Case Summary: Daljeet Singh Dhillon vs. Raipur Treasure Island Pvt. Ltd.
Court: Chhattisgarh High Court
Subject: Interplay between SARFAESI Act proceedings and RERA jurisdiction
Key Issue: Whether a bank, having initiated proceedings under Section 13(4) of the SARFAESI Act, 2002, can be impleaded as a party in proceedings before the Real Estate Regulatory Authority (RERA)
Background
In this case, the petitioner, Daljeet Singh Dhillon, had entered into an agreement with Raipur Treasure Island Pvt. Ltd. for the purchase of a real estate property Subsequently, the developer defaulted on a loan, leading the bank to initiate proceedings under Section 13(4) of the SARFAESI Act, 2002, to enforce its security interest over the property The petitioner approached RERA, seeking relief against the developer, and sought to implead the bank as a party to the proceedings.
Court’s Analysis
The Chhattisgarh High Court examined the scope and objectives of the SARFAESI Act and the Real Estate (Regulation and Development) Act, 2016 (RERA. The court noted that while the SARFAESI Act empowers banks to enforce their security interests without court intervention, RERA aims to protect the interests of homebuyers and ensure transparency in the real estate sector.
The court emphasised that the rights of homebuyers under RERA could not be eclipsed by banks’ actions under the SARFAESI Ac. Allowing banks to proceed without considering the claims of allottees would undermine the protective framework established by RER.
Final Judgment
The High Court held that banks initiating proceedings under Section 13(4) of the SARFAESI Act can indeed be impleaded as parties in RERA proceedings. This ensures that homebuyers’ rights are adequately represented and protected, even when financial institutions seek to enforce their security interest.
Key Takeaway
This judgment reinforces the principle that the enforcement actions of banks under the SARFAESI Act must be balanced with the rights of homebuyers under RR. It ensures that financial institutions cannot bypass the protective mechanisms established for allottees in the real estate sector.