[RERA] Real Estate Appellate Tribunal does not have suo motu powers: Delhi High Court

The Real Estate Appellate Tribunal (Appellate Tribunal) does not have powers to initiate cases suo motu, the Delhi High Court recently held while setting aside such proceedings initiated by the tribunal to monitor construction activity in the National Capital Territory [Praveen Chhabra v. Real Estate Appellate Tribunal]..Single-judge Justice Yashwant Varma held that under the Real Estate (Regulation and Development) Act, 2016 (RERA), the jurisdiction of the Appellate Tribunal stands confined to consideration of challenges raised against orders passed by either the Real Estate Regulatory Authority (Authority) or the Adjudicating Authority under the RERA. "The Act does not vest or confer any authority or jurisdiction upon the Appellate Tribunal to initiate proceedings on its own motion," the Court held. In the present case, the Appellate Tribunal had registered suo moto proceedings in respect of various residential and commercial projects and construction activities being undertaken in connection with the same in the national capital and had passed orders of restraint against such projects.It had also passed an order stating that all construction activity, residential or commercial, would be stayed till the project is registered under RERA Act.Aggrieved by the same, Praveen Chhabra, a builder developer approached the High Court after he was informed that the plans he had submitted could not be approved in light of the Appellate Tribunal order..The Court held that the Appellate Tribunal failed to keep the ambit of the Act in mind.“The Appellate Tribunal proceeded on the incorrect and unfounded premise that all projects were liable to be compulsorily registered under the Act,” the High Court said..The judge noted that the Appellate Tribunal was constituted as a forum whose jurisdiction could be invoked by a person aggrieved by an order, decision or direction of the Authority as per Sections 43 and 44 of the RERA Act which provides for setting up of tribunals and defining what disputes can be raised before such tribunals.“Sections 43 and 44 of the Act do not confer, recognize or envisage any original or plenary power or authority being exercised by the Appellate Tribunal. The authority of the Appellate Tribunal stands confined to consideration of challenges that may be laid to orders passed by either the Authority or the Adjudicating Authority,” the Bench held..The High Court also said that the Appellate Tribunal being a creation of statute, is not part of traditional judicial institutions.“The Appellate Tribunal is a creation of statute. It is not an authority which may be recognised as being vested with inherent powers. …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 stems from the provisions of the Act,” the Bench emphasized..The Court, therefore, quashed the order staying the construction of projects until they are registered under with the RERA authority.“The Court also takes into consideration the significant portent of the direction issued. It has practically injuncted all construction activity in the NCT of Delhi. The aforesaid injunction is not shown to have been preceded by any enquiry with respect to the validity of a particular project or even a prima facie assessment or evaluation of the validity of a single project,” the Court observed while quashing the order..The judge, however, clarified that he was not interfering with the Authority’s right to independently examine individual projects under the RERA Act..Advocates Sanjeev Sagar, Nazia Parveen, Ranjan Sardana and Ridhi Malik appeared for Chhabra.Senior Advocate Rajeev Mehra served as the Amicus Curiae in the case.[Read Judgment]