9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 651 - HC - Insolvency and BankruptcyCIRP - Seeking Formulation and implementation of a scheme that conclusively addresses the grievances of other home buyers who may not have the capacity to approach courts/forums to seek redressal against builders - Seeking issuance of directions to the Central Government to draft and implement a comprehensive scheme to address the grievances of home buyers availing home loans - grant of full tax benefit from the date of payment of- first instalment of EMI to the Bank to all those home buyers who have taken home loan from the banks but possession of their dream home is delayed due to the fault of the builder. HELD THAT - In SMALL SCALE INDUSTRIAL MANUFACTURES ASSOCIATION VERSUS UNION OF INDIA (UOI) AND ORS. 2021 (3) TMI 1214 - SUPREME COURT , the Apex Court while placing reference to the observation made in PEERLESS GENERAL FINANCE INVESTMENT CO. LTD. VERSUS RESERVE BANK OF INDIA 1992 (1) TMI 337 - SUPREME COURT , proceeded to hold that the courts ought not to supplant themselves for government expert authorities fully competent in the domain of economic and fiscal policy, which in this instance is the RBI. In INTERNET AND MOBILE ASSOCIATION OF INDIA VERSUS RESERVE BANK OF INDIA 2020 (3) TMI 364 - SUPREME COURT , the Apex Court held that directions issued by the RBI are supplemental to the statutory force of the RBI Act, 1934. Statutory directives issued by RBI are done in exercise of powers under Sections 21 and 35A of the Banking Regulation Act, 1949. The master circulars in the counter affidavit sets out extensive detailed norms for lending activities which would include housing loans, for banks to follow and implement. What emerges thus on a reading of the foregoing is that the RBI being a regulatory body is equipped with requisite expertise to advise on and to formulate economic policies, that have a binding effect on the banking system which is backed by statutory force - it is well settled law that while considering matters pertaining to economic policy, courts ought to yield to the wisdom of policy makers who are fully equipped to decide on matters of policy in their domain, and therefore to refrain from exercising powers of judicial review. A perusal of the same shows that a well structured regimen has been created by the RBI which includes guidelines to the various banks on the issue of advancing loans to home buyers. A perusal of the said Master Circular shows that RBI has given advice to various banks as to which all projects should loans be advanced and the precautions which the banks have to take while extending loans. The Master Circular also advices that the quantum of loans which are to be granted by the banks for housing finance and also to maintain loan to value ratio in case of individual housing loans. When the projects proponent defaults in completing a project, it is always open for the banks to approach the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for getting a Insolvency and Resolution Professional appointed and to take measures to ensure that project is revived and the project is completed because the banks are also anxious to recover their money - Other than the remedies in Insolvency and Bankruptcy Code, 2016, it is always open for the home buyers to approach the Real Estate Regulatory Authority (RERA) to ensure that the project is completed. There is a proper regimen available to redress the grievances of a home buyer and also in view of the Master Circular issued by the Reserve Bank of India, no further Orders and directions are required to be passed in the instant petition. The petition is dismissed.
Issues Involved:
1. Issuance of directions to the Central Government to draft and implement a comprehensive scheme for home buyers. 2. Accountability of banks in the delay of real estate projects. 3. Granting tax benefits to home buyers. 4. Provision of free legal aid to home buyers. 5. Framing laws to protect home buyers' interests and punish errant builders. 6. Making banks accountable and prioritizing home buyers in insolvency proceedings. Summary: 1. Issuance of Directions to the Central Government: The Complainant sought the issuance of directions to the Central Government to draft and implement a comprehensive scheme to address the grievances of home buyers availing home loans. The Complainant highlighted the plight of home buyers who have not received possession of their flats but continue to pay EMIs, thus unable to claim tax benefits. The Complainant also alleged that builders misuse the Insolvency and Bankruptcy Code, 2016, to escape payment of dues to home buyers. 2. Accountability of Banks: The Complainant alleged that banks, government, and builders operate as a nexus against public interest, lacking accountability for public money. It was argued that banks should be held responsible for delays in real estate projects as they only sanction loans for verified projects after scrutiny. 3. Granting Tax Benefits: The Complainant prayed for tax benefits from the date of the first EMI payment to the bank, even if the project is delayed, to all home buyers who have taken loans. 4. Provision of Free Legal Aid: The Complainant sought free legal aid for home buyers fighting against builders to save their hard-earned money. 5. Framing Laws to Protect Home Buyers: The Complainant requested the formulation of laws to fully protect buyers' interests and punish errant builders. 6. Making Banks Accountable: The Complainant argued for laws making banks accountable and ensuring that home buyers get their share first from the sale proceeds of builders' properties in insolvency proceedings, as banks should also bear the loss for financing the projects. Respondents' Stance: The Reserve Bank of India (RBI) filed a counter affidavit, stating that borrowers facing financial constraints could approach their lending banks for loan restructuring as per extant norms. The RBI clarified that the sanctioning of loans and their recovery are de-regulated activities, with each bank's board of directors framing their own guidelines within the RBI's directions. The RBI emphasized that it already issued master circulars guiding banks on loan policies, ensuring economic prudence and profitability. Court's Observations: The Court noted that the RBI's master circulars provide a structured regimen for banks regarding housing loans, including due diligence and loan-to-value ratios. The Court highlighted that banks cannot assume the role of builders to complete projects and that home buyers have remedies under the Insolvency and Bankruptcy Code, 2016, and the Real Estate Regulatory Authority (RERA). Conclusion: The Court concluded that there is a proper regimen available to redress home buyers' grievances and that no further orders or directions were required. The petition was dismissed along with any applications. Judgment: The present petition stands dismissed.
|
