Delhi High Court on September 24 directed Supertech to deposit Rs 50 lakh, out of the outstanding Rs 1.79 crore, in the homebuyer's account within a week to show its bona fide to the court and stayed an order of the National Consumer Disputes Redressal Commission (NCDRC) until October 4 that had sentenced Supertech's managing director Mohit Arora to a three-year imprisonment.
Justice Amit Bansal directed the real estate firm to deposit Rs 50 lakh, out of the outstanding Rs 1.79 crore, in the homebuyer's account within a week to show its bona fide to the court. The NCDRC order sentencing Arora to a three year imprisonment will remained stayed until October 4, the next date of hearing, Justice Amit Bansal said.
The court has also directed Supertech and the buyer to place on record the statement of amount due as per the NCDRC order.
“In order to show its bona fide to the Court, the petitioner company is directed to pay a sum of Rs.50,00,000/- to the respondents within 1 week from today. The impugned order directing imprisonment of the Managing Director of the petitioner company shall remain stayed till the next date of hearing. List the matter on 4 th October, 2021. In the meantime, both parties shall supply to the Court a statement of account showing the amounts due to the respondents from the petitioner company in terms of judgment dated 11th April, 2019 passed by the NCDRC,” the High Court order, a copy of which is with Moneycontrol, said.
NCDRC had on September 20 also issued an arrest warrant against Arora for non-compliance of an order in a case filed by a homebuyer who had bought a villa in the builder’s Greater Noida project.
Senior advocate Sandeep Sethi, representing Supertech, argued that the NCDRC order was beyond the provisions of section 27 of the Consumer Protection Act and there was no provision it which casts vicarious liability on the MD to make him liable in criminal or civil matter in case of default by the company.
The MD was sentenced without even conducting a trial, he said, adding “so the man goes to jail if the company does not comply with the order in seven days.”
Sandeep Sethi, senior counsel appearing on behalf of Supertech “submits that the impugned order passed by the NCDRC is beyond the scope of Section 27 of the Consumer Protection Act, 1986 (Act) and is therefore, unsustainable. It is further submitted that there are no provisions in the Act which cast a vicarious liability on the Managing Director of the company to make him liable for criminal or civil matters in respect of defaults of the company,” the order said.
The plea was opposed by homebuyer Kanwal Batra's counsel who said the company was in repeated default of the NCDRC order and has gone back on its undertaking to the forum.
“Counsel appearing on behalf of the respondents on advance notice opposes the present petition and states that the petitioner company has been in repeated defaults of the various orders passed by the NCDRC and has repeatedly gone back on its undertakings even before the NCDRC,” the order said.
“Senior counsel appearing on behalf of the petitioner company offers to deposit Rs.40,00,000/- before the Court within one week from today to show the bona fide of the petitioner company. Counsel appearing on behalf of the respondents submits that more than Rs.1,79,00,000/- is due as on date to the respondents from the petitioner company,” it said.
The high court was hearing Supertech's plea challenging the September 20 order by NCDRC.
The NCDRC had on September 20 sentenced Arora to three years in jail for not refunding homebuyer Brigadier (retired) Kunwal Batra and his daughter Ruhi Batra after it failed to hand over the villa property they had bought in the Supertech Upcountry project in December 2013.
The Commission had also issued an arrest warrant against Mohit Arora for not showing up in court and directed that its order shall come into effect after seven days if the builder failed to deposit Rs 1.79 crore by that time.
The Commission in its order had also said that in view of the non-compliance and dishonouring of his commitment, Arora was being sentenced to three years in jail under Section 27 of the Consumer Protection Act, 1986 and an arrest warrant was being issued against him. It had said that the warrant would not be executed if the said amount was deposited within a week.
On August 31, the Supreme Court had ordered demolition of Supertech's 40-storey twin towers in Noida over grave violation of building norms.