Page 21 - BANKING FINANCE APRIL 2024

LEGAL UPDATE

Legal

HC: Co-promoter also li- fications for many redevelopment any message in a WhatsApp group
projects in the city, said legal experts. does not come in any provision of the
able to pay refund in flat conduct rules.
Justice S V Marne focused on a legal
delayed issue - whether a promoter who has
Bombay HC has held that the term not received any payment from an al- NFRA to look at feasibility
'promoter' covers a co-promoter even lottee can be made liable for giving of ranking auditors
if he hasn't got money from flat buy- refund with interest under Section 18 National Financial Reporting Authority
ers and is jointly liable under Real Es- of Rera. Wadhwa Group Housing had (NFRA) chief Ajay Bhushan Prasad
tate (Regulatory and Development) challenged joint liability on it as a co- Pandey said the agency will assess the
Act (Rera) to refund the amount, with promoter for having joined in as co- feasibility of ranking auditors on quali-
interest, for delays. developer in an SRA project in Andheri. tative parameters and auditors ranking
It said under the 2016 Act, which came HC: Can't act against govt companies on governance matters.
into effect in 2017, 'promoter' has Besides, he said, the agency respon-
"been so widely defined that it virtu- official for private WA sible for assessing auditors or listed and
ally includes every person associated message large companies, will work with the
with construction of the building", and Institute of Chartered Accountants of
Madhya Pradesh HC has held that dis-
it is not necessary that there has to be India and corporate affairs ministry
ciplinary action cannot be taken
an agreement between every pro- against an employee for uploading about responsibility of auditors around
moter and a flat buyer. posts in a private WhatsApp group. fraud, which is an area of concern
"Even a person who is merely an inves- "Any message in the form of text, since the guidance issued on the issue
tor (along with promoter) in the photo or video sent in a WhatsApp has not been very helpful.
project" and benefits from it falls group is confined to the members of Addressing a conference, Pandey said,
within the ambit of 'promoter', it said the group. It cannot be said that the NFRA, which has reviewed and recom-
while hearing an appeal by Wadhwa message had been made public," ob- mended 45 proposals of ICAI on new
Group Housing Pvt Ltd against an Oct served Justice Vivek Rusia. standards or amendments to existing
2022 order of Rera appellate tribunal HC allowed the petition of ID Makrani ones, is working closely with the
that had fastened it with the refund against his suspension and chargesheet agency to ensure standards are closely
liability. for forwarding an alleged "objection- aligned with global levels.
HC's Feb 26 order has stirred real es- able political" message in the "Auditors are critical gatekeepers in
WhatsApp group of employees in
tate industry, said lawyers, as it an- financial information supply chain of
swers a substantial question of law Alirajpur district. public interest entities. Value of inde-
that many were tracking. It has rami- The court order said that forwarding pendent auditors report is not in doubt

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