Adjudicating Officer's Order on Interest Exceeds Jurisdiction, Referred Back to Regulatory Authority for Reassessment
In a significant ruling, the Madhya Pradesh High Court, Gwalior Bench, has clarified the jurisdictional boundaries between the Regulatory Authority and the Adjudicating Officer under the Real Estate (Regulation and Development) Act, 2016 (RERA). The court upheld the decision of the Regulatory Authority entitling respondent No. 3 to a refund due to delays in construction but found that the Adjudicating Officer overstepped by awarding interest, which falls outside their jurisdiction.
The case, titled "M/s Jetal Construction Private Limited v. State of Madhya Pradesh," involved a petition by Jetal Construction challenging an order that directed them to refund Rs. 45,00,000 with 10% interest to respondent No. 3. The refund was ordered due to the company's failure to deliver possession of flats as agreed.
Justice Milind Ramesh Phadke, presiding over the case, referenced the Supreme Court's decision in "M/s. Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh," which delineates the roles of the Regulatory Authority and the Adjudicating Officer. The court reaffirmed that while the Regulatory Authority is empowered to decide on refunds and penalties, the Adjudicating Officer's role is confined to adjudicating compensation.
The court noted that the Regulatory Authority had already determined the respondent's entitlement to a refund due to construction delays. Consequently, the court sustained the Adjudicating Officer's order only to the extent of implementing the Regulatory Authority's decision but annulled the interest component, remanding it back to the Regulatory Authority for proper adjudication.
This decision underscores the importance of adhering to statutory jurisdictions as defined under RERA, ensuring that homebuyers' rights are protected while maintaining procedural integrity.
Bottom line:-
Real Estate (Regulation and Development) Act, 2016 - Jurisdiction of Adjudicating Officer confined to adjudging compensation; Refund of amount and interest falls within the domain of the Regulatory Authority.
Statutory provision(s): Sections 18, 19, 40, 71 of the Real Estate (Regulation and Development) Act, 2016
