Dissecting the Aarcity Builders vs. Buyer Welfare Association: An In-Depth Legal Battle

In a recent case before the Haryana Real Estate Appellate Tribunal, the Aarcity Regency Park Apartment Buyer Welfare Association filed an appeal against an order issued by the Haryana Real Estate Regulatory Authority. The case involved multiple parties, including Aarcity Builders Private Limited and Hisar Real Estate Private Limited. This article provides an in-depth analysis of the case, highlighting the key arguments, decisions, and implications.

Case Background:

Case Number: Appeal No. 496 of 2021

Date of Decision: 02.03.2023

The Aarcity Regency Park Apartment Buyer Welfare Association, headquartered at 2904, Sector 9-11, Hisar, served as the appellant in this case. The respondents were Aarcity Builders Private Limited, with its registered office at Regency Park, Sector 11A-17, Hisar, and Hisar Real Estate Private Limited, with its registered office at CGB 053, DLF Moti Nagar, New Delhi.

Case Analysis:

The case was presided over by Justice Rajan Gupta as the Chairman of the Tribunal, with Shri Inderjeet Mehta serving as the Member (Judicial) and Shri Anil Kumar Gupta as the Member (Technical). The respective advocates representing the parties were Shri Nithin Thatai for the appellant, Shri Shekhar Verma for respondent no. 1, and Shri Hemant Saini for respondent no. 2.

The appellant challenged the order passed by the Haryana Real Estate Regulatory Authority on 07.09.2021. The Authority's order contained several conclusions, which were contested by the appellant in their appeal. The key points of contention were as follows:

1. Diversion of Funds: The appellant alleged a suspected diversion of funds by the respondent companies. However, the respondents provided a satisfactory explanation through their counsel, Shri Shekhar Verma. The Authority, after considering the funds invested and collected, concluded that there was no diversion of funds from the allottees of the project.
2. Sample Agreements and Differential Pricing: The Authority directed the respondents to submit sample agreements of each type of villa to determine the justification for differential pricing. The respondents were given a timeframe of 10 days to submit the sample agreements to the Authority and the opposite party.
3. Progress of the Project: The Authority expressed initial suspicion regarding the diversion of funds but acknowledged the progress shown by the promoters. The Authority decided to review its suspicion, considering that the first phase of the project was likely to be completed soon. The report of the auditor, which raised concerns based on incorrect assumptions, influenced the Authority's decision.
4. Forensic Audit and Monitoring of Project Progress: To ensure transparency, the Authority had earlier ordered a forensic audit of the promoter's investments in the last year. The forensic audit report was submitted, and the respondents were directed to deposit the auditor's fee with the Authority. Additionally, the Authority decided to monitor the project's progress on a bi-monthly basis and requested the respondents to report the funds received and invested in the project, as well as the physical progress achieved.
5. Refund of Money: The appellant's counsel raised a matter regarding a complainant in Complaint No.315 of 2018, who insisted on a refund of the money paid. The Authority decided not to hear this matter temporarily, awaiting the orders of the Hon'ble Supreme Court of India concerning the Authority's jurisdiction for complaints involving fund-related relief.

Conclusion:

In conclusion, the Aarcity Regency Park Apartment Buyer Welfare Association's appeal against the order of the Haryana Real Estate Regulatory Authority was heard and disposed of by the Haryana Real Estate Appellate Tribunal. The Tribunal, chaired by Justice Rajan Gupta, reviewed the appellant's contentions and clarified that the observations made in the Authority's order were solely for the purpose of deciding the matter before it. The Tribunal affirmed that the investigating agency would proceed independently and in accordance with the law.

This case highlights the importance of addressing suspicions of fund diversion and ensuring project completion and transparency in real estate developments. It also underscores the role of regulatory authorities and appellate tribunals in resolving disputes and safeguarding the interests of buyers and promoters in the real estate sector.

Note: The information provided in this article about Haryana Real Estate Regulatory Authority (HRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances. The information provided in this article is based on the Appeal No. 496 of 2021 before the Haryana Real Estate Regulatory Authority

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