The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted with the objective of promoting transparency, accountability, and efficiency within the real estate sector. One of its key features is the appointment of an Adjudicating Officer.
The Adjudicating Officer has been vested with the primary role of adjudicating compute compensation payable to allottees on complaints against defaulting promoters and enforcing orders of the Authority. However, the authority and powers vested in the Adjudicating Officer under RERA raise important questions, especially when it comes to the enforcement of orders and penalties against judgement debtors who fail to comply with orders of the Authority.
Understanding the Adjudicating Officer’s Jurisdiction
The Adjudicating Officer in RERA is a judicial authority, typically a retired district judge, appointed to adjudicate compensation claims arising from violations of RERA’s provisions. Their jurisdiction is specifically defined under Section 71 of the Act, which outlines their role in determining compensation for aggrieved parties.
It’s important to note that the Adjudicating Officer’s powers are distinct and separate from those of the RERA Authority, which primarily focuses on regulatory functions.
According to Section 71 of the Real Estate (Regulation and Development) Act, 2016, the Adjudicating Officer is empowered to adjudicate compensation claims under Sections 12, 14, 18, and 19 of the Act. These sections primarily deal with issues such as delays in project delivery, quality discrepancies and violations by builders. The Adjudicating Officer conducts inquiries and determines compensation based on the findings.
The Adjudicating Officer has the authority to summon and enforce the attendance of any person known to the facts and circumstances of the case to give evidence or to produce any document which may be useful for or relevant to the subject matter of the inquiry.
However, the Adjudicating Officer’s jurisdiction is limited to adjudicating compensation claims and does not extend to other regulatory functions. For instance, the Supreme Court has held that when it comes to a refund of the amount, and interest on the refund amount, or directing payment of interest for delayed delivery of possession, or penalty and interest thereon, it is the regulatory authority which has the power to examine and determine the outcome of a complaint.
Powers of the Adjudicating Officer
The power of the Adjudicating Officer in RERA is comprehensive but is primarily focused on the adjudication and enforcement of compensation-related matters.
- Adjudication of Compensation: The Adjudicating Officer is entrusted with the responsibility of determining the compensation that should be awarded to the party aggrieved by violations of RERA. These violations may range from delays in project completion to the delivery of defective goods.
The officer has the authority to examine the facts of each case and award compensation, which could include the recovery of amounts paid, damages, or other remedies in accordance with the provisions of the Act. (indialegalnews.com)
- Enforcement of Orders: One of the critical roles of the Adjudicating Officer in RERA is ensuring compliance with the orders issued. While the Officers may not have the authority to enforce criminal penalties, they can enforce civil penalties.
For instance, if a promoter or builder fails to comply with an order to pay compensation, the Adjudicating Officer can take legal steps to ensure payment.
Can the Adjudicating Officer Issue Arrest Warrants?
A major question that is doing circles in the legal fraternity is whether the AO possess the authority to issue arrest warrants against judgement debtors who fail to comply with compensation orders.
The AO has been conferred with powers of collector recently by the Government of Haryana vide a special notification issued to this effect bearing no 50/15/2024-5S (1) dated 11.05.2024.
Now the requirement of issuance of recovery certificates by the AO and transferring them to the concerned collector offices for recovery under the Haryana Land Revenue Act is no longer required as the AO is acting as a collector for the purposes of the RERA Act.
Since the recovery is to be made against the promoters as arrears of land revenue, therefore, the provisions of the Haryana Land Revenue Act become material for the purposes of this study.
The AO in its executory role is issuing warrants of arrest against the non-compliant builders against whom the Authority has passed orders of either refund, DPC or compensation. The AO has even issued warrants of arrest on the failure of the builders to furnish proper affidavits of assets for satisfaction of money orders passed by the Authority and AO in compensation cases. It is pertinent to mention that the AO has been issuing such orders under the provisions of the C.P.C. under order 21 Rule 41(3). There are orders wherein the AO has even appointed a bailiff to execute the orders of arrest and attachment.
The dilemma lies here, it is to be analyzed that when the AO is exercising his powers as a collector to recover the dues as per order in the form of arrears of land revenue, would he be bound by the provisions of the Haryana Land Revenue Act? If so, then the AO could not have travelled beyond the provisions of the Act and issued warrants of arrest under the Civil Procedure Code for execution of the orders of the Authority and the AO would have to resort to section 67 of the Haryana Land Revenue Act 1887. Further, it would mean that the AO cannot call for an affidavit from the promoters to declare their assets for satisfaction of decretal amounts against them. The AO for the purposes of attaching would have to resort to section 72 of the Haryana Land Revenue Act.
To appreciate this legal nuance, a perusal of section 40 the RERA would be relevant.
40. Recovery of interest or penalty or compensation and enforcement of order, etc
”If a promoter or an allottee or a real estate agent, as the case may be, fails to pay any interest or penalty or compensation imposed on him, by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder, it shall be recoverable from such promoter or allottee or real estate agent, in such manner as may be prescribed as arrears of land revenue. [1]
Thaton the other hand is drawing power to issue such warrants by virtue of Sub-Rule 1 to Rule 27 of the Real Estate (Regulation and Development) Rules, 2017. The sub-rule provides that in execution of any order passed by Authority or by the AO himself, he may execute it in the manner as if it were a decree or an order made by a civil court.”
The conundrum lies herein. Section 40 prescribes the method of recovery and for this purpose the AO is subsequently conferred with powers of Collector under the Haryana Land Revenue Act while on the other hand, the rules to the Act provide for the AO to treat the order of the Authority as if it were a decree of civil court in a suit pending before it.
That being aggrieved by the acts of the AO, for adhering to provisions of Haryana Land Revenue Act to comply with section 40 of the Act, and its order wherein it travels beyond the Haryana Land Revenue Act an issue warrant of arrest against non-compliant promoters under Civil Procedure Code, A developer “International Land Developers Pvt Ltd. Vs Aditi Chauhan & Ors” has moved a Civil Writ Petition before the Hon’ble Punjab and Haryana High Court. The High Court has directed the State Government to make appropriate amendments to the rules to bring it in line with the Act.
This situation opens a pandora box of confusion. For instance, it would need clarity as to which body would be the appellate body to the AO in executions
1. The Commissioner Land Revenue Officer appointed the Haryana Land Revenue Act or,
2. the Haryana Real Estate Appellate Tribunal constituted under RERA?????
Conclusion
The Adjudicating Officer’s role is crucial in maintaining the integrity of the real estate sector and ensuring that violations of RERA are met with appropriate legal action. As the real estate landscape evolves, so too will the interpretation and application of these powers, reinforcing the need for clarity and effective enforcement.
Though it is only appropriate to arm the AO with powers to issue warrants of arrest and attachment to provide teeth to RERA in the execution of its order however, the legal conundrum looms large. Is the AO being a collector for the purposes of execution applications it receives amenable and subject to the provisions of the Haryana Land Revenue Act or the rules to the Act prevail and the AO can resort to provisions of CPC?
This issue for the time being remains in the grey area and it is hoped soon there will be clarity.