Supreme Court Rejects Recall of Order on Noida/Greater Noida Builders’ Interest Rates: Bikram Chatterji & Ors. vs. Union of India & Ors. (28 February 2023)

Introduction

Date of the Judgment: 28 February 2023

Citation: (Not Available in Source)

Judges: Justice Ajay Rastogi and Justice Bela M. Trivedi

Can a court recall its own order just because some parties are unhappy with it? The Supreme Court of India recently addressed this question when various builders in Noida and Greater Noida sought to overturn an order that had cancelled interest rate reductions previously granted to them. The core issue revolved around whether the court should reinstate its earlier interim orders that had reduced interest rates for these builders. This judgment clarifies the court’s position and reinforces the finality of its decisions.

Case Background

The case originated from a series of writ petitions filed by homebuyers against the Amrapali Group of Companies, a real estate developer in Noida and Greater Noida. These homebuyers had booked flats between 2010 and 2014, making payments ranging from 40% to 100% of the total cost. However, the Amrapali Group failed to deliver the promised flats, allegedly siphoning off the homebuyers’ money.

The Supreme Court intervened to protect the homebuyers’ interests. In a judgment dated 23rd July 2019, the Court cancelled the registration of the Amrapali Group under the Real Estate (Regulation and Development) Act, 2016 (RERA), and also cancelled the lease deeds granted to the group by the Noida and Greater Noida authorities. The Court appointed the National Buildings Construction Corporation (NBCC) to complete the stalled projects and appointed a Court Receiver to oversee the process.

Subsequently, other builders, including Ace Group of Companies, sought similar relief, requesting a reduction in interest rates charged by the Noida and Greater Noida authorities, similar to the relief extended to the Amrapali Group. The Supreme Court initially granted these reductions through interim orders. However, these interim orders were later recalled by the Supreme Court on 7th November 2022. This recall led to the current batch of applications seeking to reinstate the earlier interest rate reductions.

Timeline

Legal Framework

The judgment primarily revolves around the Supreme Court’s inherent powers to review and recall its own orders, particularly in the context of ongoing proceedings. The court also considers the implications of its orders on various parties, including the homebuyers, the Amrapali Group, and other builders in Noida and Greater Noida.

Arguments

The applicant builders argued that the Supreme Court’s order dated 7th November 2022, which recalled the earlier orders granting interest rate reductions, was unjustified. They contended that:

• The earlier orders were passed after hearing all parties and considering the available records.
• The State of Uttar Pradesh had issued a notification on 9th June 2020, reducing interest rates for builders due to the COVID-19 pandemic, which the court should consider.
• If the Amrapali Group of Companies was entitled to certain financial benefits, other companies facing similar financial issues should also receive the same benefits.
• The recall of orders was not permissible unless there was a manifest error or mistake.
• One of the orders dated 10th July 2020, which was a clarification of the order dated 10th June 2020, was not recalled and thus should be in force.

The Noida and Greater Noida authorities argued that:

• The initial order dated 10th June 2020, was passed based on an application by Ace Group of Companies, which was not related to the Amrapali Group case.
• The Prateek Group of Companies had completed its projects before the Supreme Court took cognizance of the Amrapali case and still had outstanding dues.
• Other builders who intervened later were not related to the Amrapali Group case and should not receive the same benefits.
• The Supreme Court had the power to recall its interim orders if they were not in the interest of justice.

The builders also argued that the order dated 10th July 2020, which was a clarification of the order dated 10th June 2020, was not recalled, and thus the authorities were obligated to charge interest as per the order dated 10th July 2020.

The builders contended that the recall of the orders was not justified and that they should be entitled to the same financial benefits as the Amrapali Group, especially considering the financial crunch during the COVID-19 pandemic.

The Noida and Greater Noida authorities argued that the builders were trying to take advantage of the Amrapali Group case, and their projects were not related to the issues of the Amrapali Group.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in this judgment. However, the core issue was whether the court should recall its order dated 7th November 2022, which had recalled the interim orders granting interest rate reductions to builders in Noida and Greater Noida.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not cite any specific cases or legal provisions in this judgment. The judgment primarily focused on the court’s inherent power to review and recall its own orders and the specific facts of the case.

Judgment

Treatment of Submissions

Treatment of Authorities

The Supreme Court did not rely on any specific authorities in this judgment. The court’s decision was based on its assessment of the facts and circumstances of the case and its inherent power to review its own orders.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The court’s initial intervention was to secure the interests of homebuyers of the Amrapali Group of Companies.
• The interim applications filed by other builders were not related to the Amrapali Group case.
• The court had already considered the relevant factors while passing the order dated 7th November 2022.
• The court has the power to recall its interim orders if they are not in the interest of justice.

Sentiment Analysis of Reasons

Fact:Law Ratio

The court’s decision was more influenced by the factual aspects of the case, such as the specific circumstances of the Amrapali Group and the lack of connection of other builders to that case. The legal considerations, such as the court’s power to recall its orders, played a secondary role.

Logical Reasoning

The Supreme Court considered the submissions of the builders and the Noida/Greater Noida authorities. However, the court ultimately decided that the interim applications were without substance. The court’s reasoning was based on the fact that the initial intervention was to secure the interests of the homebuyers of the Amrapali Group of Companies, and the interim applications filed by other builders were not related to the Amrapali Group case.

The court also considered the fact that it had already considered the relevant factors while passing the order dated 7th November 2022. The court stated that it has the power to recall its interim orders if they are not in the interest of justice.

The court rejected the argument that the order dated 10th July 2020, was not recalled, stating that it was a clarification of the order dated 10th June 2020, which was recalled by the order dated 7th November 2022.

The court also rejected the argument that the IAs of the builders should be restored and heard on merits, stating that the builders were strangers to the cognizance taken by the court in reference to the Amrapali Group of Companies.

The Supreme Court’s decision was primarily based on the factual context of the Amrapali Group case and the lack of connection between the applicant builders and the original cause. The court emphasized its role in protecting the interests of the homebuyers in the Amrapali case and found no compelling reason to extend the benefits to other builders who were not part of the initial proceedings.

Key Takeaways

• The Supreme Court will not easily recall its orders, especially when they are based on a detailed consideration of the facts and circumstances.
• Builders who are not directly related to the Amrapali Group case cannot claim the same benefits as those extended to the Amrapali Group.
• The Supreme Court’s primary focus remains on protecting the interests of homebuyers.
• Interim orders can be recalled if they are not in the interest of justice.
• The court will not entertain applications from parties who are strangers to the original cause.

Directions

The Supreme Court did not give any specific directions in this judgment. The court simply dismissed the applications of the builders seeking recall of the order dated 7th November 2022.

Specific Amendments Analysis

There is no discussion of any specific amendments in this judgment.

Development of Law

The ratio decidendi of this case is that the Supreme Court will not recall its orders unless there is a compelling reason to do so, and that parties who are not directly related to a case cannot claim the same benefits as those who are. This judgment reinforces the finality of the Supreme Court’s decisions and clarifies that the court’s primary focus remains on protecting the interests of the parties involved in the original cause.

Conclusion

The Supreme Court dismissed the applications filed by various builders seeking to recall its order dated 7th November 2022. The court held that the builders were not related to the Amrapali Group case and were not entitled to the same benefits. The court also stated that it had the power to recall its interim orders if they were not in the interest of justice. This judgment reinforces the court’s commitment to protecting the interests of homebuyers and clarifies that the court will not easily recall its orders.