High Court of Delhi: RERA Cannot Initiate Suo Moto Proceedings

A Single Bench of the High Court of Delhi in its Judgement dated May 26^th 2022 in Praveen Chhabra Vs. Real Estate Appellate Tribunal has held that the Real Estate Appellate Tribunal (Tribunal) cannot be recognized as having been conferred with the power to initiate proceedings on its own motion.

The Writ Petitioner had challenged the Orders of the Tribunal in Court of Its Own Motion Vs. Commissioners of all the Municipal Zones & Anrs. which stayed all the construction activities, including residential and commercial activities, in the National Capital Region (NCR) that were undertaken without registration of the Real Estate Regulatory Authority (RERA). The said order was a result of the suo moto proceedings initiated by the Tribunal for ensuring compliance with the provisions of the Real Estate (Regulation and Development) Act, 2016. In the order, the Tribunal had also directed the concerned Commissioner, Executive Engineer of each Municipal Corporations, DDA, NDMC and the Commissioner of Police through concerned SHO of Police State of each area to ensure, with immediate effect, that no further construction activity is continued in the absence of RERA registration.

The petitioner submitted before the High Court that the said order was passed by the Tribunal in blatant violation of Section 3 of the Act and that the Tribunal does not have any jurisdiction to initiate suo moto proceedings and pass directions. That the Tribunal had proceeded on an entirely wrong notion failing to appreciate Section 3(2) of the Act which has mandated prior registration of the project under the Act.

In its judgement, the High Court observed that the Tribunal had failed to bear in mind the true ambit of Section 3 of the Act:

”Regard must also be had to the fact that the Appellate Tribunal is not part of the hierarchy of traditional judicial institutions which constitute the judicial system of our country. It is an appellate forum whose origin and formation stem from the provisions of the Act. It is in that sense an adjudicatory authority which owes its existence and authority to a special statute” Further it observed that:

“The aforesaid injunction is not shown to have been preceded by any enquiry concerning the validity of a particular project or even a prima facie assessment or evaluation of the validity of a single project. In fact, the order does not even take note of a proven or evident violation of the provisions of the Act by a particular project. This Court is constrained to observe the procedure as adopted by the Appellate Tribunal can neither be countenanced nor accorded an imprimatur”

Accordingly, the High Court set aside the impugned stay orders of the Tribunal referred above i.e., that the judgement of the High Court cannot be construed as restraining the authority from independently examining the validity of individual projects and enforcing the provisions of the Act in accordance with the law.