Delhi HC stays arrest of Supertech MD till October 4

On September 20, the national consumer commission had sentenced Arora to three years in jail for not refunding a homebuyer after the firm’s failure to hand over possession of his house in Uttar Pradesh’s Yamuma Expressway Industrial Development Area (Yeida) for several years

The Delhi high court on Friday stayed till October 4, the arrest of Supertech’s managing director Mohit Arora on the condition that the real estate developer pays ₹50 lakh to an aggrieved home buyer within a week.

The Delhi HC asked the Supertech MD to ₹50 lakh to the homebuyer within a week (HT Photo)

On September 20, the national consumer commission sentenced Arora to three years in jail for not refunding a homebuyer after the firm’s failure to hand over possession of his house in Uttar Pradesh’s Yamuma Expressway Industrial Development Area (Yeida) for several years.

The commission on Monday issued an arrest warrant against Arora, while directing that its order shall come into effect after seven days if the builder fails to deposit around ₹1.79 crore by then.

Challenging this order, Supertech went to the high court, arguing that the National Consumer Disputes Redressal Commission (NCDRC) acted out of its jurisdiction and did not give the company a chance to present its case.

Justice Amit Bansal of the Delhi high court, however, asked Supertech and Arora to prove their bonafides before their petition could be entertained further.

“Accordingly in order to show bonafide, the petitioner is directed to pay ₹50 lakh within a week. Statement of accounts to be laid before the court… The sentence will be stayed till the next date of hearing,” the judge said in an oral order.

The court stayed the arrest till October 4, but did not stay other parts of the NCDRC’s order.

Arora said the company was exploring all options, including making a refund as per the NCDRC order as well as seeking stay from the high court.

“Since the stay order has been issued by the high court, we will proceed with the case before the high court,” Arora said.

The money ( ₹1.75 crore) is to be paid to Brigadier Kanwal Batra (retired) and his daughter Aakriti Batra, who together bought a villa in Supertech’s Upcountry project, offered by the builder in December 2013 at a cost of approximately ₹1.03 crore, which the builder promised to deliver in August 2014.

Supertech could not give possession of the villa for want of clearances, nor did it comply with the commission’s 2019 judgment to refund the money with interest despite undertakings.

The development comes days after the Supreme Court ordered the demolition of two 40-storey residential towers of Supertech’s Emerald Court project in Noida over grave violation of building norms, which, the court said, was a result of “nefarious complicity” between the Noida authority and the builder.

During the hearing, 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.

“He isn’t personally responsible but has been attributed vicarious liability whereas there is no provision of vicarious liability for offences of other parties.

“When a company is in default, there is no provision to say any MD or some other director will be vicariously liable. Stature must confer that jurisdiction. None of this has been examined but merely on grounds of non-compliance he has been sentenced. The exercise of jurisdiction by the Commission is purportedly wrong and gives the maximum without a trial,” he argued.

Appearing for the complainant, advocate Shailesh Madiyal, counsel for the home buyer Kanwal Batra’s argued that the company was in repeated default of the NCDRC order and has gone back on its undertaking to the forum.

The counsel said every time the company gives an undertaking to NCDRC and then fails to turn up the next time and warrants have to be issued.