Can Exercise Writ Jurisdiction Against Private Party That Wrongly Benefits From Inaction Of Public Authorities In Discharge Of Public Duty: Bombay HC

The Bombay High court recently came to the rescue of flat purchasers and allowed interim reliefs against private developers in writ petitions. A bench of Justices S.J. Kathawalla and Milind N. Jadhav regarded that inaction of government bodies against private developers is affecting the rights of innocent individuals. Hence, the court can exercise writ jurisdiction to protect their interests. The bench noted that the Developers, despite collecting an approximate amount of Rs.178 Crores from the innocent flat purchasers, have not provided to them a single flat. The tenants have obtained Recovery Certificates from the Maharashtra Real Estate Regulatory Authority, Mumbai ('RERA') for refund of the sale consideration, due to delay of several years in constructing their flats. Since the Developer failed to comply with the Orders passed by RERA, the Petitioners were constrained to file execution proceedings before RERA. The execution proceedings were allowed and RERA issued a Recovery Certificate under Section 40(1) of the said Act read with Rule 3 of the Maharashtra Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine Payable, Forms of Complaints and Appeal, etc.), Rules, 2016 ("RERA Rules") in favour of the Petitioners and against the Developer. RERA then forwarded these Recovery Certificates to the Collector and Tahsildar directing them to execute the same and recover the decreetal amounts as mentioned therein (which were payable to the Petitioners), as arrears of land revenue. However, the Petitioners state that despite repeated reminders, the Collector and Tahsildar, have failed to execute or take any effective steps to execute the said Recovery Certificates till date. The bench said that it was prima facie satisfied that despite the directions from RERA, the Collector and Tahsildar have failed to exercise their powers under Section 263 to 267 of the Maharashtra Land Revenue Code, 1966 read with Rule 17 of the Maharashtra Realization of Land Revenue Rules, 1967 to secure the recovery of the decretal amounts mentioned under the Recovery Certificates, which are payable to the Petitioners. In Rustam Mehta v. State of Maharashtra & Ors, 2021 SCC OnLine Bom 1090, which arose out of similar set of facts, it was held that in exercise of its inherent and wide powers under Article 226 of the Constitution of India, the High Court has the jurisdiction to pass orders and/or directions against a private party Respondent, that has wrongly benefitted from the inaction on the part of the public authorities in discharge of their public duty. In the instant case, the Court noted that the only person who has wrongly benefitted from such inaction of the Collector and Tahsildar are the Developer herein (being a private party), who have till date failed to comply with the Orders passed by RERA and failed to pay the decreetal amount to the Petitioners, which amounts are admittedly due and payable by the Developer to the Petitioners. As per the documents produced by the Developer themselves, they have collected approximately Rs. 178 crores from flat purchasers of the 'Hill View' Project. "Despite having received such huge amounts from the flat purchasers, the Developers have till date not completed construction of the 'Hill View' Project and has in fact abandoned the same for the last one year. Further, from the material on record, it also appears that out of the monies collected from the flat purchasers, huge amounts have been transferred by the partners of the Developers to themselves, their family members and even related entities while the innocent flat purchasers still await their dream homes or the refund of their hard-earned money," the Court noted. In fact, in teeth of the order of injunction passed by the Court in the Writ Petitions, the Developer has transferred monies to the tune of Rs. 56 lakhs inter alia to itself and related parties, in complete disregard to the orders passed by the Court, it added. Considering the aforesaid conduct of the Developers, the Court was of the view that the Developer has no intention of voluntarily repaying the admitted dues of the Petitioners and that the Petitioners are justified in their apprehension that if interim reliefs to protect the decreetal amounts of the Petitioners are not granted, it is very likely that the Developer shall deal with or further encumber all their assets and nothing will be left to the hands of the Petitioners despite having a decree in their favour. Accordingly, the Court was of the view that the Petitioners have made out a case for grant of interim reliefs and the balance of convenience is in favour of the Petitioners and against the Developer. The bench noted that it is also clear that not only has the Developer failed to comply with the Orders passed by RERA but has also brazenly violated various orders of disclosure passed by the High...

Can Exercise Writ Jurisdiction Against Private Party That Wrongly Benefits From Inaction Of Public Authorities In Discharge Of Public Duty: Bombay HC

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