Consumer Court's Arrest Order Against Noida Realty Firm Supertech's MD Put On Hold By High Court

On July 20, Supertech's Managing Director had assured the consumer court that the order would be complied with within 60 days. However, on September 20, the consumer court noted that in spite of the commitment, the order was not implemented. An arrest warrant was issued against the firm's MD.

Consumer Court's Arrest Order Against Noida Realty Firm Supertech's MD Put On Hold By High Court

High Court put on hold a consumer court order sentencing property firm Supertech's MD to 3 years in jail

New Delhi:

The Delhi High Court today put on hold an order of the National Consumer Disputes Redressal Commission (NCDRC) sentencing Noida real estate firm Supertech's Managing Director Mohit Arora to 3-year imprisonment and issuing arrest warrant against him for non-compliance of an order in a case by a homebuyer.

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

The NCDRC or counsumer court order, to the extent that the company's Managing Director is sentenced to 3-year imprisonment, shall remain on hold till the next date of hearing - October 4, the high court said.

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

The high court was hearing Supertech's plea challenging the September 20 order by which Mohit 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 homebuyer's complaint for delay in giving possession of a villa in one of the company's project in Yamuna Expressway Industrial Development Area, which was allotted for over Rs 1 crore.

Senior advocate Sandeep Sethi, representing Supertech, argued that the consumer court 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 matter in case of default by the company.

The Managing Director 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 homebuyer 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 Mr Batra, said every time the company gives an undertaking to the consumer court 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 homebuyer 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 or consumer court which had on September 13 rejected Supertech's plea for fixing 12-month installments for payment of the decretal amount.

In April 2019, the NCDRC or consumer court 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 Managing Director had assured the consumer court that the order would be complied with within 60 days.

However, on September 20, the consumer court 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 Managing Director and sentenced him to three years imprisonment subject to the implementation of the order within a week.
 

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