On Tuesday, the Supreme Court of India came down hard on the high-profile real-estate developer Amrapali Group for allegedly cheating buyers in seven realty projects located in Noida and Greater Noida.
The court cancelled the group’s registration, accusing it of diverting money from buyers to business purposes other rather than to complete the projects for which the funds had been collected. “It is a shocking and surprising state of affairs that such large-scale cheating has taken place and middle and poor class home buyers have been duped and deprived of their hard-earned money and lifetime savings and some of them had taken a loan from the bank and they are not getting houses,” the court said, as it ordered an investigation by the Enforcement Directorate.
This part of the judgement is unremarkable. It is the court’s job to punish fraud. However, the order also then went on to take far more direct steps. It appointed a government-run company, the National Buildings Construction Corporation, to complete the construction of the flats. The court also vested the rights of the land with a court receiver, who will raise money using its newly acquired rights to fund construction.
It is this second part of the order that is a problem.
Nationwide problem
Stalled real-estate projects are a phenomenon across India. According to one estimate, approximately 7.5 lakh units are either delayed or stalled. Just the Noida and Greater Noida area has nearly 1.5 lakh delayed units.
The court’s solution to directly take over a delayed project and directing its completion using government resources clearly cannot be applied to such a large number of units.
Moreover, real estate is just one sector in which there is malfeasance. Directing government help in compensating victims in all cases of economic fraud is completely untenable.
By making such an arbitrary exception in the case of the victims of the Amrapali wrangle, the courts have violated the principle of equal justice under the law – a disturbingly common trend in the courts of late.
This is also an example of a trend where courts are now increasingly taking on the role of the executive, becoming administrators or framing policy. Of late, the higher judiciary tackled executive projects ranging from the National Register of Citizens – which created a framework for evaluating Indian citizenship in Assam and implemented it on the ground – to what type of buses the Delhi government can buy. In 2017, the Supreme Court even decided to run the administration for India’s cricket board, appointing a four-member panel.
This diversion is made all the more egregious given that courts in India suffer from a crushing backlog of cases. Indian citizens face delays that are so long that approaching the Indian legal system is in itself a daunting proposal.
It is unfortunate that in a situation where courts are unable to perform their primary task of dispute resolution, the judiciary is overreaching into areas that were not its to begin with.
