Mr. Justice Surya Prakash Kesarwani

Merely because the petitioner is a bonafide auction purchaser who had purchased assets of Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon – Palika Towns LLP Vs. State of UP and 2 others – Allahabad High Court

Hon’ble High Court of Allahabad held that (i) Merely because the petitioner is a bonafide auction purchaser who had purchased assets Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon. (ii) The Insolvency Bankruptcy Code, 2016 grants limited protection to the petitioner (auction purchaser) while allowing it to step into the shoes of the Corporate Debtor but in order to the lessee of the principle lessor (GNIDA) the petitioner has to honor the commitments and discharge its contractual obligation as embodied in the lease deeds, Transfer Memorandum and Sale Certificate. (iii) The words so employed in the Certificate of Sale Deed being “AS IS WHERE IS”, ”AS IS WHAT IS”, “WHATEVER THERE IS” AND “NO RECOURSE” itself creates contractual obligation upon the petitioner to honor the commitments and to discharge the obligations so embodied in the lease and the subsequent lease deeds for the payment of past lease rentals and interest thereon. (iv) The principal lessor has paramount interest over the demised land put to auction and it has legal as well as contractual right to raise demand of out standing arrears of lease rentals and interest thereon. (v) High Court under Article 226 of the Constitution of India cannot by a judicial fiat creates a podium to facilitate avoidance of agreements while wriggling out from contractual obligations so embodied therein. A writ petition containing solitary relief of refund of the amount deposited for fulfilling contractual obligation, is not maintainable.

Merely because the petitioner is a bonafide auction purchaser who had purchased assets of Corporate Debtor through auction/bidding so conducted by orders of NCLT, will not absolve it from paying arrears of lease rental and interest thereon – Palika Towns LLP Vs. State of UP and 2 others – Allahabad High Court Read Post »

Even if the prescribed time limit u/s 14 of SARFAESI has passed over and the District Magistrate could not handover possession of the secured asset, still the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, will be enjoined upon the duty to facilitate the delivery of possession at the earliest – Asset Reconstruction Company India Ltd. Vs. State of U.P. And 4 Others – Allahabad High Court

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Even if the prescribed time limit u/s 14 of SARFAESI has passed over and the District Magistrate could not handover possession of the secured asset, still the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, will be enjoined upon the duty to facilitate the delivery of possession at the earliest – Asset Reconstruction Company India Ltd. Vs. State of U.P. And 4 Others – Allahabad High Court Read Post »

Adjudicating Officer under Section 71 of Real Estate (Regulation & Development) Act, 2016 has no power to award interest and compensation, in the event possession of the flat has been taken by the allottee from the promoter – Vibhor Vaibhav Infrahomes Pvt. Ltd. Vs. Union of India and 5 Ors. – Allahabad High Court

Section 71 of the Real Estate (Regulation & Development) Act, 2016 confers power upon an Adjudicating Officer to adjudge compensation under Sections 12, 14, 18 and 19. Sub-­section (3) of Section 71 provides that if the Adjudicating Officer is satisfied that the person has failed to comply with the provisions of any of the sections specified in Sub-­section (1) he may direct to pay such compensation or interest, as the case may be, as he thinks fit in accordance with the provisions of any of those sections.

Section 38(1) of the Act, 2016 confers power upon the ‘Authority‘ to impose penalty or interest in regard to contravention of obligations cast upon the promoters, the allottees and the real estate agents under the Act, Rules and Regulations. Power to award compensation or interest has been conferred under Section 71(1)/(3) of the Act, 2016 upon an Adjudicating Officer for adjudging compensation under Section 12, 14, 18 and Section 19 of the Act, 2016. Thus, the power to adjudge compensation has been conferred upon the Adjudicating Officer and not upon the Authority.

Adjudicating Officer under Section 71 of Real Estate (Regulation & Development) Act, 2016 has no power to award interest and compensation, in the event possession of the flat has been taken by the allottee from the promoter – Vibhor Vaibhav Infrahomes Pvt. Ltd. Vs. Union of India and 5 Ors. – Allahabad High Court Read Post »

Section 2(za)(ii) of RERA, 2016 does not restrict or provide that interest is payable only after the commencement of the Real Estate (Regulation & Development) Act, 2016 – Habitech Infrastructure Ltd. Vs. State of U.P. and 2 Ors. – Allahabad High Court

Section 2 (za) (ii) does not restrict or provide that interest is payable only after the commencement of the Act, and it takes care of the fact that once the allottee had made deposit with the promoter he is liable to pay the interest from the date of deposit of the entire amount or part of the amount. Similarly on the reading of Section 71 it is crystal clear that Adjudicating Officer has been adorned with the power of adjudicating compensation only under Sections 12, 14, 18 and 19 of the Act and not in regard to the refund of the amount or grant of interest on the amount deposited by the allottee with the promoter. Thus, power of refund of amount alongwith interest which has been provided under Section 18, with the authority was rightly exercised by it in the interest of justice.

Section 2(za)(ii) of RERA, 2016 does not restrict or provide that interest is payable only after the commencement of the Real Estate (Regulation & Development) Act, 2016 – Habitech Infrastructure Ltd. Vs. State of U.P. and 2 Ors. – Allahabad High Court Read Post »

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