HC expresses concern over rather an unfortunate trend of dilatory tactics that builders often resort to, for defrauding homebuyers

 

The Division Bench of the Delhi High Court in the case of Sunil Kumar Pandey & Anr. vs Union of India & Ors. consisting of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad expressed concern over the rather unfortunate trend that builders often resort to dilatory tactics, defraud homebuyers by selling units to multiple individuals, delay the execution of projects, and execute projects without requisite sanctions.

Facts

This Letters Patent Appeal was filed by Mr. Sunil Kumar Pandey and his wife (“Appellant”) seeking setting aside of the Order via which the Ld. Single Judge dismissed a petition while giving the Petitioner therein i.e., the Appellant herein the liberty to pursue the civil suit instituted by the Petitioners themselves. The Appellants placed on record that they had been defrauded by one builder, namely, Kunal Structural Developers & Industries Pvt. Ltd. (“Respondent No. 3/Respondent Builder”) in collusion with Indiabulls Housing Finance Limited (“Respondent No. 4”).

Contentions Made

Appellants: It was contended that the Ld. Judge failed to consider that the civil suit filed was rendered infructuous on account of the moratorium imposed on Respondent No. 3 under the Insolvency and Bankruptcy Code, 2016. It was also contended that although an application u/s 8 of the Arbitration and Conciliation Act, 1996 has been filed before a Trial Judge, it does not preclude this Court from entertaining the writ petition.

 

Respondent: It was contended that the Ld. Single Judge had rightly dismissed the Petition on the ground of maintainability. It was also contended that there are several other remedies available to the Appellants and matters are already pending before other courts. So, this appeal deserves to be rejected.

Observations by the Court

The Bench noted that the Ld. Single Judge dismissed the writ petition due to lack of territorial jurisdiction and since other equitable remedies were available to the Appellants which had been availed by the Appellants already. The question before it was whether the Appellants had rightly approached the Ld. Single Judge seeking an exercise of his discretionary powers under Article 226 of the Constitution of India. 

Relying on Swetambar Sthanakwasi Jain Samiti v. Alleged Committee of Management Sri R.J.I. College, Agra, Ghan Shyam Das Gupta v. Anant Kumar Sinha and Radha Krishan Industries v. State of Himachal Pradesh & Ors. to note that the remedy provided under Article 226 is not intended to supersede the modes of obtaining relief before a civil court or to deny defences legitimately open in such actions., although exceptions exist.

It noted that the Appellants have in fact availed of other remedies. It also noted that the Appellants claim that the Ld. Single Judge failed to note that the civil suit was rendered infructuous due to the moratorium imposed upon Respondent No. 3 was ill-founded as the moratorium operated qua Respondent No. 3 i.e., the Builder, and not the Respondent No. 4 i.e., the bank. As the prayers in the suit are sought qua Respondent No. 4, an equitable alternate remedy was still available to the Appellants. Further, the moratorium will cease to exist once the proceedings under the Insolvency and Bankruptcy Code culminated. So, it did not find any occasion to interfere with the Impugned Order.

 

It further expressed concern over the rather unfortunate trend that builders often resort to dilatory tactics, defraud homebuyers by selling units to multiple individuals, delay the execution of projects, and execute projects without requisite sanctions:

“Invariably most of such builders also undergo insolvency. The greatest loss is incurred by innocent homebuyers who are not only forced to embroil themselves in litigation but are also divested of their hard-earned savings.”

Judgment 

Although this Court sympathised with the Appellants, and similarly placed innocent homebuyers, it could not possibly take account of all such real estate projects, and the issues arising from them. It was not inclined to interfere with the Impugned Order. However, it stated that the Appellants were free to pursue other remedies available to them and dismissed this petition accordingly.

Case: Sunil Kumar Pandey & Anr. vs Union of India & Ors.

Citation: LPA 576/2022 & CM APPL. 44189/2022 

Bench: Chief Justice Satish Chandra Sharma, Justice Subramonium Prasad

Decided on: 1^st November 2022

Social media is bold. 

Social media is young.

Social media raises questions.

 Social media is not satisfied with an answer.

Social media looks at the big picture.

 Social media is interested in every detail.

social media is curious.

 Social media is free.

Social media is irreplaceable.

But never irrelevant.

Social media is you.

(With input from news agency language)

 If you like this story, share it with a friend!   

We are a non-profit organization. Help us financially to keep our journalism free from government and corporate pressure