The Madras High Court recently examined whether real estate developers can approach civil courts for the relief of permanent injunction, despite the jurisdictional bar under Section 79 of the Real Estate (Regulation and Development) Act, 2016 (RERA) [Metrozone Apartment Owners Association v Ozone Projects Pvt Ltd.pdf].
Section 79 of the 2016 Act generally vests jurisdiction over real estate disputes with RERA tribunals and provides that civil courts cannot deal with cases that RERA tribunals are empowered to hear.
However, a Bench of Justice PB Balaji observed that since the 2016 Act does not provide for the remedy of permanent injunction, civil courts can be approached for such reliefs even in real estate disputes.
"The common law equitable remedy of permanent injunction not being available to the plaintiff (respondent/ developer) under any of the provisions of the RERA Act, the civil suit instituted by the respondent is certainly maintainable and cannot be rejected as being barred under law invoking Order VII Rule 11(d) of CPC," it held.
The Court passed the ruling in a case where an apartment owners association (allottees/ petitioner) questioned the maintainability of a civil suit filed by a real estate developer before a civil court.
The real estate developer sought to permanently restrain the allottees from disturbing its possession over a certain plot.
The allottees filed a plea to reject the developer's plaint, which the civil court dismissed.
Following this, the allottees filed a revision plea before the High Court, arguing that the developer cannot approach the civil court in such a dispute since only RERA tribunals have exclusive jurisdiction to deal with such disputes. The allottee association contended that the developer's plaint was liable to be rejected.
The High Court noted that the question before it whether a suit for a common law remedy, namely the relief of permanent injunction, can be sought before the Real Estate Regulatory Authority or not.
The Court answered this query in the negative, noting that Sections 36 and 37 of the 2016 Act deal only with interim restraint and directions, while Section 40 concerns the enforcement of orders.
None of these provisions empower the RERA tribunals to grant permanent injunction. Hence, the common law remedy of permanent injunction can only be sought before a civil court, the Court ruled.
After reviewing precedents from various High Courts and the Supreme Court, the Court explained that the bar on civil court jurisdiction under Section 79 applies only to matters that the RERA tribunal is specifically empowered to decide.
Since RERA lacks the authority to grant permanent injunction, the civil suit was maintainable, the Court concluded.
"The Trial Court has also rightly refused to look into the application (seeking rejection of the developer's plaint) filed by the revision petitioner (allottees) before RERA, as it is alien for consideration in an application for rejection of the plaint. Even otherwise, the Trial Court has also found that the cause of action for the present suit is entirely different from the complaint filed by the revision petitioner before the Tribunal and has rightly proceeded to dismiss the application for seeking rejection of the plaint," it said.
Accordingly, the revision plea challenging the trial court’s refusal to reject the plaint was dismissed.
Advocate N Nandhakumar appeared for the petitioner (apartment owners association/ allottees).
Advocate R Venkatraman of Tatva Legal appeared for the developer.
[Read Order]