The Supreme Court on Monday issued strict directions against Haryana-based company Parshvanath Developers as the company had failed to comply with the instructions of the Haryana Real Estate Regulatory Authority (HRERA). The court ordered freezing the bank accounts of Parshvanath Hesa Developers Limited and directors of Parshvanath Developers Limited and issuing warrants against them. Also, the director has been asked to appear in the next hearing.
Also, in its decision, the court also said that it seems that the Haryana officials were either in collusion with the builder or failed to fulfill their legal responsibilities. The court also warned during the hearing that if the director did not appear on the next date, non-bailable warrants would be issued against him.
Possession was to be given in 36 months, 2 decades passed
The bench of Chief Justice Surya Kant, Justice V. Mohana and Justice Joymalya Bagchi was hearing petitions filed by senior citizen homebuyers of Parshvanath Exotica Project in Gurugram. These people had paid the full price of the house about two decades ago, but they have not yet got the possession of their flat. Whereas the condition was that the possession would be given within 36 months from the date of completion of the project. This deadline was completed in 2013.
Describing the case as highlighting “the difficult situation of home buyers”, the Supreme Court said, “These writ petitions reflect the difficult situation of home buyers who had paid the full price of the home more than 2 decades ago, but are yet to receive the homes they were promised.”
20 years ago the price of the flat was Rs 1 crore
The petitioners were temporarily allotted flats in the year 2006 and agreements to purchase the flats were made in early 2007. The cost of each flat was more than Rs 1 crore and as per the contract, possession was to be taken in 2013. However, when the buyers visited the construction site, they found that the construction work was still incomplete.
Frustrated with the slow work, flat buyers approached HRERA in the year 2021, which passed an order in their favor and directed the builder to pay appropriate compensation. The Supreme Court observed during the hearing that the builder never challenged those orders, making those orders final.
Continuous ignoring of HRERA guidelines
The court said, “The builders are continuously ignoring and violating the HRERA guidelines. As a result, neither possession has been given nor any appropriate compensation has been given.” When builders failed to comply with the order, flat buyers initiated the process to get the order implemented before HRERA in 2022. The court observed that despite repeated attempts, the Gurugram Collector could not recover “even a single penny” from the developers.
The bench recorded that warrants were issued against the directors of the companies concerned to produce them before HRERA. The court also noted serious shortcomings in the implementation of those warrants. The Supreme Court said, “We are concerned to see that in one case bailiffs were not allowed to enter the companies, for which police help had to be taken. But, in the absence of effective help, those instructions were also not followed. No strict action could be taken, and hence the petitioners are still running from pillar to post to get the orders passed in their favor for 2021-22.”
Order to freeze accounts of directors
Taking cognizance of continuous non-compliance of orders, the Supreme Court ordered freezing of bank accounts of directors of Parshvanath Hesa Developers Limited and Parshvanath Developers Limited. The court also restrained the defendants from creating rights in the project or handing over possession of any unit to any third party until further orders.
The court also directed the Haryana Chief Secretary, Director General of Police, all collectors, all commissioners and all concerned banks to ensure that its instructions are strictly followed and compliance affidavits should also be filed in the court. The bench said that this case has exposed the shortcomings of the system in implementing the Real Estate (Regulation and Development) Act.
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