Introduction:

The case of Marvel Landmarks Pvt. Ltd. v. State of Maharashtra & Ors. came before the Bombay High Court, presenting an important question regarding the interpretation of the Real Estate (Regulation and Development) Act, 2016 (RERA). The central issue revolved around whether an Adjudicating Officer, appointed under the Act, possesses the authority to direct refund of amounts paid by homebuyers, or whether such power lies exclusively with the Real Estate Regulatory Authority.

The petitioner, Marvel Landmarks Pvt. Ltd., challenged an order passed by an Adjudicating Officer directing refund of ₹1.35 crore along with interest to a flat purchaser. The challenge was primarily based on the interpretation of the Supreme Court’s decision in Newtech Promoters and Developers Pvt. Ltd. v. State of UP, which, according to the petitioner, restricted the power to grant refund exclusively to the Authority and not to the Adjudicating Officer.

The case also raised procedural concerns, including whether the petitioner could invoke writ jurisdiction after failing to exhaust statutory remedies and after significant delay. Thus, the matter required the Court to examine not only the statutory scheme of RERA but also broader principles governing delegation of powers, judicial discipline, and finality of proceedings.

Petitioner’s Arguments:

The petitioner, Marvel Landmarks Pvt. Ltd., advanced a detailed challenge to the impugned orders, both on jurisdictional and procedural grounds.

Firstly, it was contended that the Adjudicating Officer lacked jurisdiction to direct refund of the amount to the flat purchaser. The petitioner argued that under the scheme of RERA, the power to grant refund lies exclusively with the Real Estate Regulatory Authority, while the Adjudicating Officer is confined to adjudicating compensation claims under Section 71 of the Act.

The petitioner placed heavy reliance on the Supreme Court’s judgment in Newtech Promoters and Developers Pvt. Ltd. v. State of UP, asserting that the ruling clearly demarcated the functions of the Authority and the Adjudicating Officer. According to the petitioner, the judgment implied that refund orders fall outside the domain of the Adjudicating Officer, rendering the impugned order legally unsustainable.

Secondly, the petitioner argued that the order passed by the Adjudicating Officer was “non est” in law, meaning that it was void ab initio due to lack of jurisdiction. On this basis, it was contended that the validity of the order could be challenged at any stage, and the bar of limitation or delay would not apply.

Thirdly, the petitioner challenged the recovery proceedings initiated pursuant to the refund order, arguing that they were consequential to an invalid order and therefore liable to be quashed.

Additionally, the petitioner attempted to justify the delay in approaching the High Court by stating that the legal position became clear only after the Supreme Court’s decision in Newtech. Therefore, according to the petitioner, the writ petition was maintainable despite the lapse of time.

Respondents’ Arguments:

The respondents, including the State authorities and the flat purchaser, opposed the writ petition and defended the validity of the impugned orders.

Firstly, it was argued that the statutory framework of RERA allows for delegation of powers under Section 81. The respondents contended that while Section 71 confers exclusive jurisdiction on Adjudicating Officers to adjudicate compensation claims, it does not prohibit the delegation of other functions of the Authority, including the power to direct refund.

Secondly, the respondents distinguished the Newtech judgment, arguing that it did not address the issue of delegation under Section 81. Instead, the Supreme Court was concerned with whether a member of the Authority could exercise certain powers, and not whether such powers could be delegated to an Adjudicating Officer.

Thirdly, the respondents emphasized that the Adjudicating Officer is a judicially trained individual, capable of conducting quasi-judicial proceedings. Given that the determination of refund typically involves examination of documentary evidence and a summary inquiry, it was argued that such matters fall well within the competence of the Adjudicating Officer.

Further, the respondents raised strong objections regarding the maintainability of the writ petition. They pointed out that the petitioner had failed to avail the statutory remedy of appeal provided under the Act. Having allowed the order to attain finality, the petitioner could not seek to reopen the matter through a writ petition.

Additionally, the respondents highlighted the significant delay in filing the writ petition. They argued that the petitioner approached the Court nearly three years after the Newtech judgment and several years after the impugned order, which demonstrated lack of diligence and disentitled the petitioner from discretionary relief.

Court’s Judgment:

The Bombay High Court delivered a well-reasoned judgment addressing both the substantive and procedural aspects of the case, ultimately dismissing the writ petition.

At the outset, the Court undertook a detailed examination of the statutory scheme of RERA. It noted that the Real Estate Regulatory Authority consists of a Chairperson and members, while Adjudicating Officers are appointed specifically to adjudicate compensation claims under Section 71. However, the Court emphasized that Section 81 of the Act expressly permits delegation of powers and functions of the Authority to its officers.

The Court clarified that while adjudication of compensation is exclusively within the domain of the Adjudicating Officer, this does not preclude the delegation of other functions, including the power to direct refund. It held that the statutory scheme does not impose any prohibition on such delegation.

Addressing the reliance on the Newtech judgment, the Court observed that the Supreme Court’s decision must be understood in the context of the issue it decided. The Court noted that Newtech dealt with whether a member of the Authority could exercise certain powers, and did not consider the question of delegation under Section 81. Therefore, it could not be interpreted as barring delegation of refund powers to an Adjudicating Officer.

The Court further reasoned that an Adjudicating Officer, being a judicial officer, is well-equipped to handle matters involving refund. It observed that directing refund typically involves a limited and summary inquiry based on documentary evidence, which falls within the competence of such officers.

Importantly, the Court held that delegation of refund powers to an Adjudicating Officer is not contrary to the scheme of the Act. On the contrary, it is consistent with the objective of ensuring efficient and effective adjudication of disputes in the real estate sector.

On the procedural aspect, the Court found that the impugned order had attained finality, as the petitioner had not availed the statutory remedy of appeal. It emphasized the principle that where a statute provides a specific mechanism for redressal, parties must exhaust such remedies before invoking writ jurisdiction.

The Court also took note of the significant delay in filing the writ petition. It observed that the petitioner approached the Court after a considerable lapse of time, including nearly three years after the Newtech judgment. Such delay, coupled with the failure to pursue statutory remedies, weighed heavily against the petitioner.

The Court reiterated that writ jurisdiction is discretionary in nature and should not be exercised to reopen concluded proceedings, especially when rights have crystallized over time. It held that allowing such challenges would undermine the finality of judicial and quasi-judicial decisions.

In conclusion, the Court declined to interfere with the impugned orders and dismissed the writ petition, thereby upholding the validity of the refund order and subsequent recovery proceedings.