The Himachal Pradesh High Court held that recovery proceedings initiated to enforce a final order passed by the Real Estate Regulatory Authority cannot be halted merely because the land related to the real estate project later vested in the State Government through separate revenue proceedings. The Court emphasized that once a RERA order granting monetary relief becomes final, the authorities are required to enforce it strictly through the statutory recovery mechanisms provided under the law. The Court clarified that such recovery proceedings cannot be suspended or discontinued on the ground that the land involved in the dispute subsequently became the property of the State.
The Court made it clear that the statutory process for recovering arrears must be followed in its entirety when such procedures are prescribed by law. The Court observed that when a statute specifically provides the mechanism for recovery of dues, authorities are obligated to strictly adhere to that mechanism without deviation. The judgment reinforced the principle that the implementation of legally binding orders cannot be undermined by later developments concerning the property involved in the dispute.
The matter arose from a dispute involving a homebuyer who had booked a housing unit in a real estate project named “Aamoksh @ Kasauli.” The housing unit was booked for a total consideration of eighty-eight lakh rupees. An agreement to sell was executed between the parties in 2015, following which the buyer paid a substantial portion of the agreed consideration amounting to seventy-eight lakh four hundred ninety-one rupees. Despite receiving the payments, the promoters of the project failed to deliver possession of the housing unit to the buyer within the expected time frame.
Aggrieved by the failure of the promoters to deliver possession of the property, the buyer approached the Himachal Pradesh Real Estate Regulatory Authority and filed a complaint seeking appropriate relief. After considering the matter, the regulatory authority allowed the complaint and directed the promoters to refund the amount paid by the buyer. The order of the authority required the promoters to return the money paid by the complainant along with the applicable interest.
However, the promoters did not comply with the order passed by the regulatory authority. Due to the failure of the promoters to implement the directions of the authority, the Himachal Pradesh Real Estate Regulatory Authority initiated steps to enforce the order through statutory recovery proceedings. In accordance with the provisions of the Real Estate (Regulation and Development) Act, the authority issued a recovery order under Section 40(1) of the Act. This provision states that if a promoter fails to pay any interest, penalty, or compensation imposed by the authority, the amount can be recovered as arrears of land revenue.
Following the issuance of the recovery order, the matter was transmitted to the revenue authorities for enforcement. Recovery proceedings were initiated through the office of the Tehsildar in Solan district. These proceedings were intended to recover the amount payable under the order of the regulatory authority in accordance with the procedure applicable to recovery of land revenue arrears.
Despite the initiation of the recovery process, the proceedings were subsequently placed on hold in September 2023. The reason cited for halting the recovery proceedings was that the land related to the project had been ordered to vest in the State Government through separate proceedings conducted under the Himachal Pradesh Tenancy and Land Reforms Act. According to those proceedings, the District Collector had passed an order directing that the land in question be vested in the State Government.
The order vesting the land in the State Government created a situation in which the revenue authorities decided not to proceed further with the recovery process. On this basis, the execution of the recovery order issued by the Real Estate Regulatory Authority was effectively halted. As a result, the complainant who had obtained the order from the regulatory authority did not receive the refund that had been directed.
Faced with the suspension of the recovery proceedings, the complainant approached the Himachal Pradesh High Court by filing a writ petition. The petition sought a direction from the Court requiring the authorities to implement and execute the order passed by the Real Estate Regulatory Authority. The petitioner argued that the recovery proceedings could not legally be suspended merely because the project land had been vested in the State Government through separate proceedings.
The High Court examined the provisions of the Real Estate (Regulation and Development) Act while considering the petition. The Court specifically referred to Section 40 of the Act, which deals with the recovery of interest, penalty, or compensation imposed by the regulatory authority. Under this provision, if a promoter fails to comply with the order of the authority, the amount payable under the order becomes recoverable as arrears of land revenue.
The Court reiterated that the statutory scheme clearly provides a mechanism for enforcement of orders passed by the regulatory authority. Once such an order has attained finality and the promoter fails to comply with it, the authorities are required to recover the amount in accordance with the procedure prescribed for the recovery of land revenue dues. The Court noted that the order passed by the regulatory authority directing refund had not been challenged and had therefore attained finality.
While addressing the issue raised by the revenue authorities regarding the vesting of the land in the State Government, the Court observed that this development could not justify stopping the recovery process. The Court stated that the mere fact that the land involved in the project had subsequently vested in the State Government did not affect the enforceability of the monetary relief granted by the regulatory authority. According to the Court, the vesting of the land could not be used as a ground to suspend or abandon the recovery proceedings initiated under the statutory provisions.
The Court further explained that when a statute lays down a specific procedure for recovery of dues, that procedure must be followed meticulously. Authorities responsible for implementing such recovery cannot depart from the prescribed process. The Court emphasized that once the recovery order had been issued under the relevant statutory provisions, the authorities were under an obligation to pursue the recovery in accordance with law.
In examining the statutory framework governing recovery of arrears of land revenue, the Court noted that the revenue laws provide several mechanisms for recovering outstanding amounts from defaulters. These mechanisms include various steps that can be taken to ensure that the amount due under the order is recovered through lawful means. The Court highlighted that the statutory provisions allow the authorities to proceed against the assets of the defaulter in order to realize the amount due.
The Court also took note of the fact that the recovery proceedings had remained pending without progress for a considerable period of time. The inaction on the part of the authorities in pursuing the recovery process was found to be inconsistent with their statutory obligations. The Court emphasized that authorities entrusted with implementing recovery orders must act in accordance with their legal duties and ensure that the process is carried forward to its logical conclusion.
After examining the facts of the case and the relevant statutory provisions, the High Court concluded that the recovery proceedings initiated pursuant to the order of the Real Estate Regulatory Authority could not be halted on the basis of the subsequent vesting of the project land in the State Government. The Court held that the order of the regulatory authority had attained finality and must therefore be enforced in accordance with the procedure prescribed by law.
The Court reiterated that the statutory recovery process must be implemented fully and strictly. Authorities responsible for executing such orders cannot deviate from the prescribed procedure or suspend the recovery on grounds that are not recognized under the statute. The Court made it clear that the subsequent change in the status of the project land did not nullify the monetary liability arising from the order of the regulatory authority.
Accordingly, the Court directed that the recovery proceedings must continue and be carried forward in accordance with the statutory provisions governing recovery of arrears of land revenue. The judgment reaffirmed that orders passed by the Real Estate Regulatory Authority granting compensation or refund must be enforced through the legally established recovery mechanisms, and such enforcement cannot be obstructed by later developments concerning the property involved in the dispute.
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