The judgment sends out a message that authorities’ power to approve can be scrutinised for legality and a structure can be demolished if the permissions are found to be illegal
While ordering the demolition of Supertech’s 40-storey twin towers in Noida, the Supreme Court on August 31 noted in its ruling that there was collusion between the Noida Authority and the builder in the construction. It pointed out that the minimum distance requirement had been violated and that the structure had been built illegally, without taking the consent of flat owners, as required under the UP Apartment Act.
The Supreme Court observed that the consent of individual flat owners was necessary under the UP Apartment Act before the twin towers were constructed, as the common area was reduced by adding new flats. It noted that the construction of additional towers had “necessarily reduced the undivided interest of the individual flat owners in the common area by adding new flats and increasing the number from 650 to 1,500.”
The apex court noted that by constructing the two towers without complying with the Building Regulations, fire safety norms had also been violated. The first revised plan dated December 2006 had contained a provision for a garden area adjacent to the first tower.
“In the second revised plan of 26 November 2009, the provision for the garden area was obliterated to make way for the construction of Apex and Ceyane. The common garden area in front of T-1 was eliminated by the construction of T-16 and T-17. This is violative of the UP Apartments Act 2010 since the consent of the flat owners was not sought before modifying the plan promised to the flat owners,” the court said.
“The illegal construction of T-16 and T-17 has been achieved through acts of collusion between the officers of NOIDA and the appellant and its management,” the order said.
RWA says faith in judiciary restored
While the Emerald Court Owner Resident Welfare Association (RWA) that had spearheaded the battle against the construction of the twin towers is elated, some buyers who had decided to stay put in the project say that it may be difficult for them to buy another house in the same area for the amount they had invested in the project.
The two towers had initially received 633 bookings. As many as 133 investors have exited by accepting alternative houses in other Supertech projects while 248 have taken refunds. Another 252 buyers are still waiting for their money to be returned to them. The Supreme Court has given two months’ time for all refunds to be made with 12 percent annual interest.
The homebuyers’ association had claimed that the huge twin towers constructed by the builder were not in the original plan shown to them at the time of booking and it had blocked their view, fresh air and sunlight.
UBS Teotia, who is part of the legal committee of the RWA and was its president in 2014, told Moneycontrol that that this is a landmark order and a win for the RWA that had moved the High Court first against the construction of twin towers Apex and Ceyane. He added that the order has restored “our faith in the judiciary.”.
The apex court on August 31 directed that the entire amount paid by homebuyers be refunded with 12 percent interest from the time of the booking and the Residents Welfare Association be paid Rs 2 crore for the harassment caused due to the construction of the twin towers.
“This is a landmark judgment. It is a great win not only for the Supertech Emerald RWA team fighting this long legal battle but also for the families of the entire homebuyers’ community. The judgment gives immense confidence to buyers,” said Rajiva Singh, President, NOFAA (Noida Federation of Apartment Owners Associations).
This order is a reform in itself, said Abhay Upadhyay, who heads the Forum for People’s Collective Efforts (FPCE).
Builders have all along been under the impression that if a building is constructed, no court can demolish it. That may not be true anymore. The Supreme Court has ordered demolition of a structure following a complaint filed by a group of homebuyers (RWA) and that is unprecedented, he said.“The judgment sends out a message that there is no room for complacency and any illegal structure can be demolished. Approvals by authorities are not necessarily legal and the Supreme Court can go into the legality of the process. The fact that sanctions by an authority have been questioned is a reform in itself. It sends out a message loud and clear that if the authorities’ power to give approval and grant sanctions can be legally scrutinised by the Supreme Court, then other authorities can also be subjected to the same, including Real Estate Regulatory Authorities,” he added.
Builders, authorities are accountable: legal experts
Legal experts say that the judgment will ensure that no developer is complacent or can take shortcuts when it comes to complying with construction norms, safety and environmental standards. The fact that the court has ordered the demolition of the entire structure goes to show that any deviation in building plans or what has been promised by the builder to the buyer will not be tolerated.
“Unfortunately for far too long several builders have been complacent and have colluded with authorities and blatantly violated FAR, density, environment and other building norms as they wouldn’t get caught. And even if they did, nobody would dream of directing demolition of such large structures or initiate criminal proceedings against them. This order should definitely seal that issue,” Vaibhav Gaggar, counsel, Supreme Court of India, told Moneycontrol.
“From a buyer’s perspective as well, this judgment would go a long way in ensuring, at least in the future, that they get a legal apartment that adheres to the various norms put in place to ensure that they get proper quality of life. One doesn’t realise that violation of building norms, FAR, density gravely reduces the quality of life, quite apart from adversely impacting the commercial value and rights guaranteed to consumers even otherwise under law. A number of far-reaching jurisprudential issues about consumer rights have also been dealt with in the judgment, which will act as a precedent all across the country,” he added.
The Court has also clearly held that a midway increase in the number of allottees in the same land area cannot be done without the consent of allottees who had already purchased apartments in the project. The reason for this is that whether one looks at UP, Haryana or Maharashtra, apartment owners have an inalienable and indivisible part of the land of the project, which obviously gets reduced if more apartments are sold and built on the same piece of land. Similarly, various facilities get divided among a larger number of people than previously envisaged, he added.
Maradu case parallelsSanjeev Sharma, Partner, Saraf & Partners, told Moneycontrol that in both the Maradu demolition case (in Kochi) as well as in the Supertech matter, construction was carried out by builders in collusion with local authorities. In both cases, the Supreme Court ordered demolition of the properties, and in the case of Maradu, the towers had been completed and were even occupied by residents. The Maradu demolition was ordered due to violation of Coastal Regulation Zone requirements, while Supertech was found to be in violation of provisions of the UP Apartment Act.
In both cases, the apex court declined to regularise the unauthorised construction.
“This sends a clear and stern message to all builders that courts are not inclined to use their equitable jurisdiction to regularise projects that are constructed in violation of building byelaws.”
In both cases, the Supreme Court ordered provision of compensation to the homebuyers — in Maradu, an interim compensation of Rs 25 lakh was granted to each homebuyer which was payable by the State and recoverable from the builder. In the Supertech case, each of the homebuyers has been directed to be paid the principal amount along with interest directly by the builder. In Supertech’s case even the RWA, which was a petitioner before the Allahabad High Court, has been granted compensation of Rs 2 crore.“Thus, the judgments make it clear that besides demolition, there would also be monetary/penal consequences if construction is in violation of building byelaws. This also sends a message to homebuyers that they need to be careful while choosing to invest in a housing project,” he said.
Elaborating on the options available to buyers in case the amount is not refunded to them, Abhishek Tripathi, Managing Partner, Sarthak Advocates and Solicitors, told Moneycontrol that typically when an order is issued by the Supreme Court, the expectation is that the party against whom the directions were issued complies with it voluntarily. If that does not happen, the aggrieved party can initiate contempt proceedings and move the Supreme Court for the necessary directions. The court can then order attachment of the properties of the builder or ask the builder to deposit the amount in the court registry.
