for revised planning permission as falsely stated by them in that letter. Though they referred in the reference item No.3 as completion certificate in application dated 30.05.2017, they deliberately and mischievously in the body of the letter stated that they applied for planning permission vide reference No.3 cited. It would go to show that there is no application for revised planning permission at all.
37.In the same letter, the revised planning permission is said to have been obtained on 20.07.2018, especially when the entire construction was completed as on 03.05.2017. There is no question of getting a revised planning permission on 20.07.2018, especially when the construction itself admittedly was over on 03.05.2017.
https://www.mhc.tn.gov.in/judis/ 39/49 C.M.S.A.No.22 of 2019
38.The appellant filed a copy of the revised planning permission dated 20.07.2018 wherein it is stated in reference No.24 as the respondent’s application dated 19.07.2018. Therefore, it is evident that the 1 st respondent applied for revised approved plan only on 19.07.2018. On the very next day, they obtained revised plan on 20.07.2018. This also would go to prove connivance between the CMDA and the developer. It is not known as to how without making spot inspection, revised plan has been given.
39.When the application for revised approved plan was filed on 19.07.2018 as evident from the CMDA revised approval dated 20.07.2018, it is not known as to how in paragraph 3 of the letter dated 23.07.2018, the 1st respondent stated that construction of the building as per the revised plan was completed in all aspects prior to 31.05.2017 for 1050 dwelling units.
40.Assuming for a moment that the 1st respondent completed construction of 1050 dwelling units prior to 31.05.2017, the application dated https://www.mhc.tn.gov.in/judis/ 40/49 C.M.S.A.No.22 of 2019 29.05.2017 for completion certificate made by the 1st respondent is false. If really 1050 dwelling units were completed, contrary to the plan, the 1st respondent cannot apply for completion certificate stating that the 1st respondent completed the construction as per the approved plan. Therefore, the original application dated 29.05.2017 for completion certificate cannot be called as an proper application for completion certificate as it contains false informations that they completed the construction as per the original planning permission which authorized the 1st respondent to construct only 950 dwelling units.
41.The above facts would also show that there is no regular inspection by the CMDA or Corporation officials while the construction is going on to verify as to whether the construction is made as per the planning permission and building permit. The concerned officials who are responsible have to be proceeded with. Therefore, the details given in the original application for completion certificate dated 29.05.2017 are false and action has to be taken against the developer for cheating the original purchasers as well as try to https://www.mhc.tn.gov.in/judis/ 41/49 C.M.S.A.No.22 of 2019 mislead the authorities by giving false documents as stated in letter dated 29.05.2017 which are as follows:
“1) Completion certificate application in the prescribed format (Part I, Part II, Part III).
2) Declaration by the applicant and Architect in the prescribed format.
3) Attested copy of the following
a) CMDA approved plan and letter attested
b) Planning permit issued by CMDA
c) Building permit issued by local body
d) Receipt of remittance towards Infra Structure and Amenities charges
e) Receipt of remittance towards security deposit
4) As on site plan
5) Photographs of the building
6) Form of Supervision – CC1
7) Form of Completion Certificate – CC2
8) Form for Undertaking by Architect – CC3
9) DF & RS Fire Compliance Certificate
10) Change of Architect Letter https://www.mhc.tn.gov.in/judis/ 42/49 C.M.S.A.No.22 of 2019
11) Change in Structural Consultant Letter
12) OSR & ROAD Gift Deed Documents.
13) Structural Stability Certificate.”
42.Though the original authority passed orders regarding maintainability of the complaint filed by the appellant holding that the complaint is maintainable, the Regulatory Authority on Appeal by the 1st respondent went into finer details giving finding with regard to the merits of the case. Therefore, this Court is compelled to go into the issue and reverse the judgment of the Tribunal, giving positive finding in favour of the appellant.
43.Therefore, the substantial questions of law are answered in favour of the appellant and against the respondent and the order of the Tribunal is set aside holding that
(i) As on the date of the commencement of the Act on 01.05.2017, the 1st respondent has not applied for completion certificate and therefore, the 1st respondent project is an ongoing project".
https://www.mhc.tn.gov.in/judis/ 43/49 C.M.S.A.No.22 of 2019
(ii) The respondent cannot take shelter under Rule 2(h)(ii) of the Tamil Nadu RERA Rules stating that the 1st respondent has applied for completion certificate on 29.05.2017 as Rule give an exemption only to the developers who applied for completion certificate on or before 01.05.2017.
(iii) According to the 1st respondent the entire project was completed on 03.05.2017 whereas the 1st respondent applied for completion certificate on 29.05.2017.
(iv) After completion of the project on 03.05.2017, the 1st respondent applied for revised approval plan on 20.07.2018 for dwelling units of 1050, altering the original dwelling units of 950 and revised plan was obtained on the very same day on 20.07.2018.
(v) After completion of the entire project, Environmental Clearance Certificate was obtained on 27.06.2018 only as a formality.
(vi) Admittedly there is no environmental clearance certificate obtained before commencement of construction of project by the 1st respondent as stated in the environmental clearance certificate itself.
https://www.mhc.tn.gov.in/judis/ 44/49 C.M.S.A.No.22 of 2019
(vii) The application for completion certificate without environmental clearance certificate is a defective application and in the eye of law, it cannot be called as an application for completion certificate.
(viii) The State Level Environmental Impact Assessment Authority cannot issue post facto environmental clearance certificate, inspite of the admission made by the 1st respondent in their letter of apology/commitment dated 01.07.2013 that is violating EIA notification, 2006. The construction activities have already been started without mandatory prior environmental clearance from the competent authority.
44.Therefore, the following directions are issued:
(a) The authority is directed to number the appeal within a period of one week from the date of receipt of a copy of this order.
(b) The first respondent is directed to file their counter within a period of two weeks thereafter.
https://www.mhc.tn.gov.in/judis/ 45/49 C.M.S.A.No.22 of 2019
(c) The authority shall decide the matter after giving opportunity to both the parties within a period of eight weeks thereafter.
(d) After the complaint is disposed by the authority and if any appeal is filed against the order of the authority, the Appellate Tribunal shall dispose of the appeal after giving opportunity to all the parties within a period of twelve weeks from the date of entertaining the appeal.
45.In fine, the Appeal is allowed. No costs.
(N.K.K.,J) (P.V.,J)
15.09.2020
sai
Index : Yes / No
Internet : Yes / No
To
1.CMDA, Greater Chennai Corporation, Chennai.
2.State Level Environmental Impact Assessment Authority, Tamil Nadu, III Floor, Panagal Maaligai, No.1, Jeennis Road, Saidapet, Chennai 600 015.
https://www.mhc.tn.gov.in/judis/ 46/49 C.M.S.A.No.22 of 2019 N.KIRUBAKARAN, J.
and P.VELMURUGAN, J.
sai C.M.S.A.No.22 of 2019 Dated :15.09.2020 https://www.mhc.tn.gov.in/judis/ 47/49 C.M.S.A.No.22 of 2019 C.M.S.A. No. 22 of 2019 and C.M.P. No. 18160 of 2019 N.KIRUBAKARAN,J.
AND P.VELMURUGAN,J.
(Order of the Court was made by N.KIRUBAKARAN,J.) The matter is posted under the caption 'For Being Mentioned' at the instance of the Learned Counsel appearing for the First Respondent.
2. Heard Mr.AR.L.Sundaresan, Learned Counsel appearing for the First Respondent. Though the Learned Counsel for the Appellant is not present, since the matter has been posted only to clarify the order passed by this Court, this Court makes the following clarification.
3.It is made clear that observations made by this Court in the judgment dated 15.09.2020 will not preclude the authorities from deciding the matter on merits, without getting influenced by the observations made therein. Accordingly, it is clarified.
https://www.mhc.tn.gov.in/judis/ 48/49 C.M.S.A.No.22 of 2019 [N.K.K., J.] [P.V., J.] 19.08.2021 Maya/ay https://www.mhc.tn.gov.in/judis/ 49/49