HC stays NCDRC order of 3-year jail to Supertech MD, directs Rs 50 lakh be paid to home buyer

The realty firm was directed to deposit Rs 50 lakh out of the outstanding Rs 1.75 crore, in the home buyer's account within a week to show its bona fide to the court

The Delhi High Court Friday stayed an order of the National Consumer Disputes Redressal Commission (NCDRC) sentencing Supertech’s MD Mohit Arora to 3-year imprisonment and issuing an arrest warrant against him for non-compliance with an order in a case by a home buyer.

Justice Amit Bansal directed the realty firm to deposit Rs 50 lakh, out of the outstanding Rs 1.75 crore, in the home buyer's account within a week to show its bona fide to the court.

The NCDRC order, to the extent that the company's MD is sentenced to 3-year imprisonment, shall remain stayed till the next date of hearing - October 4.

The court also directed both the company and the home buyer to place on record the statement of the amount due as per the NCDRC order.

The high court was hearing Supertech's plea challenging the September 20 order by which Arora was given 3-year jail and the arrest warrant was issued against him for non-compliance with NCDRC directions.

The NCDRC case pertained to the home buyer's complaint about the delay in giving possession of a villa in one of the company's projects in Yamuna Expressway Industrial Development Area, which was allotted for over Rs 1 crore.

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 matters in case of default by the company.

The MD was sentenced without even conducting a trial, he said, added, “so the man goes to jail if the company does not comply with the order in seven days”.

The plea was opposed by home buyer 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.

Advocate Shailesh Madiyal, appearing for Batra, 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.

During the hearing, Supertech’s counsel offered to pay Rs 40 lakh to the home buyer within a week to show bona fide, however, the complainant’s counsel said it was too small.

The court then directed the company to deposit Rs 50 lakh within a week after which it will again hear the matter and added that substantial money has to come back.

The high court was earlier informed that the arrest warrant was issued on September 20 by the NCDRC which had on September 13 rejected Supertech's plea for fixing 12-month instalments for payment of the decretal amount.

In April 2019, the NCDRC had ordered the company to either give possession of the villa within six months, along with compensation and costs or refund the entire amount received by it along with compensation.

On July 20, the MD had assured the NCDRC that the order would be complied with within 60 days.

However, on September 20, NCDRC noted that in spite of the commitment, the order was yet to be implemented and opined that the company was “evading the implementation of the decree”.

It had thus issued an arrest warrant against the MD and sentenced him to three years imprisonment subject to the implementation of the order within a week.

“In view of non-compliance of the direction and dishonouring his own commitment, we sentence the MD of the Judgement Debtor company, as per powers under Section 27 of the Consumer Protection Act, 1986, for three years imprisonment and issue warrants of arrest against the managing director of the Judgment Debtor company. The warrants shall not be executed, if the Judgment Debtor deposits the decretal amount before this Commission within one week,” it had said.

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