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Can't leave home buyers to suffer, Centre & states should act against erring builders: SC

twitter-logoPTI | July 23, 2019 | Updated 20:13 IST

By Abhishek Anshu & Manohar Lal New Delhi, Jul 23 (PTI) Home buyers cannot be made to suffer when the country is "governed by law and have protective machinery", the Supreme Court said on Tuesday while directing the Centre and states to ensure that "appropriate action" is taken against erring builders for not completing projects on time. It also said that even farmers were not paid compensation for the land taken from them at throw away prices as a result of collusion between builders and authorities. The apex court, which gave a body blow to Amrapali Group by cancelling its registration under the Real Estate Regulation and Development Act (RERA) 2016, directed the Centre and state governments to ensure that projects are completed in a time-bound manner as contemplated under the Act and home buyers are not defrauded. A bench comprising Justices Arun Mishra and U U Lalit said builders cannot be permitted to usurp and divert the hard earned money of home buyers and if real estate business has to survive in India, it has to be answerable to the public. Emphasising on the "public trust doctrine", the bench said the public authorities are duty-bound to observe that the leased property is not "frittered away" along with the home buyers' money. "Concerned ministry of central government, as well as the state government and the secretary of housing and urban development, are directed to ensure that appropriate action is taken as against leaseholders concerning such similar projects at Noida and Greater Noida and other places in various states, where projects have not been completed," the bench said in its 270-page judgement. "They are further directed to ensure that projects are completed in a time-bound manner as contemplated in RERA and home buyers are not defrauded," the court said. The top court also directed the Centre and Uttar Pradesh government to ensure that everything is done to protect the interest of home buyers, "obviously without obliging the builders". "Wherever we seek any favour for home buyers, we see that defrauding parties i.e., promoters/builders are further obliged by making certain concessions by the Government that would amount to perpetrating further fraud and unjust enrichment of builder. The case poses challenge to the law enforcement agencies to act in tandem to book such culprits," it said. It also directed the Centre and state governments to take appropriate steps on a time bound basis to do the needful in all such cases where the projects have remained incomplete and home buyers have been cheated and said it should be ensured that such home buyers are provided houses. "The home buyers cannot be made to suffer when we are governed by law and have protective machinery. Question is of will power to extend the clutches of law to do the needful. We hope and trust that hope and expectation of home buyers are not going to be belied," the bench said in its verdict. Noting that home buyers cannot be left in the lurch, the bench said it cannot be denied that they have invested their lifetime savings for purchasing a house with the faith and trust with which they have given the money to the builders. "The scheme of the government is to promote the real estate for which land had been acquired, even poor farmers have not been paid the compensation. The land allotted at throw away prices of 10 per cent, the allotment premium has not been paid and in an illegal manner plots have been allotted on huge amount by builders is another fraud in collusion with authorities," it noted. "In our opinion, if the real estate business has to survive in India, it has to be answerable to the public and has necessarily to uphold the trust reposed in builders/ promoters," the bench said. It said that the kind of fraud, that has taken place not only in Amrapali Group of Companies but at large as more than 70 percent of various projects have not come up, is "alarming" to the courts to take affirmative steps with the direction to prevent such frauds, restore the money of home buyers and to punish incumbents responsible for such act. "The public trust doctrine imposes on the state and its functionaries a mandate to take affirmative action for effective management, and the citizens are empowered to question its ineffectiveness," it said. "The land of the farmers had been acquired for the purpose of housing and infrastructure needs by the State Government and handed over to the concerned authorities for construction. They are bound to ensure that builders act in accordance with the objective behind the acquisition of land and the conditions on which allotment had been made," it said. The bench said it is the duty of concerned officials to not only ensure that rights of home buyers are protected but also the interests of the authorities and bankers. "Affirmative action was clearly enjoined upon them not only under the statutory provisions of various enactments but also under the public trust doctrine that has evolved over the years by this court," the bench said. The top court delivered its judgement on a batch of pleas filed by the home buyers of Amrapali Group seeking possession of around 42,000 flats booked in various projects of the realtor in Noida and Greater Noida. PTI ABA MNL RKS SA

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