New Delhi: Tightening the noose around Vatika builders, the Supreme Court Tuesday ordered the real estate developer to deposit over Rs 1 crore it owes to four homebuyers as compensation for delayed possession.
A bench led by Chief Justice of India Surya Kant issued the orders while hearing writ petitions of the homebuyers who had invested in different Vatika projects in Gurugram between 2009 and 2011.
Significantly, in all the cases, the Haryana Real Estate Regulatory Authority (HRERA) had issued orders against Vatika, directing it to hand over possession and pay compensation to each homebuyer.
This is the second case before the CJI’s bench where the lack of adequate legal tools to execute RERA’s orders have come under scrutiny. Earlier, the top court bench had also pulled up Parsvnath Developers for not complying with HRERA’s orders. It had also rapped the local police for its inability to serve HRERA’s bailable warrants against the company’s directors.
In Vatika’s case, even though HRERA’s orders in each case attained finality since the company never challenged them, it made no effort to comply with the directives either.
For more than two years, the buyers pursued their case before HRERA. But the authority created to regulate the real estate sector could not ensure compliance of its own orders due to the weak execution mechanism in the law.
In March this year, the proceedings before RERA in all the four homebuyers’ cases were abruptly stalled after insolvency proceedings were initiated against Vatika before the National Company Law Tribunal (NCLT).
Challenging this order of HRERA, the homebuyers moved the Supreme Court. During the hearing, senior advocate Priya Hingorani, who appeared for the petitioners, highlighted Vatika’s conduct and non-execution of HRERA’s bailable warrants against its directors.
In their petition, the homebuyers asserted that the delay in getting possession of their homes has not only resulted in financial loss, but defeated the “very object and purpose” of their investment, which was to secure a peaceful and dignified residence.
Three of the four cases are of senior citizens. In two of them, HRERA had in September 2023 directed the builder to pay 10.75 percent interest on the amount deposited by the investors from the due date of possession, which is November 2014, till actual handing over of the house.
In the third case, that of a 75-year-old man, HRERA had through its order in February 2023 directed Vatika to offer him possession of an alternative villa and pay 10.75 percent interest from the due date of possession, which is August 2014, till actual handing over.
The fourth case is of a 55-year-old. In January 2024, HRERA had directed the builder to pay annual interest at the rate of 10.85 per cent for every month of delay from September 2012, which was the due date of possession, till the actual handing over of the house.
Advocate Chandra Bhusha, who filed the petition on behalf of the four homebuyers, told ThePrint that in all the four cases, the homebuyers followed up with the builder for more than a decade, between 2010 and 2021, before approaching HRERA.
“They had deposited a considerable amount of money and despite persistently approaching the company, did not get possession,” he said.
Eventually, in 2021-2022, the petitioners filed their cases before HRERA, instituting separate proceedings against Vatika.
Bhushan told ThePrint that in all four cases, the petitioners got favourable orders, but were still not in possession of their homes. Within months, they were back to HRERA with execution petitions, asking the authority to take action to implement its own orders.
The execution proceedings demonstrate the complete collapse of the enforcement mechanism contemplated under RERA, the lawyer said. Multiple orders issued after filing of the execution petitions remained unimplemented.
HRERA went to the extent of even issuing bailable warrants against the company directors, which, Bhushan said, could not be served even with the assistance of Gurugram’s Deputy Commissioner Police. “The insolvency proceedings further aggravated the uncertainty and hardship already faced by the petitioners.”
(Edited by Gitanjali Das)