Bombay High Court
Runwal Constructions Registered … vs Bharat Shah on 8 June, 2026
Author: Madhav J. Jamdar
Bench: Madhav J. Jamdar
SA 251.2022.doc 29.12
Shraddha/Sonali/Arjun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
SECOND APPEAL NO.251 OF 2022
WITH
CIVIL APPLICATION NO.288 OF 2019
IN
SECOND APPEAL NO.251 OF 2022
WITH
CIVIL APPLICATION NO.1529 OF 2018
IN
SECOND APPEAL NO.251 OF 2022
WITH
CIVIL APPLICATION NO.40 OF 2022
IN
SECOND APPEAL NO.251 OF 2022
Digitally
signed by
WITH
SHRADDHA
SHRADDHA KAMLESH
KAMLESH TALEKAR
TALEKAR Date:
CIVIL APPLICATION (ST) NO.5789 OF 2019
2026.06.08
15:38:39
+0530
IN
SECOND APPEAL NO.251 OF 2022
Runwal Constructions Registered Partnership ...Appellant/
Firm Applicant
Versus
Bharat Shah ...Respondent
WITH
SECOND APPEAL NO.253 OF 2022
WITH
CIVIL APPLICATION NO.1526 OF 2018
IN
SECOND APPEAL NO.253 OF 2022
WITH
CIVIL APPLICATION NO.41 OF 2022
IN
SECOND APPEAL NO.253 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Nitin Korgaonkar ...Respondent
1
SA 251.2022.doc 29.12
WITH
SECOND APPEAL NO.254 OF 2022
WITH
CIVIL APPLICATION NO.1521 OF 2018
IN
SECOND APPEAL NO.254 OF 2022
WITH
CIVIL APPLICATION NO.42 OF 2022
IN
SECOND APPEAL NO.254 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Pravir Karmokar ...Respondent
WITH
SECOND APPEAL NO.255 OF 2022
WITH
CIVIL APPLICATION NO.43 OF 2022
IN
SECOND APPEAL NO.255 OF 2022
WITH
CIVIL APPLICATION NO.1530 OF 2018
IN
SECOND APPEAL NO.255 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Garfield Deepak D'Souza ...Respondent
WITH
SECOND APPEAL NO.256 OF 2022
WITH
CIVIL APPLICATION NO.44 OF 2022
IN
SECOND APPEAL NO.256 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Satish Kumar & Ors. ...Respondents
WITH
2
SA 251.2022.doc 29.12
CIVIL APPLICATION NO.1532 OF 2018
IN
SECOND APPEAL NO.256 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Applicant
Mumbai
Versus
Srinivasan Sundaresan & Ors. ...Respondents
WITH
SECOND APPEAL NO.257 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant
Mumbai
Versus
Satish Maruti Shirsekar ...Respondents
WITH
INTERIM APPLICATION NO.3352 OF 2019
IN
SECOND APPEAL NO.257 OF 2022
Satish Maruti Shirsekar ...Applicant
Versus
Runwal Constructions ...Respondent
WITH
CIVIL APPLICATION NO.45 OF 2022
IN
SECOND APPEAL NO.257 OF 2022
WITH
CIVIL APPLICATION NO.1523 OF 2018
IN
SECOND APPEAL NO.257 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Applicant
Mumbai
Versus
Satish Maruti Shirsekar ...Respondents
WITH
SECOND APPEAL NO.258 OF 2022
WITH
CIVIL APPLICATION NO.46 OF 2022
IN
3
SA 251.2022.doc 29.12
SECOND APPEAL NO.258 OF 2022
WITH
CIVIL APPLICATION NO.1531 OF 2018
IN
SECOND APPEAL NO.258 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Sudhir Ray ...Respondent
WITH
SECOND APPEAL NO.259 OF 2022
WITH
CIVIL APPLICATION NO.47 OF 2022
IN
SECOND APPEAL NO.259 OF 2022
WITH
CIVIL APPLICATION NO.1524 OF 2018
IN
SECOND APPEAL NO.259 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Prachi Chindarkar ...Respondent
WITH
SECOND APPEAL NO.260 OF 2022
WITH
CIVIL APPLICATION NO.48 OF 2022
IN
SECOND APPEAL NO.260 OF 2022
WITH
CIVIL APPLICATION NO.1527 OF 2018
IN
SECOND APPEAL NO.260 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Samira Sultana Halim Mohammed ...Respondent
WITH
SECOND APPEAL NO.261 OF 2022
4
SA 251.2022.doc 29.12
WITH
CIVIL APPLICATION NO.1528 OF 2018
IN
SECOND APPEAL NO.261 OF 2022
WITH
CIVIL APPLICATION NO.49 OF 2022
IN
SECOND APPEAL NO.261 OF 2022
Runwal Constructions Runwal & Omkar Esquare, ...Appellant/
Mumbai Applicant
Versus
Parag Chandrakant Sawant & Anr. ...Respondents
_______________________________________________________________
Mr. Atul Damle, Senior Advocate with Mr. Ditendra Mishra,
instructing Advocate, for the Appellants in SA No.260 of 2022.
Mr. Rajiv Chavan, Senior Advocate with Mr. Ditendra Mishra, for the
Appellants in SA No.253 of 2022.
Mr. Ashish Kamat, Senior Advocate with Mr. Ditendra Mishra,
instructing Advocate, for the Appellants in SA No.251 of 2022.
Mr. Saket Mone with Mr. Ditendra Mishra, for the Appellants in SA
Nos.256 of 2022 and 258 of 2022.
Mr. Rubin Vakil, Advocate with Mr. Ditendra Mishra, for the
Appellants in SA No.254 of 2022.
Mr. Ditendra Mishra with Mr. Abhishek Puranik, Mr. Prerith Menon,
Mr. Dhiraj Kanade, for the Appellants in SA Nos.255 of 2022, 257 of
2022, 259 of 2022 and 261 of 2022.
Mr. Anjani Kumar Singh i/b Ms. Asmita S. Jaiswal, for the
Respondent(s) in SA No.251 of 2022, SA Nos.253 of 2022 to SA 261
of 2022 and connected Civil/Interim Application(s).
_____________________________________________________________
CORAM: MADHAV J. JAMDAR, J.
RESERVED ON: 29 JANUARY 2026
PRONOUNCED ON: 08 JUNE 2026
JUDGMENT :
1. Heard Mr. Atul Damle, learned Senior Counsel, Mr. Ashish Kamat,
learned Senior Counsel, Mr. Rajiv Chavan, learned Senior Counsel, Mr.
5
SA 251.2022.doc 29.12
Sanket Mone, learned Counsel, Mr. Rubin Vakil, learned Counsel and
Mr. Ditendra Mishra, learned Counsel, appearing for the Appellants and
Mr. Anjani Kumar Singh, learned Counsel appearing for the
Respondents.
2. The challenge in this group of 10 Second Appeals is to the Order
dated 1st November 2018 passed by the learned President, Maharashtra
Revenue Tribunal, Mumbai and Incharge, Maharashtra Real Estate
Appellate Tribunal, Mumbai (“Designated Appellate Tribunal”) in
respective individual Appeals filed by the respective
Respondents/Allottees. The challenge before the learned Designated
Appellate Tribunal was to the Orders dated 2 nd April 2018 passed by the
Competent Authority in all these Appeals except one Appeal where the
challenge was to the Order dated 21st May 2018 passed by the
Competent Authority. The details of the same are set out hereinbelow.
Sr. Second Name of the Order Complainant No. Appeal No.
no. Appeal no. Respondent passed by before
the there
Authority Appellate
Tribunal
1 251/2022 Bharat Shah 21/05/2018 CC006000000023853 AT0060000
00010474
2 253/2022 Nitin 02/04/2018 CC006000000001623 AT0060000
Korgaonkar 00000317
3 254/2022 Pravair 02/04/2018 CC006000000023486 AT0060000
Karmokar 00000289
4 255/2022 Garfield 02/04/2018 CC006000000012039 AT0060000
Deepak
00000297
Dsouza
6
SA 251.2022.doc 29.12
5 256/2022 Sathish 02/04/2018 CC006000000001257 AT0060000
Kumar and
00000280
Ors
6 257/2022 Satish Maruti 02/04/2018 CC006000000012440 AT0060000
Shirsekar 00000281
7 258/2022 Sudhir Ray 02/04/2018 CC006000000012486 AT0060000
00010556
8 259/2022 Prachi 02/04/2018 CC006000000012460 AT0060000
Chindarkar
00000287
9 260/2022 Samira 02/04/2018 CC006000000012589 AT0060000
Sultana
00000279
Halim
Mohammed
10 261/2022 Parag 02/04/2018 CC006000000012466 AT0060000
Chandrakant
00000301
Sawant and
Anr
3. The relief sought in various complaints before the Competent
Authority by various Complainants i.e. Allottees is inter alia seeking
direction to pay interest for delayed possession. The Competent
Authority has held that the time period which can be attributed to the
Appellants for delay in handing over possession can neither be
ascertained nor the date of handing over possession can be determined
at that stage. The Competent Authority inter alia passed following
directions:-
“4. In view of the above, the Respondent is hereby again
directed to make serious efforts to expedite the process of
obtaining the required sanctions/approvals for
recommencing the project work at the earliest and to
complete the construction work of the said project in a
time-bound manner. Respondent shall also not unilaterally
execute any cancellations in the said project, with respect
7
SA 251.2022.doc 29.12
to the Complainants in the present complaint.
5. Consequently, the matters are disposed of.”
4. The respective Complainants/Allottees challenged the Order of
the Competent Authority by filing respective Appeals before the Real
Estate Appellate Tribunal. The learned Designated Appellate Tribunal
inter alia passed following operative Order :
“2. The Promoter / Respondent to pay interest to the
Allottees @ 10.05% p.a. effective from 1st February 2014
till handing over actual possession.
3. The Promoter/ Respondent to complete Building B1
and B2 in the registered project within 18 months from
Order. Failure, to follow action and consequences in terms
of Section 7 of RERA.”
5. At this stage, it is required to be noted that the impugned Orders
are challenged by the original Respondent i.e. Promoter by filing these
Second Appeals and not by the original Complainants/ Allottees. Thus,
original Complainants/Allottees have accepted the Order of the learned
Designated Appellate Tribunal. This is specifically mentioned since as
per Agreement executed between the parties, the date of handing over
possession is 2008 to 2010, however learned Designated Appellate
Tribunal extended the said date till 1st February 2014.
6. This Court, by Order dated 12th December 2024 framed following
substantial questions of law and an additional substantial question of
8
SA 251.2022.doc 29.12
law was framed by Order dated 7th April 2025. The same are as under:-
SUBSTANTIAL QUESTIONS OF LAW FRAMED BY ORDER DATED
12TH DECEMBER 2024 :
1. When the Agreement for Sale between the Promoter and
the Allottee makes provision for force majeure events,
which have the effect of postponing the agreed date of
possession, can authorities under RERA fix / provide for a
date of possession while adjudicating claims under Section
18 of RERA?
2. Whether the authorities under RERA have the power
to determine or rewrite or revise the date of handover of
possession, in exercise of power under Section 18 of RERA?
3. Whether, in exercise of power to designate an
authority as the Appellate Tribunal under the first proviso
to Section 43(4) of RERA, it is necessary for the State
Government to give due regard to the provisions of Section
43(3) of RERA and ensure that the composition of such
alternate authority is in accordance therewith?
4. Whether in exercise of power under the first proviso
to Section 43(4) of RERA, the State Government (as the
delegatee of such power) can designate an authority to
function as the Appellate Tribunal in a manner contrary to
or ultra vires Section 43(3) of RERA?
5. Whether a single member bench of the Hon’ble
Maharashtra Revenue Tribunal, exercising power under the
first proviso to Section 43(4) of RERA has jurisdiction to
adjudicate appeals under Section 44 of RERA?
6. Whether, in light of the second proviso to Section
43(4) of RERA, the Hon’ble Maharashtra Revenue Tribunal
has jurisdiction to adjudicate appeals under Section 44 of
RERA, after the constitution / establishment of the
Maharashtra Real Estate Appellate Tribunal under Section9
SA 251.2022.doc 29.1243 of RERA?
7. Whether the impugned Judgment and Order is
perverse and unreasoned?
ADDITIONAL SUBSTANTIAL QUESTION OF LAW FRAMED BY
ORDER DATED 7TH APRIL 2025 :
1. When agreement in the form of a booking form, gets
frustrated on account of force majeure as well as due to
making its performance impossible, whether such an
agreement can be considered while exercising power under
section 18 of RERA?
Thus, total 8 substantial questions of law were framed by this Court.
7. The substantial questions of law Nos. 1, 2 and 7 framed by Order
dated 12th December 2024 and the substantial question of law framed
by Order dated 7th April 2025 are inter alia depending on the analysis of
factual aspects. The substantial questions of law Nos. 3, 4 and 5 framed
by this Court by order dated 12 th December 2024 are concerning
designation of the Maharashtra Revenue Tribunal by exercise of power
under Section 43(4) of RERA contrary to the mandate of Section 43(3)
of RERA and substantial question of law No.6 is concerning jurisdiction
of Maharashtra Revenue Tribunal to adjudicate Appeal under Section 44
of the RERA after the constitution/establishment of the Maharashtra
Real Estate Appellate Tribunal under Section 43 of the RERA. Therefore,
this Court will take up for consideration substantial question of law
10
SA 251.2022.doc 29.12
No.6 first and thereafter substantial questions of law namely 3, 4 and 5
as both these set of questions of law are relating to the jurisdiction of
the learned Maharashtra Revenue Tribunal to act as the learned
Appellate Tribunal under RERA. Other substantial questions of law will
be considered thereafter.
8. Before setting out and consideration of the rival submissions, it is
required to be noted that all the parties have filed written submissions
on 19th September 2025 and therefore these group of Second Appeals
were adjourned to 6th October 2025 for passing orders. However, on 6 th
October 2025 as the assignment was very heavy, passing of Judgment in
these group of Second Appeals was reserved. While preparing draft
Judgment this Court noticed certain relevant provision as more
particularly set out in Order dated 5th January 2026 which was not
pointed out to this Court by both the parties and therefore, for hearing
the parties on the said issue the matter was again listed from time to
time. Ultimately, the hearing was completed on 29 th January 2026 and
the Judgment was reserved.
FACTUAL ASPECTS:
9. The project ‘Runwal Infinity’ (‘Runwal Sanctuary’) situated at
Nahur, Mulund, Mumbai was launched in the year 2005-2006. The
11
SA 251.2022.doc 29.12
booking of various flats was done by the Respondents i.e. flat
purchasers on different dates between 2005-2007. As far as the
Respondents in eight Second Appeals, their registered agreements were
executed between 2006-2007. As far as the Respondents in Second
Appeal No.253 of 2022 and Second Appeal No.257 of 2022, their
agreements are not registered and only allotment letters are issued to
them. However, they have paid flat cost of about 39.5% and 40.6%
respectively.
10. At this stage it is necessary to set out the relevant details as set
out in the chart submitted by the Appellants:-
Sr. Second Flat Tower Date of Possession Cost of Amount %
no. Appeal No. Agreement date Flat Paid Paid
No. (in Rs.) (in Rs.)
1 251/2022 901/ B2 13.02.2007 31.12.2009 60,75,000 30,37,500 50
902
2 253/2022 1101 C Allotment 31.12.2009 57,61,050 22,50,000 39.1
Letter
21.09.2007
3 254/2022 2004 B2 08.03.2007 31.12.2009 45,77,000 16,51,950 36.1
4 255/2022 103 B2 08.10.2007 31.12.2009 57,03,375 6,04,338 10.6
5 256/2022 601 B1 19.04.2006 31.12.2008 39,55,000 23,73,000 60
6 257/2022 703 C 13.12.2006 31.12.2008 39,30,250 15,96,000 40.6
7 258/2022 1103 B2 27.03.2006 31.12.2009 36,32,000 20,66,000 56.9
8 259/2022 803 B1 03.02.2007 31.12.2008 36,32,000 36,32,000 100
9 260/2022 1203 B2 31.12.2007 31.12.2010 49,94,000 28,25,000 56.6
10 261/2022 1403 B2 07.03.2007 03.12.2009 51,07,500 21,07,500 41.3Thus, one of the Respondent i.e. the Allottee has paid 100% of
the consideration and some of them have paid between 50% to 60% of
12
SA 251.2022.doc 29.12the consideration. In any case, most of the Respondents i.e. the Allottees
have paid substantial consideration towards the purchase of flats to the
Appellant- Promoter about more than 15 years back. The Agreements
are of the year 2006-2007 and the date of handing over possession is of
2008-2010 and till the year 2026 the possession of the respective flats
has not been handed over to the respective Allottees. As far as the
Tower C is concerned, the same has been partly constructed earlier and
thereafter it has been demolished and now it has again being
constructed.
11. The substantial question of law No. 6 framed by Order dated 12 th
December 2024 is treated as First Substantial Question of Law as the
same is concerning jurisdiction of the Maharashtra Revenue Tribunal as
Designated Appellate Tribunal to deal with appeals filed under the Real
Estate Regulation and Development Act, 2016 (hereinafter referred to
as “the RERA”) in view of the notification dated 8 th May 2018. Thus, the
First substantial question of law is reproduced herein below for ready
reference:
FIRST SUBSTANTIAL QUESTION OF LAW :
Whether, in light of the second proviso to Section 43(4) of
RERA, the Maharashtra Revenue Tribunal has jurisdiction
to adjudicate appeals under Section 44 of RERA, after the
constitution / establishment of the Maharashtra Real
Estate Appellate Tribunal under Section 43 of RERA ?
13
SA 251.2022.doc 29.12
SUBMISSIONS OF THE APPELLANTS CONCERNING FIRST
SUBSTANTIAL QUESTION OF LAW:-
12. Learned Counsel of the Appellants raised the following
contentions:
11.1. Learned Counsel pointed out Section 43 of the RERA. Learned
Counsel submitted that sub-Section (1) of Section 43 provides that by
Notification the appropriate government shall establish an Appellate
Tribunal to be known as the Maharashtra Real Estate Appellate
Tribunal. First proviso to sub-Section 4 of Section 43 specifies that until
the establishment of an Appellate Tribunal under said Section,
appropriate government shall designate by order, any Appellate
Tribunal functioning under any law for the time being in force to be the
Appellate Tribunal to hear Appeals under the RERA. Second proviso to
sub-Section 4 of Section 43 provides that after the Appellate Tribunal
under the said section is established, all matters pending with the
Appellate Tribunal designated to hear Appeals shall stand transferred to
the Appellate Tribunal so established and shall be heard from the stage
such Appeal is transferred.
11.2. Learned Counsel pointed out the following factual aspects:
Sr. No. Date Facts/events
1. January 2018 The State Government issued a Notification
14
SA 251.2022.doc 29.12
designating the Hon’ble Maharashtra
Revenue Tribunal under Section 43 of RERA,
in exercise of power under the first proviso
to Section 43(4) of RERA.
2. 02.04.2018 Order passed by the Hon’ble Maharashtra
—————- Real Estate Regulatory Authority which is
21.05.2018 subject matter of the present Second
Appeals.
3. May 2018 The Respondent filed respective Appeals.
4. 08.05.2018 The State Government notified the
constitution of the Hon’ble Maharashtra Real
Estate Appellate Tribunal under Section
43(1) of RERA.
[Note- By virtue of the second proviso to
Section 43(4) of RERA, all appeals before the
Maharashtra Revenue Tribunal stood
transferred to the Maharashtra Real Estate
Appellate Tribunal.]
5. 31.10.2018 The Maharashtra Revenue Tribunal
consisting of Single Judge/Member heard the
arguments in the said Appeal.
6. 01.11.2018 The impugned Order passed by the Hon’ble
Maharashtra Revenue Tribunal.
11.3. It is submitted that as the State Government notified the
constitution of the Maharashtra Real Estate Appellate Tribunal under
Section 43(1) of the RERA by the Notification dated 8 th May 2018, by
virtue of second proviso to Section 43(4) of the RERA, all Appeals
before the Maharashtra Revenue Tribunal stood transferred to the
Maharashtra Real Estate Appellate Tribunal.
11.4. It is thus submitted that when the Maharashtra Revenue Tribunal
heard the arguments on 31st October 2018 and passed the impugned
order on 1st November 2018, the Maharashtra Revenue Tribunal had no
15
SA 251.2022.doc 29.12
jurisdiction, as by the Notification dated 8th May 2018 issued under
Section 43(1) of the RERA, and by virtue of second proviso to Section
43(4) of the RERA, all Appeals before the Maharashtra Revenue
Tribunal stood transferred to the Maharashtra Real Estate Appellate
Tribunal.
11.5. Reliance is placed on the following decisions of the Supreme
Court:
(i) Allahabad Bank v. Canara Bank1 (Paragraphs 13, 21, 24
and 25)
(iii) Sushil Kumar Mehta v. Gobind Ram Bohra3 (Paragraph
Nos.5, 9 and 26)
(iv) B. Premanand v. Mohan Koikal 4
(paragraph Nos.15 and 16)
(v) Basawaraj v. Special Land Acquisition Officer 5 (paragraph
No.12)
(vi) Commissioner of Agricultural Income Tax, West Bengal v.
Sri Keshab Chandra Mandal 6 (paragraph No.27).
(vii) Britnell v. Secretary for Social Security 7
1 (2000) 4 SCC 406
2 (2000) 9 SCC 716
3 (1990) 1 SCC 193
4 (2011) 4 SCC 266
5 (2013) 14 SCC 81
6 (1950) SCC 205
7 (1991) 2 All ER 726
16
SA 251.2022.doc 29.12
11.6. Reliance is also placed on the decision of High Court of
Jharkhand at Ranchi in the matter between Arjun Kumar Singh v. Union
of India 8 and more particularly on paragraph No.4 of the same.
11.7. Reliance is also placed on the decision of National Company Law
Tribunal in the case of Devang Hemant Vyas v. 3A Capital (P) Ltd. 9 and
more particularly on paragraph Nos.54 and 55 of the same.
11.8. It is submitted that on and from 8th May 2018 the Maharashtra
Revenue Tribunal had become functus officio, insofar as all Appeals
filed under Section 44 of the RERA on account of plain language of
Section 43(4) of the RERA and submitted that upon constitution of the
Maharashtra Real Estate Appellate Tribunal on 8 th May 2018 all such
Appeals were transferred to it by operation of Section 43(4) of the
RERA from the Maharashtra Revenue Tribunal.
11.9. It is submitted that the designation of any Tribunal as the
Appellate Tribunal under the RERA under the provisions of the first
proviso to Section 43(4) was merely a temporary provision and cannot
be held to confer jurisdiction beyond the limited time for which such
jurisdiction was conferred on the Maharashtra Revenue Tribunal. It is
submitted that on and from 8th May 2018, the Maharashtra Revenue
8 MANU/JH/686/2014
9 Company Appeal (AT) No.115 of 2022 dated 16/05/2024
17
SA 251.2022.doc 29.12
Tribunal has no jurisdiction to adjudicate any Appeal under Section 44
of the RERA. It is submitted that proviso to sub-Section 43(4) are in the
nature of transitional provisions and required to be so interpreted so as
to facilitate change from one statutory regime to another and the
operation of such provision is expected to be temporary. Such
transitional provisions become spent on all the past circumstances which
it is designed to deal with have been dealt with. It is further submitted
that the transitional provision is not authorized to widen the ambit of
substantive legislation.
11.10. It is a well settled canon of statutory interpretation that any
alleged hardship or inconvenience that may arise out of the
interpretation of a statutory provision cannot alter meaning of the
statute inferred by the legislature if such meaning is clear on the face of
the provision. It is submitted that the language of the proviso to Section
43(4) of the RERA is plain and unambiguous. Accordingly, no contention
about any alleged hardship to the Respondents/Allotteees can be
determinative of its interpretation.
11.11. It is further submitted that a litigant cannot contend that he / she
was remediless since the constitutional jurisdiction of this Hon’ble Court
under Article 226 of the Constitution of India was always available in the
event of any circumstance where immediate remedy / relief was not
available to such litigant.
18
SA 251.2022.doc 29.12
11.12. In any event, the Respondents will suffer no hardship or
inconvenience if this dispute / case is remanded back to the Maharashtra
Real Estate Appellate Tribunal, duly constituted as per Section 43 of the
RERA and deciding the Appellant’s appeal afresh by Maharashtra Real
Estate Appellate Tribunal and delivering a reasoned order.
11.13. It is well settled that the issue of lack of subject matter
jurisdiction can be raised at any point of time. It is submitted that an
order passed by any Tribunal lacking inherent jurisdiction would be
nullity. The principles of estoppel, waiver and acquiescence or even res
judicata which are procedural in nature would have no application in a
case where an order has been passed by the Tribunal/Court which has no
authority in that behalf. Any order passed by the Court without
jurisdiction would be coram non-judice being a nullity and therefore, the
same ordinarily should not be given effect. To substantiate said
contention, reliance is placed on the following decisions of the Supreme
Court :
(i) Sushil Kumar Mehta (supra) (paragraph No. 26)
(ii) Hasham Abbas Sayyad v. Usman Abbas Sayyad10
(Paragraphs 22-24);
(iii) Harshad Chiman Lal Modi v. DLF Universal Ltd. 11
(Paragraphs 29 to 37)10 (2005) 2 SCC 355
11 (2005) 7 SCC 79119
SA 251.2022.doc 29.1211.14. It is submitted that in any event, the Impugned Order was passed
by the Maharashtra Revenue Tribunal without jurisdiction, contrary to
the provisions of Section 43 of the RERA, and thus the Impugned Order
is void and liable to be quashed and set aside.
11.15 Learned Counsel submitted that the statutory provision of Section
43 of RERA is unambiguous and the plain words will have to be given
effect to irrespective of the consequences. The reliance is placed on
decision of the Supreme Court in the case of Nelson Motis v. Union of
India12.
11.16 It is well settled that hardship or inconvenience that may arise
out of the interpretation of a statutory provision cannot alter the
meaning of the language employed by the legislature, if the meaning is
clear from the provisions.
11.17 Rule 8 of the Maharashtra Real Estate Appellate Tribunal
(Members, Officers And Employees) (Appointment And Service
Conditions), Rules 2017 provides that every person appointed as the
Chairperson or Member of the Maharashtra Real Estate Appellate
Tribunal shall, before entering upon office, make him subscribe an oath
of office and secrecy in the forms prescribed thereunder before the
12 (1992) 4 SCC 711
20
SA 251.2022.doc 29.12
persons designated thereunder. The said Rules have been promulgated
in exercise of powers under Section 84(1), 84(2)(v) to 84(2)(z) and
84(2)(zf) of RERA.
11.18 Both section 43 and Rule 8 operate in different spheres. Section
43 deals with the establishment of the Tribunal which is a one-time
event; as against this, Rule 8 would come into play each time that a new
Member/Chairperson is to be appointed. Rule 8 relates to the
administrative procedure of persons appointed in terms of section 84
taking oath. As against this, section 43 relates to an antecedent event of
the Tribunal getting established. There is no overlap, for Rule 8 to have
any bearing qua the event under section 43. This Rule has no nexus to
the establishment of the Appellate Tribunal under Section 43(1) and the
transfer of cases pending before the Maharashtra Revenue Tribunal
[designated under the first proviso to Section 43(4)] to the Appellate
Tribunal so established. The definition of the term ‘Appellate Tribunal’ in
Rule 2(1)(b) of the said Rules in fact refers to the Maharashtra Real
Estate Appellate Tribunal established under Section 43(1) of RERA by
the State Government.
11.19 It is well settled that subordinate legislation can always be only in
aid of the current statute and cannot override the parent statute and no
subordinate legislation can be interpreted in the manner which renders
21
SA 251.2022.doc 29.12
any part of the parent statute otiose or nugatory. Reliance is placed on
the Judgment of the Supreme Court in the decision of Sansera
Engineering Ltd. v. Deputy Commissioner 13 and more particularly on
Paragraphs 10 and 11 of the same.
11.20 Notification dated 8th May 2018 is a notification establishing the
Maharashtra Real Estate Appellate Tribunal under Section 43(1) of
RERA, since the establishment of a Tribunal must precede appointment
of the Chairperson/Members of such Tribunal. There can be no
appointment of the Chairperson/Members before the establishment of
the Appellate Tribunal.
11.21 It is submitted that Section 43(1) of the RERA contemplates
establishment of the Appellate Tribunal, whereas Section 46 of the
RERA relates to appointment of Chairperson/Members. Appointment
under Section 46 can only follow establishment under Section 43(1).
Therefore, Section 46 power can be exercised only upon establishment,
as appointment presupposes establishment under Section 43(1). Thus,
the contention of the Respondent that the said Notification dated 8th
May 2018 is not a notification under Section 43(1) is misconceived and
untenable.
13 2022 SCC Online SC 1635
22
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11.22 The Maharashtra Real Estate Appellate Tribunal has itself
accepted that the Tribunal stood established under the said Notification
dated 8th May 2018, which is evident from its website.
11.23 The Notification dated 24th October 2019 supersedes the said
Notification dated 28th December 2017, whereby the Maharashtra
Revenue Tribunal was designated the Appellate Tribunal until the
Maharashtra Real Estate Appellate Tribunal was set up, and not the said
Notification dated 8th May 2018 whereby the Maharashtra Real Estate
Appellate Tribunal was established.
11.24 It is submitted that if the said Notification dated 24 th October
2019 is treated as the notification of establishment of the Maharashtra
Real Estate Appellate Tribunal, it will lead to absurd results since, for
the period between 24th December 2018 and 24th October 2019, there
would be two Appellate Tribunals, one designated under first proviso to
Section 43(4) of RERA (Maharashtra Revenue Tribunal) and the other
functioning under Section 43(1) of RERA. Thus, the said Notification
dated 24th October 2019 cannot be treated as the Notification under
23
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11.25 A combined reading of the said Notifications demonstrates the
distinction made by the statute between establishment (under Section
43), appointment (under Section 46) and its functioning.
11.26 It is submitted that a plain reading of Section 43(1) and 43(4)
and the provisos appended to Section 43(4) make it clear that upon the
establishment of the Appellate Tribunal by the only method prescribed
under Section 43(1), i.e., by Notification on 8th May 2018, the Appellate
Tribunal stood established and all appeals stood transferred from the
Maharashtra Revenue Tribunal to Maharashtra Real Estate Appellate
Tribunal.
SUBMISSIONS OF THE RESPONDENTS CONCERNING FIRST
SUBSTANTIAL QUESTION OF LAW:
13. On the other hand, Mr. Anjani Kumar Singh, learned Counsel
appearing for the Respondents in all the Second Appeals raised the
following contentions:
12.1 It is submitted that a reply given by letter dated 27 th May 2025 to
one of the flat purchasers by the Housing Department of Maharashtra
Government along with Government Gazette dated 24 th October 2019
specifically makes clear that the Government of Maharashtra
established Maharashtra Real Estate Appellate Tribunal for the State of
Maharashtra and the said Tribunal started functioning w.e.f. 24 th
24
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December 2018. Learned Counsel submitted that even the factual
position as set out by the Appellants in their contentions shows that the
State Government notified the Constitution of the Maharashtra Real
Estate Appellate Tribunal under Section 43(1) of the RERA by
Notification dated 8th May 2018 and the oath ceremony of the
Chairperson and members of the Appellate Tribunal took place on 24 th
December 2018. Thus, it is submitted that the Appellate Tribunal
started functioning only w.e.f. 24th December 2018.
12.2. It is submitted that establishment as contemplated under Section
43 of the RERA includes functional status of the establishment. Reliance
is placed on the definition of “establishment” as defined under Black’s
Law Dictionary. In that behalf it is stated on Page 53 of the written
submissions in Paragraph No.4 as under:-
“4) The definition of “Establishment” is defined under
Black’s Law Dictionary as under: n.1: the act of
establishing, the state or condition of being established. 2:
an institution or place of business. 3: a group of people
who are in power or who control or exercise, great
influence or something. The meaning of the word
“establishment” clearly shows that an established
institution, where a group of the people who are in power
and who control or exercise great influence, which clearly
gives a meaning that the place of institution, which has to
be a “functional” institution. Therefore, mere constitution /
appointment of (permanent) appellate Tribunal as per
order/ notification dated 8th May 2018 does not makes it
“functional” rather, the permanent appellate tribunal only25
SA 251.2022.doc 29.12became “functional” from 24th December 2018, and after
being “functional”, only the automatic transfer was
supposed to be valid and applicable as per the second
proviso of section 43(4). It is submitted that the mandates
of second proviso of section 43(4) never accrued untill 24th
December 2018. The contentions of the appellant are
wholly misconceived, illegal and misleading and not
maintainable. ”
12.3 Reliance is placed on the decision of the Chhattisgarh High Court
in the case of Gold Bricks Infrastructures Pvt. Ltd. v. Sumeet Agrawal 14
and more particularly on paragraph No.24 of the same where
importance of the functionality of the Tribunal was emphasized by the
Chhattisgarh High Court.
12.4 Learned Counsel submitted that the reliance placed by the
Appellant on the mere date of constitution is misplaced. It is submitted
that procedural time-frames for public bodies are directory in nature
unless specific consequences are prescribed. To substantiate said
contention, reliance is placed on the decision of the Supreme Court in
the case of Mohan Singh v. IAAI15.
12.5 It is submitted that the second proviso to Section 43(4) of RERA
envisages automatic transfer of cases only upon the functional
establishment of the Appellate Tribunal. As demonstrated through the
Government Gazette dated 25 October 2019, the tribunal became
14 2023 SCC OnLine Chh 315
15 (1997) 9 SCC 132
26
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functional only on 24 December 2018. Hence, the order of 1st
November 2018 passed by the MRT was valid, subsisting, and within
jurisdiction.
12.6 Section 43 of the RERA provides for the constitution of the Real
Estate Appellate Tribunal. Sub-section (4) thereof contains two
provisos, which are of seminal importance to the present issue. The first
proviso empowers the State Government to designate, until the
establishment of the permanent Appellate Tribunal, any other judicial
authority or tribunal to discharge the functions of the Appellate
Tribunal under the Act. The second proviso to Section 43(4)
categorically stipulates that only “after the Appellate Tribunal under this
section is established”, all matters pending with the designated
Appellate Tribunal shall stand transferred to the permanent Appellate
Tribunal so established, and shall be heard from the stage at which they
stood transferred.
12.7 It is therefore manifest from the plain language of the statute that
the triggering point for “automatic transfer” of matters is the
“establishment” of the permanent Appellate Tribunal. The establishment
of permanent appellate tribunal inherently contains a “functional”
permanent appellate tribunal and not merely the issuance of a
notification dated 8th May 2018 appointing its Chairperson or Members
27
SA 251.2022.doc 29.12
in abstraction from their assumption of office in accordance with law.
The assumption of the Office of the Chairman and members only takes
place in accordance with law on or after the “Oath of the office and
Secrecy” as per rule 8 of the Maharashtra Real Estate Appellate Tribunal
(Members, Officers and Employees) (Appointment and Service
Conditions) Rules, 2017. But, the appellants erroneously argued that
the notification dated 8th May 2018 had established the permanent
Appellate Tribunal and therefore, all the matters pending before the
Maharashtra Revenue Tribunal (designated Maharashtra, Real Estate
Appellate Tribunal) ought to have been transferred on 8 th May 2018 to
the (Notified) Permanent Appellate Tribunal.
12.8 Rule 8 of the 2017 Rules mandates, in unequivocal terms, that
every person appointed as the Chairperson or as a Member of the
Appellate Tribunal shall, before entering upon his or her office, make
and subscribe an “Oath” of Office and Secrecy in Form I and Form II
appended to the said Rules. The requirement of taking the oath is not a
mere procedural formality. It is a substantive statutory condition
precedent for assuming office and for the Tribunal to become legally
functional. Until such “oath” is taken, the permanent Appellate
Tribunal, though constituted on paper, cannot be said to be
28
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“established” or “functional” within the meaning of the second proviso
to Section 43(4) of the RERA.
12.9 The factual chronology, which is not in dispute and stands
conclusively established from official records, is as follows:
(a) By Government Notification dated 28.12.2017, the Maharashtra
Revenue Tribunal (“MRT”) was designated to function as the
Maharashtra Real Estate Appellate Tribunal in exercise of
powers under the first proviso to Section 43(4) of the RERA
(Designated Appellate Tribunal).
(b) The permanent Maharashtra Real Estate Appellate Tribunal,
comprising the Hon’ble Chairperson and Members, was notified
on 8th May 2018.
(c) However, the Oath of Office and Secrecy strictly in accordance
with Rule 8 of the 2017 Rules, took place on 24.12.2018
admittedly as per the annual report relied upon by the
appellants. Accordingly, the Chairman and members have
entered in their office or assumed their office and became
functional on 24th December 2018.
29
SA 251.2022.doc 29.12
(d) The Government of Maharashtra, Housing Department, by
Gazette Notification dated 24.10.2019, expressly declared and
confirmed that “the said Tribunal has been functional with effect
from 24th December 2018”.
(e) The impugned orders under challenge in the present Second
Appeals were passed on 01.11.2018, i.e., prior to 24.12.2018.
12.10 In view of the aforesaid statutory provisions and admitted facts, it
is submitted that:
(a) As on 01.11.2018, the permanent Maharashtra Real Estate
Appellate Tribunal had not become functional, since the
Chairperson and Members had not yet taken the mandatory
Oath of Office and Secrecy under Rule 8 of the 2017 Rules.
Consequently, the condition precedent for the applicability of the
second proviso to Section 43(4) that the Appellate Tribunal “is
established” was not satisfied as on the said date.
(b) The jurisdiction to hear and decide appeals under the RERA,
therefore, continued to vest validly and lawfully in the
Maharashtra Revenue Tribunal, which was functioning as the
30
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designated Appellate Tribunal under the Notification dated
28.12.2017.
(c) The argument of the Appellant regarding “automatic transfer” of
matters is legally unsustainable, as such transfer could operate
only on and from 24.12.2018, and not prior thereto.
(d) It is thus inexorably follows that the impugned orders dated
01.11.2018 were passed by a forum possessing complete
jurisdiction, authority, and competence in law, and are therefore
valid, binding, and immune from challenge.
12.11 In light of the foregoing, the substantial question of law raised by
the Appellants (Question No. 6) is completely illusory and does not, in
fact, arise for consideration. The said question proceeds on an
erroneous assumption that the permanent Appellate Tribunal was
established and functional prior to 01.11.2018, which assumption is
demonstrably contrary to the statutory Rules and official Government
Notifications. The said question of law, therefore, deserves to be
answered against the Appellants and in favour of the Respondents,
holding that the Maharashtra Revenue Tribunal validly exercised
appellate jurisdiction on the date of the impugned orders.
31
SA 251.2022.doc 29.12
12.12 During the course of oral submissions on 19 th January 2026, the
Appellant vehemently relied upon a document namely Government
Order No. STASNA 2017/P.No.125 DU V PU.-2 dated 8th May 2018, and
erroneously sought to project the said document as a “notification”
issued under Section 43(1) of RERA. Prior thereto the aforesaid Govt.
Order dated 8th May 2018, by Gazette Notification No. Rera.
2017/C.R.116/DVP dated 28 December 2017, the State of Maharashtra
had designated the Maharashtra Revenue Tribunal to function as the
Maharashtra Real Estate Appellate Tribunal under the first proviso to
Section 43(4) of the RERA. After the aforesaid Govt. Order dated 8 th
May 2018, the Government of Maharashtra issued Notification No.
Misc.2019/C.R.129/(Part-1)/RR-2 dated 24 October 2019 under
Section 43(1) of the Act, in supersession of the earlier notification no.
Rera.2017/C.R.116/DVP dated 28th December 2017 (Annexure-2),
formally establishing the Maharashtra Real Estate Appellate Tribunal
and notifying its functionality with retrospective effect from 24 th
December 2018. Thus, the alleged Government Order dated 8 th May
2018 is not a statutory notification under Section 43(1) of the Act.
REASONING REGARDING FIRST SUBSTANTIAL QUESTION OF LAW :-
14. Before consideration of the first substantial question of law, it is
necessary to set out the relevant legal provisions:
32
SA 251.2022.doc 29.12
i. The RERA received the assent of the President of India on 25 th
March 2016 and published in the Gazette of India dated 26-3-2016. By
Notification dated 26th April 2016 issued in exercise of the powers
conferred by Sub-Section (3) of Section 1 of RERA the Central
Government appointed the 1st day of May 2016 as the date on which
Sections 2, 20 to 39, 41 to 58, 71 to 78 and 81 to 92 came into force. By
Notification dated 19th April 2017 issued in exercise of the powers
conferred by Sub-Section (3) of Section 1 of RERA the Central
Government appointed the 1st day of May 2017 as the date on which
ii. Sections 20, 21 and 22 of RERA are concerning establishment
and incorporation of Real Estate Regulatory Authority, composition of
Authority, qualifications of Chairperson and Members of Authority and
manner of their appointment. The said sections 20, 21 and 22 are
reproduced herein below for ready reference:
20. Establishment and incorporation of Real Estate
Regulatory Authority
(1) The appropriate Government shall, within a period
of one year from the date of coming into force of this
Act, by notification, establish an Authority to be
known as the Real Estate Regulatory Authority to
exercise the powers conferred on it and to perform the
functions assigned to it under this Act:
Provided that the appropriate Government of two or
more States or Union territories may, if it deems fit,
establish one single Authority:
33
SA 251.2022.doc 29.12
Provided further that the appropriate Government
may, if it deems fit, establish more than one Authority
in a State or Union territory, as the case may be:
Provided also that until the establishment of a
Regulatory Authority under this section, the
appropriate Government shall, by order, designate any
Regulatory Authority or any officer preferably the
Secretary of the department dealing with Housing, as
the Regulatory Authority for the purposes under this
Act:
Provided also that after the establishment of the
Regulatory Authority, all applications, complaints or
cases pending with the Regulatory Authority
designated, shall stand transferred to the Regulatory
Authority so established and shall be heard from the
stage such applications, complaints or cases are
transferred.
(2) The Authority shall be a body corporate by the
name aforesaid having perpetual succession and a
common seal, with the power, subject to the provisions
of this Act, to acquire, hold and dispose of property,
both movable and immovable, and to contract, and
shall, by the said name, sue or be sued.
21. Composition of Authority.–The Authority shall
consist of a Chairperson and not less than two whole
time Members to be appointed by the appropriate
Government.
22. Qualifications of Chairperson and Members of
Authority.–The Chairperson and other Members of
the Authority shall be appointed by the appropriate
Government on the recommendations of a Selection
Committee consisting of the Chief Justice of the High
Court or his nominee, the Secretary of the Department
dealing with Housing and the Law Secretary, in such
manner as may be prescribed, from amongst persons
having adequate knowledge of and professional
experience of at-least twenty years in case of the
Chairperson and fifteen years in the case of the
Members in urban development, housing, real estate
34
SA 251.2022.doc 29.12
development, infrastructure, economics, technical
experts from relevant fields, planning, law, commerce,
accountancy, industry, management, social service,
public affairs or administration:
Provided that a person who is, or has been, in the
service of the State Government shall not be appointed
as a Chairperson unless such person has held the post
of Additional Secretary to the Central Government or
any equivalent post in the Central Government or
State Government:
Provided further that a person who is, or has been, in
the service of the State Government shall not be
appointed as a member unless such person has held
the post of Secretary to the State Government or any
equivalent post in the State Government or Central
Government.
(Emphasis added)
iii. Sections 43, 45 and 46 of RERA are concerning establishment
and incorporation of Real Estate Appellate Tribunal, composition of Real
Estate Appellate Tribunal and qualifications of Chairperson and
Members of Real Estate Appellate Tribunal and manner of their
appointment. The said sections 43, 45 and 46 are reproduced herein
below for ready reference:
“43. Establishment of Real Estate Appellate Tribunal.
–(1) The appropriate Government shall, within a
period of one year from the date of coming into force
of this Act, by notification, establish an Appellate
Tribunal to be known as the –(name of the
State/Union territory) Real Estate Appellate Tribunal.
(2) The appropriate Government may, if it deems
necessary, establish one or more benches of the
Appellate Tribunal, for various jurisdictions, in the
State or Union territory, as the case may be.
35
SA 251.2022.doc 29.12
(3) Every bench of the Appellate Tribunal shall consist
of at least one Judicial Member and one
Administrative or Technical Member.
(4) The appropriate Government of two or more
States or Union territories may, if it deems fit,
establish one single Appellate Tribunal:
Provided that, until the establishment of an Appellate
Tribunal under this section, the appropriate
Government shall designate, by order, any Appellate
Tribunal functioning under any law for the time being
in force, to be the Appellate Tribunal to hear appeals
under the Act:
Provided further that after the Appellate Tribunal
under this section is established, all matters pending
with the Appellate Tribunal designated to hear
appeals, shall stand transferred to the Appellate
Tribunal so established and shall be heard from the
stage such appeal is transferred.
(5) Any person aggrieved by any direction or decision
or order made by the Authority or by an adjudicating
officer under this Act may prefer an appeal before the
Appellate Tribunal having jurisdiction over the matter:
Provided that where a promoter files an appeal with
the Appellate Tribunal, it shall not be entertained,
without the promoter first having deposited with the
Appellate Tribunal atleast thirty per cent. of the
penalty, or such higher percentage as may be
determined by the Appellate Tribunal, or the total
amount to be paid to the allottee including interest
and compensation imposed on him, if any, or with
both, as the case may be, before the said appeal is
heard.
Explanation.–For the purpose of this sub-section
“person” shall include the association of allottees or
any voluntary consumer association registered under
any law for the time being in force.
45. Composition of Appellate Tribunal.–The Appellate
Tribunal shall consist of a Chairperson and not less
than two whole time Members of which one shall be a36
SA 251.2022.doc 29.12Judicial member and other shall be a Technical or
Administrative Member, to be appointed by the
appropriate Government.
Explanation.–For the purposes of this Chapter,–
(i) “Judicial Member” means a Member of the
Appellate Tribunal appointed as such under clause (b)
of sub-section (1) of section 46;
(ii) “Technical or Administrative Member” means a
Member of the Appellate Tribunal appointed as such
under clause (c) of sub-section (1) of section 46.
46. Qualifications for appointment of Chairperson and
Members.–(1) A person shall not be qualified for
appointment as the Chairperson or a Member of the
Appellate Tribunal unless he,–
(a) in the case of Chairperson, is or has been a Judge
of a High Court; and
(b) in the case of a Judicial Member he has held a
judicial office in the territory of India for at least
fifteen years or has been a member of the Indian Legal
Service and has held the post of Additional Secretary
of that service or any equivalent post, or has been an
advocate for at least twenty years with experience in
dealing with real estate matters; and
(c) in the case of a Technical or Administrative
Member, he is a person who is well-versed in the field
of urban development, housing, real estate
development, infrastructure, economics, planning, law,
commerce, accountancy, industry, management, public
affairs or administration and possesses experience of
at least twenty years in the field or who has held the
post in the Central Government or a State Government
equivalent to the post of Additional Secretary to the
Government of India or an equivalent post in the
Central Government or an equivalent post in the State
Government.
(2) The Chairperson of the Appellate Tribunal shall be
appointed by the appropriate Government in
consultation with the Chief Justice of High Court or
his nominee.
37
SA 251.2022.doc 29.12
(3) The Judicial Members and Technical or
Administrative Members of the Appellate Tribunal
shall be appointed by the appropriate Government on
the recommendations of a Selection Committee
consisting of the Chief Justice of the High Court or his
nominee, the Secretary of the Department handling
Housing and the Law Secretary and in such manner as
may be prescribed.”
(Emphasis added)
iv. Rules 3, 4, 5 and 9 of the Maharashtra Real Estate Regulatory
Authority, Chairperson, Members Officers and Other Employees
(Appointment and Service Conditions) Rules, 2017 (“Real Estate
Authority Rules, 2017”) are also relevant and are reproduced herein
below:
“3. Real Estate Regulatory Authority.
The Government may by notification in the Official
Gazette establish an Authority under sub-section (1) of
section 20 of the Act for such area as may be specified
in the notification.
4. Selection of Chairperson and other Members of
Authority.
(1) The State Government shall make a reference to
the Selection Committee for appointment of the
Chairperson and Members of the Authority or when
any vacancy in the office of the Chairperson or
Member arises or likely to arise in the Authority.
(2) The Selection Committee may, for the purpose of
selection of the Chairperson or Member of the
Authority, follow such procedure as it may as deem fit.
(3) The Selection Committee shall make a
recommendation to the State Government for the
consideration in the form of a panel of not more than
three persons, in order of preference, separately to fill
the vacancy or vacancies referred to by the State
Government.
38
SA 251.2022.doc 29.12
(4) The Selection Committee shall make its
recommendations to the State Government, within, a
period not exceeding sixty days from the date of
reference made under sub-rule (1).
(5) The Selection Committee shall normally hold its
meeting at Mumbai or at such places in the State, as
may be decided by the Chairperson.
(6) The Notice/Agenda, as the case may be, for the
meeting of the Selection Committee shall be issued by
the Convener after fixing the date and venue for such
meeting in consultation with the Chairperson of the
Selection Committee.
(7) The Secretary-in-Charge of the Housing
Department shall be the convener of the Selection
Committee.”
5. Appointment of Chairperson and Members.
The State Government shall consider the
recommendations of the Selection Committee for the
appointment of the Chairperson and Members or to fill
the vacancy in order of preference as recommended by
the Selection Committee. If the State Government
appoints person not according to the order of
preference, the Government shall record the reasons
in writing therefor.
9. Oath of office and secrecy.
(1) Every person appointed as the Chairperson of the
Authority shall, before entering his office, make and
subscribe an Oath of Office and Secrecy, in Form I and
Form II, respectively, appended to these Rules, before
the Minister-in-Charge of the Housing Department of
the Government.
(2) Every person appointed as a Member of the
Authority shall, before entering his office, make and
subscribe an Oath of Office and Secrecy, in Form I and
Form II, respectively, appended to these Rules, before
the Chairperson of the Authority.”
(Emphasis added)
39
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v. Rules 3, 4, 5 and 8 of the Maharashtra Real Estate Appellate
Tribunal (Members Officers and Employees) (Appointment and Service
Conditions) Rules, 2017 (“Real Estate Appellate Tribunal Rules”) are
relevant, which are reproduced herein below:
“3. Maharashtra Real Estate Appellate Tribunal
The Government may by notification in the Official
Gazettee stablish Appellate Tribunal for such area as
may be specified in the notification.
4. Procedure of Selection Committee
(1) The State Government shall make a reference to
the Selection Committee for appointment of Members
of the Appellate Tribunal or when any vacancy arises
or is likely to arise in the Appellate Tribunal.
(2) The Selection Committee may, for the purpose of
selection of the Members of Appellate Tribunal, follow
such procedure as it may deem fit.
(3) The Selection Committee shall make a
recommendation to the State Government for
consideration in the form of a panel of not more than
three persons in order of preference separately to fill
the vacancy or vacancies referred to by the State
Government.
(4) The Selection Committee shall make its
recommendations to the State Government, within a
period not exceeding sixty days from the date of
reference made under sub-rule (1).
(5) The Selection Committee shall normally hold its
meetings at Mumbai or at such places in the State, as
may be decided by the Chairperson.
(6) The Notice or Agenda, as the case may be, for the
meeting of the Selection Committee shall be issued by
the convenor after fixing the date and venue for such
meeting in consultation with the Chairperson.
40
SA 251.2022.doc 29.12
(7) The Secretary- in- charge of the Housing
Department shall be the convener of the Selection
Committee.
5. Appointment of Member
The State Government shall consider the
recommendation of the Selection Committee for the
appointment of Member or fill the vacancy in order of
preference as recommended by the Selection
Committee. If the State Government appoints person
not according to the order of preference, the
Government shall record the reasons in writing
therefor.
8. Oath of office and secrecy
(1)Every person appointed as the Chairperson of the
Appellate Tribunal shall, before entering upon his
office, make and subscribe an Oath of Office and
Secrecy, in Form I and Form II, respectively, appended
to these Rules.
(2) Every person appointed as a Member shall, before
entering upon his office, make and subscribe an Oath
of Office and Secrecy, in Form I and Form II,
respectively, appended to these Rules.”
15. Before considering the scheme of RERA as per the above
provisions which are relevant for the purpose of deciding the First
Substantial Question of Law, it is necessary to set out the statement of
Objects and Reasons of RERA.
Statement of Objects and Reasons:
“(1) The real estate sector plays a catalytic role in
fulfilling the need and demand for housing and
infrastructure in the country. While this sector has
grown significantly in recent years, it has been largely
unregulated, with absence of professionalism and
standardisation and lack of adequate consumer
protection. Though the Consumer Protection Act, 198641
SA 251.2022.doc 29.12is available as a forum to the buyers in the real estate
market, the recourse is only curative and is not
adequate to address all the concerns of buyers and
promoters in that sector. The lack of standardisation,
has been a constraint to the healthy and orderly
growth of industry. Therefore, the need for regulating
the sector has been emphasised in various forums.
(2) In view of the above, it becomes necessary to
have a Central legislation, namely, the Real Estate
(Regulation and Development) Bill, 2013, in the
interests of the effective consumer protection,
uniformity and standardisation of business practices
and transactions in the real estate sector. The
proposed Bill provides for the establishment of the
Real Estate Regulatory Authority (the Authority) for
regulation and promotion of real estate sector and to
ensure sale of plot, apartment or building, as the case
may be, in an efficient and transparent manner and to
protect the interest of consumers in real estate sector
and establish the Real Estate Appellate Tribunal to
hear appeals from the decisions, directions or orders
of the Authority.”
(3) The proposed Bill will ensure greater
accountability towards consumers, and significantly
reduce frauds and delays as also the current high
transaction costs. It attempts to balance the interests
of consumers and promoters by imposing certain
responsibilities on both. It seeks to establish symmetry
of information between the promoter and purchaser,
transparency of contractual conditions, set minimum
standards of accountability and a fasttrack dispute
resolution mechanism. The proposed Bill will induct
professionalism and standardisation in the sector, thus
paving the way for accelerated growth and
investments in the long run.
4. The Real Estate (Regulation and Development) Bill,
2013, inter alia, provides for the following, namely:–
(a) to impose an obligation upon the promoter not to
42
SA 251.2022.doc 29.12book, sell or offer for sale, or invite persons to
purchase any plot, apartment or building, as the case
may be, in any real estate project without registering
the real estate project with the Authority;
(b) to make the registration of real estate project
compulsory in case where the area of land proposed to
be developed exceed five hundred square meters or
number of apartments proposed to be developed
exceed eight;
(c) to impose an obligation upon the real estate agent
not to facilitate sale or purchase of any plot,
apartment or building, as the case may be, without
registering himself with the Authority;
(d) to impose liability upon the promoter to pay such
compensation to the allottees, in the manner as
provided under the proposed legislation, in case if he
fails to discharge any obligations imposed on him
under the proposed legislation;
(e) to establish an Authority to be known as the Real
Estate Regulatory Authority by the appropriate
Government, to exercise the powers conferred on it
and to perform the functions assigned to it under the
proposed legislation;
(f) the functions of the Authority shall, inter alia,
include-
(i) to register and regulate real estate projects and real
estate agents register under this Act;
(ii) to publish and maintain a website of records for
public viewing of all real estate projects for which
registration has been given, with such details as may
be prescribed including information provided in the
application for which registration has been granted;
43
SA 251.2022.doc 29.12
(iii) to ensure compliance of the obligations cast upon
the promoters, the allottees and the real estate agents
under the proposed legislation;
(g) to establish an Advisory Council by the Central
Government to advice and recommend the Central
Government on-
(i) matters concerning the implementation of the
proposed legislation;
(ii) major questions of policy;
(iii) protection of consumer interest;
(iv) growth and development of the real estate sector,
(h) to establish the Real Estate Appellate Tribunal by
the appropriate Government to hear appeals from the
direction, decision or order of the Authority or the
adjudicating officer;
(i) to appoint an adjudicating officer by the Authority
for adjudging compensation under sections 12, 14, 18
and 19 of the proposed legislation;
(j) to make provision for punishment and penalties for
contravention of the provisions of the proposed
legislation and for non-compliance of orders of
Authority or Appellate Tribunal;
(k) to empower the appropriate Government to
supersede the Authority on certain circumstances
specified in the proposed legislation;
(l) to empower the appropriate Government to issue
directions to the Authority and obtain reports and
returns from it.
44
SA 251.2022.doc 29.12
5. The Notes on clauses explain in detail the various
provisions contained in the Real Estate (Regulation
and Development) Bill, 2013.
6. The Bill seeks to achieve the above objectives.”
16. Objects and Reasons of RERA were discussed by the Supreme
Court in the case of Newtech Promoters And Developers Private Limited
V. State of Uttar Pradesh And Others16, in paragraph Nos.5 to 11 which
read as under:
“Objects and Reasons of the 2016 Act
5. Over the past two decades, with the growth of
population and the attraction of the people to shift
towards urbanisation, the demand for housing
increased manifold. The Government also introduced
various housing schemes to cope with the increasing
demand but the experience shows that demands of the
housing sector could not be meted out by the
Government at its own level for various reasons to
meet the requirement, the private players entered into
the real estate sector in meeting out the rising demand
of housing. Though availability of loans, both from
public and private banks, become easier, still the high
rate of interest and the EMI has posed additional
financial burden on the people.
6. At the given time, the real estate and housing sector
was largely unregulated and the consequence was that
consumers were unable to procure complete
information for enforced accountability towards
builders and developers in the absence of an effective
mechanism in place. Though the Consumer Protection
Act, 1986 was available to cater the demand of
homebuyers in the real estate sector but the
experience shows that this mechanism was inadequate
to address the needs of the homebuyers and promoters16 (2021) 18 SCC 1
45
SA 251.2022.doc 29.12in the real estate sector.
7. At this juncture, the need for Real Estate
(Regulation) Bill was badly felt for establishing an
oversight mechanism to enforce accountability to the
real estate sector and providing an adjudicating
machinery for speedy dispute redressal mechanism
and safeguarding the investments made by the
homebuyers through legislation to the extent
permissible under the law.
8. The Statement of Objects and Reasons of the Act
indicates that the primal position of the Regulatory
Authority is to regulate the real estate sector having
jurisdiction to ensure compliance with the obligation
cast upon the promoters. The opening Statement of
Objects and Reasons which has a material bearing on
the subject reads as follows:
“The real estate sector plays a catalytic role in
fulfilling the need and demand for housing and
infrastructure in the country. While this sector has
grown significantly in recent years, it has been largely
unregulated, with absence of professionalism and
standardisation and lack of adequate consumer
protection. Though the Consumer Protection Act, 1986
is available as a forum to the buyers in the real estate
market, the recourse is only curative and is not
adequate to address all the concerns of buyers and
promoters in that sector. The lack of standardisation,
has been a constraint to the healthy and orderly
growth of industry. Therefore, the need for regulating
the sector has been emphasised in various forums.
2. In view of the above, it becomes necessary to have a
Central legislation, namely, the Real Estate
(Regulation and Development) Bill, 2013, in the
interests of the effective consumer protection,
uniformity and standardisation of business practices
and transactions in the real estate sector. The
proposed Bill provides for the establishment of the
Real Estate Regulatory Authority (the Authority) for46
SA 251.2022.doc 29.12regulation and promotion of real estate sector and to
ensure sale of plot, apartment or building, as the case
may be, in an efficient and transparent manner and to
protect the interest of consumers in real estate sector
and establish the Real Estate Appellate Tribunal to
hear appeals from the decisions, directions or orders
of the Authority.”
9. It was introduced with an object to ensure greater
accountability towards consumers, to significantly
reduce frauds and delays and also the current high
transaction costs, and to balance the interests of
consumers and promoters by imposing certain
responsibilities on both, and to bring transparency of
the contractual conditions, set minimum standards of
accountability and a fast-track dispute resolution
mechanism. It also proposes to induct professionalism
and standardisation in the sector, thus paving the way
for accelerated growth and investments in the long
run.
10. Some of the relevant Objects and Reasons are
extracted as under:
“4. (d) to impose liability upon the promoter to pay
such compensation to the allottees, in the manner as
provided under the proposed legislation, in case if he
fails to discharge any obligations imposed on him
under the proposed legislation;
***
(f) the functions of the Authority shall, inter alia,
include–
(i) to render advice to the appropriate Government in
matters relating to the development of real estate
sector;
(ii) to publish and maintain a website of records of all
real estate projects for which registration has been
given, with such details as may be prescribed;
47
SA 251.2022.doc 29.12
(iii) to ensure compliance of the obligations cast upon
the promoters, the allottees and the real estate agents
under the proposed legislation;
***
(i) to appoint an adjudicating officer by the Authority
for adjudging compensation under Sections 12, 14 and
16 of the proposed legislation;
11. The Bill provides for establishment of the
Authority for regulation and promotion of real estate
sector, to ensure sale of plot, apartment or building or
sale of real estate project in an efficient and
transparent manner and to protect the interest of
consumers in the real estate sector and provide the
adjudicating mechanism for speedy dispute redressal
mechanism by establishing the Regulatory Authority
and the adjudicating officer and in hierarchy, the
Appellate Tribunal for early and prompt disposal of
the complaint being instituted primarily by the home-
buyers for whom this Act has been enacted by
Parliament in 2016.”
(Emphasis added)
17. Thus, the following inter alia are the important objects and
purposes of RERA:-
i. The real estate and housing sector was largely
unregulated and the consequence was that consumers were
unable to procure complete information for enforced
accountability towards builders and developers in the
absence of an effective mechanism in place.
ii. The Consumer Protection Act, 1986 was available to
cater the demand of homebuyers in the real estate sector
48
SA 251.2022.doc 29.12but the experience shows that this mechanism was
inadequate to address the needs of the homebuyers and
promoters in the real estate sector.
iii. The need for Real Estate (Regulation) Bill was badly
felt for establishing an oversight mechanism to enforce
accountability to the real estate sector and providing an
adjudicating machinery for speedy dispute redressal
mechanism and safeguarding the investments made by the
homebuyers through legislation to the extent permissible
under the law.
iv. The Statement of Objects and Reasons of RERA
indicates that the primal position of the Regulatory
Authority is to regulate the real estate sector having
jurisdiction to ensure compliance with the obligation cast
upon the promoters, the allottees and the real estate
agents.
v. The proposed Bill provides for the establishment of the
Real Estate Regulatory Authority for regulation and
promotion of real estate sector and to ensure sale of plot,
apartment or building, as the case may be, in an efficient
and transparent manner and to protect the interest of
consumers in real estate sector and establish the Real Estate
49
SA 251.2022.doc 29.12Appellate Tribunal to hear appeals from the decisions,
directions or orders of the Authority.
vi. It was introduced with an object to ensure greater
accountability towards consumers, to significantly reduce
frauds and delays and also the current high transaction
costs, and to balance the interests of consumers and
promoters by imposing certain responsibilities on both, and
to bring transparency of the contractual conditions, set
minimum standards of accountability and a fast-track
dispute resolution mechanism.
vii. to impose liability upon the promoter to pay such
compensation to the allottees, in the manner as provided
under the proposed legislation, in case if he fails to
discharge any obligations imposed on him under the
proposed legislation;
18. The perusal of Sections 20, 21, 22, 43, 45 and 46 of RERA as also
the relevant Rules as set out herein above reflect the following scheme
of RERA in the context of the First Substantial Question of Law.:-
i. The appropriate Government shall within a
period of one year from the date of coming into force
of RERA, by Notification establish an Authority to be
50
SA 251.2022.doc 29.12known as Real Estate Regulatory Authority. The
appropriate Government, until the establishment of a
Regulatory Authority under section 20, shall, by order,
designate any Regulatory Authority or any officer
preferably the Secretary of the department dealing
with Housing, as the Regulatory Authority for the
purposes under RERA [Section 20].
ii. The Authority shall consist of a Chairperson and
not less than two whole time Members to be
appointed by the appropriate Government [Section
21].
iii. The Chairperson and other Members of the
Authority shall be appointed by the appropriate
Government on the recommendations of a Selection
Committee consisting of the Chief Justice of the High
Court or his nominee, the Secretary of the Department
dealing with Housing and the Law Secretary [Section
22].
iv. The Chairperson and other Members of the
Authority shall be appointed from amongst persons
51
SA 251.2022.doc 29.12having adequate knowledge of and professional
experience of at-least twenty years in case of the
Chairperson and fifteen years in the case of the
Members in urban development, housing, real estate
development, infrastructure, economics, technical
experts from relevant fields, planning, law, commerce,
accountancy, industry, management, social service,
public affairs or administration [Section 22].
v. Every person appointed as the Chairperson of the
Authority and Member of the Authority shall, before
entering their offices, make and subscribe an Oath of
Office and Secrecy in prescribed format [Rule 9 of the
Real Estate Authority Rules, 2017].
vi. The appropriate Government shall within a
period of one year from the date of coming into force
of RERA, by Notification establish an Appellate
Tribunal for the concerned State/Union Territory. The
appropriate Government may if necessary, shall
establish one or more Benches of the Appellate
Tribunal for various jurisdictions in the State or Union
Territory as the case may be [Section 43(1) and (2)].
52
SA 251.2022.doc 29.12
vii. The Appellate Tribunal shall consist of a
chairperson and not less than two whole time
members of which one shall be a judicial member and
other shall be a Technical or Administrative Member.
[Section 45].
viii. A person shall not be qualified for appointment
as the Chairperson unless he is or has been a Judge of
a High Court. The Chairperson of the Appellate
Tribunal shall be appointed by the appropriate
Government in consultation with the Chief Justice of
High Court or his nominee. [Section 46(1) (a) and
(2)].
ix. A person shall not be qualified for appointment
as a Judicial Member unless he has held a judicial
office in the territory of India for at least fifteen years
or has been a member of the Indian Legal Service and
has held the post of Additional Secretary of that
service or any equivalent post, or has been an
advocate for at least twenty years with experience in
dealing with real estate matters [Section 46].
53
SA 251.2022.doc 29.12
x. A person shall not be qualified for appointment
as a Technical or Administrative Member unless he is a
person who is well-versed in the field of urban
development, housing, real estate development,
infrastructure, economics, planning, law, commerce,
accountancy, industry, management, public affairs or
administration and possesses experience of at least
twenty years in the field or who has held the post in
the Central Government or a State Government
equivalent to the post of Additional Secretary to the
Government of India or an equivalent post in the
Central Government or an equivalent post in the State
Government [Section 46].
xi. The Judicial Members and Technical or
Administrative Members of the Appellate Tribunal
shall be appointed by the appropriate Government on
the recommendations of a Selection Committee
consisting of the Chief Justice of the High Court or his
nominee, the Secretary of the Department handling
Housing and the Law Secretary and in such manner as
may be prescribed. [Section 46].
54
SA 251.2022.doc 29.12
xii. The Chairperson and the members of the
Appellate Tribunal shall before entering upon the
office, make and subscribe an oath of office and
secrecy. [Rule 8 of the Real Estate Appellate Tribunal
Rules 2017].
xiii. Until the establishment of an Appellate Tribunal
under Section 43(1), the appropriate Government
shall designate by Order, any Appellate Tribunal
functioning under any law for the time being in force
to be the Appellate Tribunal to hear Appeals under the
RERA. [First proviso to sub-Section (4) of Section 43].
xiv. After the Appellate Tribunal under Section 43 is
established, all matters pending before the Appellate
Tribunal designated to hear the Appeals shall stand
transferred to the Appellate Tribunal so established
and shall be heard from the Stage such Appeal is
transferred. [Second proviso to sub-Section (4) of
19. Sub-Section 1 of Section 20 0f RERA specifically provides that
within a period of one year from the date of coming into force of RERA,
55
SA 251.2022.doc 29.12
by Notification, establish an Authority to be known as the Real Estate
Regulatory Authority. Third Proviso to sub-section (1) of Section 20
provides that until the establishment of the Real Estate Regulatory
Authority, the appropriate Government, shall, by order, designate any
Regulatory Authority or any officer preferably the Secretary of the
department dealing with Housing, as the Regulatory Authority for the
purposes under RERA. The fourth proviso to Sub-Section 1 of Section
20 provides that after the establishment of the Regulatory Authority, all
applications, complaints or cases pending with the Regulatory Authority
designated, shall stand transferred to the Regulatory Authority so
established and shall be heard from the stage such applications,
complaints or cases are transferred.
20. Sub-section (1) of Section 43 of RERA specifically provides that
the appropriate Government shall within a period of one year from the
date of coming into force of RERA, by Notification establish an
Appellate Tribunal for the concerned State/Union Territory. Even, until
establishment of the Appellate Tribunal as contemplated under Sub-
Section 1 of Section 43, the appropriate Government has been
empowered by first Proviso to Sub-Section 4 of Section 43 to designate
by Order any Appellate Tribunal functioning under any law for the time
being in force to be the Appellate Tribunal to hear Appeals under RERA.
56
SA 251.2022.doc 29.12
The second proviso to Sub-Section 4 of Section 43 provides that after
the Appellate Tribunal as contemplated under Sub-Section 1 of Section
43 is established, all matters pending with the Appellate Tribunal,
designated to hear Appeals as designated by exercising power under
first proviso to Sub-Section (4) of Section 43 shall stand transferred to
the Appellate Tribunal established as contemplated under Sub-Section 1
of Section 43 and shall be heard from such a stage when the Appeal is
transferred. Thus, the second proviso to Sub-Section 4 of Section 43
makes it very clear that establishment of the Appellate Tribunal by
Notification contemplated by Sub-Section 1 of Section 43 read with
second proviso to Sub-Section 4 of Section 43 is an Appellate Tribunal
established which is ready to hear the Appeals pending before the
Appellate Tribunal designated by the State Government by exercising
power under First Proviso to sub-section (4) of Section 43 of RERA.
21. For appreciating the Scheme of RERA, relevant for the purpose of
deciding the First Substantial Question of Law, it is necessary to
consider the same in the light of objects and reasons for enacting RERA.
The objects and reasons for enacting RERA makes it very clear that the
same was enacted in peculiar circumstances. The real estate and
housing sector was largely unregulated and the consequence was that
consumers were unable to procure complete information for enforced
57
SA 251.2022.doc 29.12
accountability towards builders and developers in the absence of an
effective mechanism in place. The Consumer Protection Act, 1986 was
available to cater the demand of homebuyers in the real estate sector
but the said mechanism was inadequate to address the needs of the
homebuyers and promoters in the real estate sector. The need for RERA
was badly felt for establishing an oversight mechanism to enforce
accountability in the real estate sector and providing an adjudicating
machinery for speedy dispute redressal mechanism and safeguarding
the investments made by the homebuyers through legislation to the
extent permissible under the law. The Statement of Objects and Reasons
of RERA indicates that the primal position of the Regulatory Authority is
to regulate the real estate sector having jurisdiction to ensure
compliance with the obligation cast upon the promoters, the allottees
and the real estate agents. The RERA provided for the establishment of
the Real Estate Regulatory Authority for regulation and promotion of
real estate sector and to ensure sale of plot, apartment or building, as
the case may be, in an efficient and transparent manner and to protect
the interest of consumers in real estate sector and establish the Real
Estate Appellate Tribunal to hear appeals from the decisions, directions
or orders of the Authority. RERA was enacted with an object to ensure
greater accountability towards consumers, to significantly reduce frauds
and delays and also the high transaction costs, and to balance the
58
SA 251.2022.doc 29.12
interests of consumers and promoters by imposing certain
responsibilities on both, and to bring transparency of the contractual
conditions, set minimum standards of accountability and a fast-track
dispute resolution mechanism, to impose liability upon the promoter to
pay such compensation to the allottees, in the manner as provided, in
case if the promoter fails to discharge any obligations imposed on him.
22. As noted herein above, Section 20 of RERA provides for
establishment and incorporation of Real Estate Regulatory Authority
and Section 43 provides for establishment of Real Estate Appellate
Tribunal. Section 20 and Section 43 of RERA by which inter alia
respectively it is provided that until the establishment of Real Estate
Regulatory Authority and Real Estate Appellate Tribunal interim
arrangement is made for immediately establishing alternate Regulatory
Authority and alternate Appellate Tribunal to perform functions of Real
Estate Regulatory Authority and Real Estate Appellate Tribunal
respectively till the formation of Real Estate Regulatory Authority and
Real Estate Appellate Tribunal, is required to be appreciated in the
context of object and reasons of RERA more particularly that the need
for RERA was necessitated for establishing an oversight mechanism to
enforce accountability to the real estate sector and providing an
adjudicating machinery for speedy dispute redressal mechanism and
59
SA 251.2022.doc 29.12
safeguarding the investments made by the homebuyers through
legislation to the extent permissible under the law. Thus, inter alia it is
the purpose of RERA to immediately provide Regulatory Authority to
regulate Real Estate Sector and establish Appellate Tribunal to hear
Appeals from the decisions, directions or orders of the Regulatory
Authority.
23. The importance of the Regulatory Authority can be seen from
Section 34 of RERA which is concerning functions of the Regulatory
Authority. Said Section 34 reads as under:
“34. Functions of Authority.–The functions of the Authority
shall include–
(a) to register and regulate real estate projects and real estate
agents registered under this Act;
(b) to publish and maintain a website of records, for public
viewing, of all real estate projects for which registration has
been given, with such details as may be prescribed, including
information provided in the application for which registration
has been granted;
(c) to maintain a database, on its website, for public viewing,
and enter the names and photographs of promoters as
defaulters including the project details, registration for which
has been revoked or have been penalised under this Act, with
reasons therefor, for access to the general public;
(d) to maintain a database, on its website, for public viewing,
and enter the names and photographs of real estate agents
who have applied and registered under this Act, with such
details as may be prescribed, including those whose
registration has been rejected or revoked;
60
SA 251.2022.doc 29.12
(e) to fix through regulations for each areas under its
jurisdiction the standard fees to be levied on the allottees or
the promoter or the real estate agent, as the case may be;
(f) to ensure compliance of the obligations cast upon the
promoters, the allottees and the real estate agents under this
Act and the rules and regulations made thereunder;
(g) to ensure compliance of its regulations or orders or
directions made in exercise of its powers under this Act;
(h) to perform such other functions as may be entrusted to
the Authority by the appropriate Government as may be
necessary to carry out the provisions of this Act.”
(Emphasis added)
24. Section 34 clearly shows that very important functions have been
assigned to the Regulatory Authority. The main function of the
Regulatory Authority, in the context of the First Substantial Question of
Law, is to ensure compliance of the obligations cast upon the promoters,
the allottees and the real estate agents.
25. The functions and duties of promoter are set out in Section 11 of
the RERA which reads as under:
“11. Functions and duties of promoter.–(1) The promoter
shall, upon receiving his Login Id and password under clause
(a) of sub-section (1) or under sub-section (2) of section 5, as
the case may be, create his web page on the website of the
Authority and enter all details of the proposed project as
provided under sub-section (2) of section 4, in all the fields as
provided, for public viewing, including–
(a) details of the registration granted by the Authority;
(b) quarterly up-to-date the list of number and types of
apartments or plots, as the case may be, booked;
61
SA 251.2022.doc 29.12
(c) quarterly up-to-date the list of number of garages
booked;
(d) quarterly up-to-date the list of approvals taken and the
approvals which are pending subsequent to commencement
certificate;
(e) quarterly up-to-date status of the project; and
(f) such other information and documents as may be
specified by the regulations made by the Authority.
(2) The advertisement or prospectus issued or published by
the promoter shall mention prominently the website address
of the Authority, wherein all details of the registered project
have been entered and include the registration number
obtained from the Authority and such other matters incidental
thereto.
(3) The promoter, at the time of the booking and issue of
allotment letter shall be responsible to make available to the
allottee, the following information, namely:–
(a) sanctioned plans, layout plans, along with
specifications, approved by the competent authority, by
display at the site or such other place as may be specified
by the regulations made by the Authority;
(b) the stage wise time schedule of completion of the
project, including the provisions for civic infrastructure like
water, sanitation and electricity.
(4) The promoter shall–
(a) be responsible for all obligations, responsibilities and
functions under the provisions of this Act or the rules and
regulations made thereunder or to the allottees as per the
agreement for sale, or to the association of allottees, as the
case may be, till the conveyance of all the apartments, plots
or buildings, as the case may be, to the allottees, or the
common areas to the association of allottees or the
competent authority, as the case may be:
Provided that the responsibility of the promoter, with
62
SA 251.2022.doc 29.12respect to the structural defect or any other defect for such
period as is referred to in sub-section (3) of section 14,
shall continue even after the conveyance deed of all the
apartments, plots or buildings, as the case may be, to the
allottees are executed.
(b) be responsible to obtain the completion certificate or
the occupancy certificate, or both, as applicable, from the
relevant competent authority as per local laws or other
laws for the time being in force and to make it available to
the allottees individually or to the association of allottees,
as the case may be;
(c) be responsible to obtain the lease certificate, where the
real estate project is developed on a leasehold land,
specifying the period of lease, and certifying that all dues
and charges in regard to the leasehold land has been paid,
and to make the lease certificate available to the
association of allottees;
(d) be responsible for providing and maintaining the
essential services, on reasonable charges, till the taking
over of the maintenance of the project by the association of
the allottees;
(e) enable the formation of an association or society or co-
operative society, as the case may be, of the allottees, or a
federation of the same, under the laws applicable:
Provided that in the absence of local laws, the
association of allottees, by whatever name called, shall be
formed within a period of three months of the majority of
allottees having booked their plot or apartment or building,
as the case may be, in the project;
(f) execute a registered conveyance deed of the apartment,
plot or building, as the case may be, in favour of the
allottee along with the undivided proportionate title in the
common areas to the association of allottees or competent
authority, as the case may be, as provided under section 17
of this Act;
(g) pay all outgoings until he transfers the physical
63
SA 251.2022.doc 29.12possession of the real estate project to the allottee or the
associations of allottees, as the case may be, which he has
collected from the allottees, for the payment of outgoings
(including land cost, ground rent, municipal or other local
taxes, charges for water or electricity, maintenance charges,
including mortgage loan and interest on mortgages or other
encumbrances and such other liabilities payable to
competent authorities, banks and financial institutions,
which are related to the project):
Provided that where any promoter fails to pay all or
any of the outgoings collected by him from the allottees or
any liability, mortgage loan and interest thereon before
transferring the real estate project to such allottees, or the
association of the allottees, as the case may be, the
promoter shall continue to be liable, even after the transfer
of the property, to pay such outgoings and penal charges, if
any, to the authority or person to whom they are payable
and be liable for the cost of any legal proceedings which
may be taken therefor by such authority or person;
(h) after he executes an agreement for sale for any
apartment, plot or building, as the case may be, not
mortgage or create a charge on such apartment, plot or
building, as the case may be, and if any such mortgage or
charge is made or created then notwithstanding anything
contained in any other law for the time being in force, it
shall not affect the right and interest of the allottee who
has taken or agreed to take such apartment, plot or
building, as the case may be;
(5) The promoter may cancel the allotment only in terms of
the agreement for sale:
Provided that the allottee may approach the Authority
for relief, if he is aggrieved by such cancellation and such
cancellation is not in accordance with the terms of the
agreement for sale, unilateral and without any sufficient
cause.
(6) The promoter shall prepare and maintain all such other
details as may be specified, from time to time, by regulations
made by the Authority.”
64
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(Emphasis added)
26. A perusal of Section 11 of RERA clearly shows that very
important functions and duties are cast on the promoter. The promoter
is responsible for all obligations, responsibilities and functions under the
provisions of RERA or Rules and Regulations made thereunder or to
allottees as per the agreement for sale or to the association of allottees.
The promoter is responsible for obtaining completion certificate or
occupancy certificate or both from the relevant competent authority as
per law. The promoter is responsible for performing very important
functions and duties for completion of real estate project.
27. Section 12 of RERA is concerning obligations of promoter
regarding veracity of the advertisements or prospectus. Section 13
provides that a promoter shall not accept a sum more than 10% of the
cost of the apartment as an advance payment without first entering into
a written agreement for sale with such person and registered the said
agreement for sale under any law for the time being in force. Section 14
provides that the proposed project shall be developed and completed by
the promoter in accordance with the sanctioned plans, layout plans and
specifications as approved by the competent authorities and no addtions
or alterations be made with the same without the previous consent of
the allottee. As per Section 16, the promoter is under an obligation to
65
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ensure real estate project in respect of title of the land and building as a
part of the real estate project and construction of the real estate project.
As per Section 17, the promoter is under an obligation to transfer the
title in favour of allottee and also to the association of the allottees.
Section 18 provides that if the promoter fails to complete or is unable to
give possession of an apartment, plot or building in accordance with the
terms of the agreement for sale or duly completed by the date specified
therein or due to discontinuance of his business as a developer on
account of suspension or revocation of the registration under RERA or
for any other reason, the promoter shall be liable on demand to the
allottees, in case the allottee wishes to withdraw from the project,
without prejudice to any other remedy available, to return the amount
received by promoter in respect of that apartment, plot, building, as the
case may be, with interest at such rate as may be prescribed in this
behalf including compensation in the manner as provided under RERA.
It is further provided that where an allottee does not intend to
withdraw from the project, the allottee shall be paid, by the promoter,
interest for every month of delay, till the handing over of the possession,
at such rate as may be prescribed.
28. Thus, it is clear that the promoter is under an obligation to
perform very important functions and duties and the same are very
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important for protecting the interest of allottees.
29. In view of the above important functions and duties of the
promoter and object and purposes of RERA, it is also relevant to note
Paragraph no.12 of the decision of the Supreme Court in Newtech
(supra) which reads as under:-
“12. To examine the matter in this perspective, consider what a
house means in India. The data shows that about more than
77% of total assets of an average Indian household are held in
real estate and it is the single largest investment of an
individual in his lifetime. The real estate in India has a peculiar
feature. The buyer borrows money to pay for a house and
simultaneously plays the role of a financer as building projects
collect money upfront and this puts the buyer in a very
vulnerable position–the weakest stakeholder with a high
financial exposure. The amendment to the Insolvency and
Bankruptcy Code, 2018 recognised the homebuyers as
financial creditors and the present enactment is the most
important regulatory intervention in favour of the homebuyers
and it had an impact and with passage of time, has become a
yardstick of laying down minimum standards in the market.
Earlier, the real estate sector was completely unregulated and
there was no transparency in their business profile and after
the present enactment, it is open for the potential homebuyers
to check if a project is approved under the Act, 2016 that at
least gives a satisfaction to a person who is coming forward in
making a lifetime investment..”
(Emphasis added)
Thus the Supreme Court in Newtech (supra) has highlighted
peculiar feature of real estate sector in India which is that the buyer
borrows money to pay for a house and simultaneously plays the role
67
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of a financer as building projects collect money upfront and this puts
the buyer in a very vulnerable position–the weakest stakeholder
with a high financial exposure. The object and purpose of RERA, inter
alia, is to protect the buyer who is in a very vulnerable position as
held by the Supreme Court.
30. Section 19 of RERA is regarding rights and duties of allottees.
The said Section reads as under:
“19. Rights and duties of allottees.–(1) The allottee
shall be entitled to obtain the information relating to
sanctioned plans, layout plans along with the
specifications, approved by the competent authority
and such other information as provided in this Act or
the rules and regulations made thereunder or the
agreement for sale signed with the promoter.
(2) The allottee shall be entitled to know stage-wise
time schedule of completion of the project, including
the provisions for water, sanitation, electricity and
other amenities and services as agreed to between the
promoter and the allottee in accordance with the
terms and conditions of the agreement for sale.
(3) The allottee shall be entitled to claim the
possession of apartment, plot or building, as the case
may be, and the association of allottees shall be
entitled to claim the possession of the common areas,
as per the declaration given by the promoter under
sub-clause (C) of clause (l) of sub-section (2) of
section 4.
(4) The allottee shall be entitled to claim the refund of
amount paid along with interest at such rate as may
be prescribed and compensation in the manner as
provided under this Act, from the promoter, if the
promoter fails to comply or is unable to give68
SA 251.2022.doc 29.12possession of the apartment, plot or building, as the
case may be, in accordance with the terms of
agreement for sale or due to discontinuance of his
business as a developer on account of suspension or
revocation of his registration under the provisions of
this Act or the rules or regulations made thereunder.
(5) The allottee shall be entitled to have the necessary
documents and plans, including that of common areas,
after handing over the physical possession of the
apartment or plot or building as the case may be, by
the promoter.
(6) Every allottee, who has entered into an agreement
for sale to take an apartment, plot or building as the
case may be, under section 13, shall be responsible to
make necessary payments in the manner and within
the time as specified in the said agreement for sale
and shall pay at the proper time and place, the share
of the registration charges, municipal taxes, water and
electricity charges, maintenance charges, ground rent,
and other charges, if any.
(7) The allottee shall be liable to pay interest, at such
rate as may be prescribed, for any delay in payment
towards any amount or charges to be paid under sub-
section (6).
(8) The obligations of the allottee under sub-section
(6) and the liability towards interest under sub-section
(7) may be reduced when mutually agreed to between
the promoter and such allottee.
(9) Every allottee of the apartment, plot or building as
the case may be, shall participate towards the
formation of an association or society or cooperative
society of the allottees, or a federation of the same.
(10) Every allottee shall take physical possession of
the apartment, plot or building as the case may be,
within a period of two months of the occupancy
69
SA 251.2022.doc 29.12
certificate issued for the said apartment, plot or
building, as the case may be.
(11) Every allottee shall participate towards
registration of the conveyance deed of the apartment,
plot or building, as the case may be, as provided under
sub-section (1) of section 17 of this Act.
(Emphasis added)
31. Thus, very important rights of allottees are given statutory
recognition by RERA as also very important duties are also cast on the
allottees. Every allottee who has entered into an agreement for sale to
take an apartment, plot or building as the case may be, under section
13, shall be responsible to make necessary payments in the manner and
within the time as specified in the said agreement for sale and shall pay
at the proper time and place, the share of the registration charges,
municipal taxes, water and electricity charges, maintenance charges,
ground rent, and other charges, if any. The allottee shall be liable to pay
interest, at such rate as may be prescribed, for any delay in payment
towards any amount or charges to be paid under sub-section (6). Every
allottee of the apartment, plot or building as the case may be, shall
participate towards the formation of an association or society or
cooperative society of the allottees, or a federation of the same. Every
allottee shall take physical possession of the apartment, plot or building
as the case may be, within a period of two months of the occupancy
certificate issued for the said apartment, plot or building, as the case
70
SA 251.2022.doc 29.12
may be. Every allottee shall participate towards registration of the
conveyance deed of the apartment, plot or building, as the case may be,
as provided under sub-section (1) of section 17 of this Act. Thus, the
allottee is also responsible for performing various important duties as
specified in Section 19 of RERA.
32. As noted earlier the Statement of Objects and Reasons of RERA
indicates that the primal position of the Regulatory Authority is to
regulate the real estate sector having jurisdiction to ensure compliance
with the obligation cast upon the promoters, the allottees and the real
estate agents. Thus, Sections 20 and 43 of RERA providing for
formation and establishment of Real Estate Regulatory Authority and
Real Estate Appellate Tribunal and till that time making arrangement
for designated Authority and designated Appellate Tribunal as pro tem
arrangement are required to be considered and interpreted in the light
of this object and purpose of RERA.
33. As the First Substantial Question of Law is concerning
interpretation of Section 43 of RERA, before further discussion on the
said substantial question of law, it is necessary to set out legal position
concerning interpretation of statutes.
(i) The Supreme Court in the case of R.S. Nayak V. A.R.
Antulay17 in paragraph 18 has held that:-
17 (1984) 2 SCC 183
71
SA 251.2022.doc 29.12“18.The 1947 Act was enacted, as its long title shows,
to make more effective provision for the prevention of
bribery and corruption. Indisputably, therefore, the
provisions of the Act must receive such construction at
the hands of the court as would advance the object and
purpose underlying the Act and at any rate not defeat
it. If the words of the statute are clear and
unambiguous, it is the plainest duty of the court to
give effect to the natural meaning of the words used in
the provision. The question of construction arises only
in the event of an ambiguity or the plain meaning of
the words used in the statute would be self-defeating.
The court is entitled to ascertain the intention of the
legislature to remove the ambiguity by construing the
provision of the statute as a whole keeping in view
what was the mischief when the statute was enacted
and to remove which the legislature enacted the
statute. This rule of construction is so universally
accepted that it need not be supported by precedents.
Adopting this rule of construction, whenever a
question of construction arises upon ambiguity or
where two views are possible of a provision, it would
be the duty of the court to adopt that construction
which would advance the object underlying the Act
namely, to make effective provision for the prevention
of bribery and corruption and at any rate not defeat it .”
(Emphasis added)
(ii) The Supreme Court in the case of Grasim Industries Ltd. V.
Collector of Customs, Bombay18 has held in paragraphs 10 and 12
as follows :
“10. No words or expressions used in any statute can be
said to be redundant or superfluous. In matters of
interpretation one should not concentrate too much on
one word and pay too little attention to other words.
18 (2002) 4 SCC 297
72
SA 251.2022.doc 29.12No provision in the statute and no word in any section
can be construed in isolation. Every provision and every
word must be looked at generally and in the context in
which it is used. It is said that every statute is an edict
of the legislature. The elementary principle of
interpreting any word while considering a statute is to
gather the mens or sententia legis of the legislature.
Where the words are clear and there is no obscurity,
and there is no ambiguity and the intention of the
legislature is clearly conveyed, there is no scope for the
court to take upon itself the task of amending or
alternating (sic altering) the statutory provisions.
Wherever the language is clear the intention of the
legislature is to be gathered from the language used.
While doing so, what has been said in the statute as
also what has not been said has to be noted. The
construction which requires for its support addition or
substitution of words or which results in rejection of
words has to be avoided.
“12. In the background of what has been urged by the
assessee it has to be further seen whether the principles
of ejusdem generis have application. The rule is
applicable when particular words pertaining to a class,
category or genus are followed by general words. In
such a case the general words are construed as limited
to things of the same kind as those specified. The rule
reflects an attempt to reconcile incompatibility between
the specific and general words in view of the other
rules of interpretation that all words in a statute are
given effect if possible, that a statute is to be construed
as a whole and that no words in a statute are presumed
to be superfluous. The rule applies only when (1) the
statute enumerates the specific words, (2) the subjects
of enumeration constitute a class or category, (3) that
class or category is not exhausted by the enumeration,
(4) the general terms follow the enumeration, and (5)
there is no indication of a different legislative intent. If
the subjects of enumeration belong to a broad-based73
SA 251.2022.doc 29.12genus, as also to a narrower genus there is no principle
that the general words should be confined to the
narrower genus. Where the context and the object and
mischief of the enactment do not require restricted
meaning to be attached to words of general import it
becomes the duty of the courts to give those words
their plain and ordinary meaning.”
(iii) The Supreme Court in the case of J.P. Bansal V. State of
Rajasthan19 has held in paragraph Nos. 11, 14 and 16 as under:-
“11. It is said that a statute is an edict of the legislature.
The elementary principle of interpreting or construing a
statute is to gather the mens or sententia legis of the
legislature.
12. Interpretation postulates the search for the true
meaning of the words used in the statute as a medium of
expression to communicate a particular thought. The
task is not easy as the “language” is often misunderstood
even in ordinary conversation or correspondence. The
tragedy is that although in the matter of correspondence
or conversation the person who has spoken the words or
used the language can be approached for clarification,
the legislature cannot be approached as the legislature,
after enacting a law or Act, becomes functus officio so
far as that particular Act is concerned and it cannot itself
interpret it. No doubt, the legislature retains the power
to amend or repeal the law so made and can also
declare its meaning, but that can be done only by
making another law or statute after undertaking the
whole process of law-making.
13. Statute being an edict of the legislature, it is
necessary that it is expressed in clear and unambiguous
language.
19 (2003) 5 SCC 134
74
SA 251.2022.doc 29.12
14. Where, however, the words were clear, there is no
obscurity, there is no ambiguity and the intention of the
legislature is clearly conveyed, there is no scope for the
court to innovate or take upon itself the task of
amending or altering the statutory provisions.
“It endangers continued public confidence in the
political impartiality of the judiciary, which is essential
to the continuance of the rule of law, if Judges, under
the guise of interpretation, provide their own preferred
amendments to statutes which experience of their
operation has shown to have had consequences that
members of the court before whom the matter comes
consider to be injurious to the public interest.”
16. Where, therefore, the “language” is clear, the
intention of the legislature is to be gathered from the
language used. What is to be borne in mind is as to
what has been said in the statute as also what has not
been said. A construction which requires, for its
support, addition or substitution of words or which
results in rejection of words, has to be avoided, unless
it is covered by the rule of exception, including that of
necessity, which is not the case here. …..
(v) The Supreme Court in the case of G. Narayanaswami Vs. G.
Pannerselvam20 has held in paragraph 4 as under :-
“4. Authorities are certainly not wanting which
indicate that Courts should interpret in a broad and
generous spirit the document which contains the
fundamental law of the land or the basic principles of its
Government. Nevertheless, the rule of “plain meaning” or
“literal” interpretation, described in Maxwell’s
Interpretation of Statutes as “the primary rule”, could not
be altogether abandoned today in interpreting any
document. Indeed, we find Lord Evershed, M.R., saying:
20 (1972) 3 SCC 717
75
SA 251.2022.doc 29.12“The length and detail of modern legislation, has
undoubtedly reinforced the claim of literal construction
as the only safe rule”. (See Maxwell on “Interpretation of
Statutes”, 12th Edition, p. 28). It may be that the great
mass of modern legislation, a large part of which consists
of statutory rules, makes some departure from the literal
rule of interpretation more easily justifiable today than it
was in the past. But, the object of interpretation and of
“construction” (which may be broader than
“interpretation”) is to discover the intention of the law-
makers in every case (See : Crawford on Statutory
Construction, 1940 Edn., para 157, pp. 240-42). This
object can, obviously, be best achieved by first looking at
the language used in the relevant provisions. Other
methods of extracting the meaning can be resorted to
only if the language used is contradictory, ambiguous, or
leads really to absurd results. This is an elementary and
basic rule of interpretation as well as of construction
processes which, from the point of view of principles
applied, coalesce and converge towards the common
purpose of both which is to get at the real sense and
meaning, so far as it may be reasonably possible to do
this, of what is found laid down. The provisions whose
meaning is under consideration have, therefore to be
examined before applying any method of construction at
all. To these provisions we may now turn.”
(Emphasis added)
(vi) The Supreme Court in Vivek Narayan Sharma vs. Union of India 21
has held as follows in paragraph Nos.133 to 148:
“133. We find that for deciding the present issue, it
will also be necessary to refer an important principle
of interpretation of statutes i.e. of purposive
interpretation.
134. “Legislation has an aim, it seeks to obviate some
21 (2023) 3 SCC 176
SA 251.2022.doc 29.12mischief, to supply an inadequacy, to effect a change
of policy, to formulate a plan of government. That aim,
that policy is not drawn, like nitrogen, out of the air; it
is evidenced in the language of the statute, as read in
the light of other external manifestations of purpose
[“Some Reflections on the Reading of Statutes”
[(1947) 47 Columbia LR 527] , Columbia LR at p.
538].” This is how Justice Frankfurter succinctly
propounds the principle of purposive interpretation.
135. It is thus necessary to cull out the legislative
policy from various factors like the words in the
statute, the Preamble to the Act, the Statement of
Objects and Reasons, and in a given case, even the
attendant circumstances. After the legislative policy is
found, then the words used in the statute must be so
interpreted such that it advances the purpose of the
statute and does not defeat it.
136. Francis Bennion in his treatise Statutory
Interpretation, at p. 810 described purposive
construction in an equally eloquent manner as under:
“A purposive construction of an enactment is one
which gives effect to the legislative purpose by–
(a) following the literal meaning of the enactment
where that meaning is in accordance with the
legislative purpose (in this Code called a purposive-
and-literal construction), or
(b) applying a strained meaning where the literal
meaning is not in accordance with the legislative
purpose (in the Code called a purposive-and-strained
construction).”
137. A statute must be construed having regard to the
legislative intent. It has to be meaningful. A
construction which leads to manifest absurdity must
not be preferred to a construction which would fulfill
the object and purport of the legislative intent.
138. Aharon Barak, the former President of the
Supreme Court of Israel, whose exposition of “doctrine
77
SA 251.2022.doc 29.12
of proportionality” has found approval by the
Constitution Bench of this Court in Modern Dental
College & Research Centre [Modern Dental College &
Research Centre v. State of M.P., (2016) 7 SCC 353 : 7
SCEC 1] , to which we will refer to in the forthcoming
paragraphs, in his commentary on “Purposive
Interpretation in Law”, has summarised “the goal of
interpretation in law” as under:
“At some point, we need to find an Archimedean
foothold, external to the text, from which to answer
that question. My answer is this : The goal of
interpretation in law is to achieve the objective–in
other words, the purpose–of law. [ D. Brink, “Legal
Theory, Legal Interpretation, and Judicial Review”, 17
Philosophy & Public Affairs 105, 125 (1988).] The role
of a system of interpretation in law is to choose, from
among the semantic options for a given text, the
meaning that best achieves the purpose of the text.
Each legal text–will, contract, statute, and
constitution–was chosen to achieve a social objective.
Achieving this objective, achieving this purpose, is the
goal of interpretation. The system of interpretation is
the device and the means. It is a tool through which
law achieves self-realisation. In interpreting a given
text, which is, after all, what interpretation in law
does, a system of interpretation must guarantee that
the purpose of the norm trapped in the–in our
terminology, the purpose of the text–will be achieved
in the best way. Hence the requirement that the
system of interpretation be a rational activity. A coin
toss will not do. This is also the rationale–which is at
the core of my own views–for the belief that
purposive interpretation is the most proper system of
interpretation. This system is proper because it
guarantees the achievement of the purpose of law.
There is social, jurisprudential, hermeneutical, and
constitutional support for my claim that the proper
criterion for interpretation is the search for law’s
purpose, and that purposive interpretation best fulfills
that criterion. A comparative look at the law supports
it, as well. I will discuss each element of that support
below.”
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SA 251.2022.doc 29.12
139. The learned Judge emphasised that purposive
interpretation is the most proper system of
interpretation. He observed that this system is proper
because it guarantees the achievement of the purpose
of law. The proper criterion for interpretation is the
search for law’s purpose, and that purposive
interpretation best fulfils that criterion.
140. The principle of purposive interpretation has also
been expounded through a catena of judgments of this
Court. A Constitution Bench of this Court in M.
Pentiah v. Muddala Veeramallappa [M. Pentiah v.
Muddala Veeramallappa, (1961) 2 SCR 295 : AIR
1961 SC 1107] was considering a question, as to
whether the term prescribed in Section 34 would
apply to a member of a “deemed” committee under
the provisions of the Hyderabad District Municipalities
Act, 1956. An argument was put forth that, upon a
correct interpretation of the provisions of Section 16,
the same would be permissible. Rejecting the said
argument, K. Subba Rao, J., observed thus : (AIR pp.
1110-11, para 6)
“6. Before we consider this argument in some detail, it
will be convenient at this stage to notice some of the
well-established rules of construction which would
help us to steer clear of the complications created by
the Act. Maxwell on the Interpretation of Statutes,
10th Edn., says at p. 7 thus:
‘… if the choice is between two interpretations, the
narrower of which would fail to achieve the manifest
purpose of the legislation, we should avoid a
construction which would reduce the legislation to
futility and should rather accept the bolder
construction based on the view that Parliament would
legislate only for the purpose of bringing about an
effective result.’It is said in Craies on Statute Law, 5th Edn., at p. 82–
‘Manifest absurdity or futility, palpable injustice, or
absurd inconvenience or anomaly to be avoided.’79
SA 251.2022.doc 29.12Lord Davey in Canada Sugar Refining Co. Ltd. v. R.
[Canada Sugar Refining Co. Ltd. v. R., 1898 AC 735
(PC)] provides another useful guide of correct
perspective to such a problem in the following words :
(AC p. 741)
‘… Every clause of a statute should be construed with
reference to the context and the other clauses of the
Act, so as, so far as possible, to make a consistent
enactment of the whole statute or series of statutes
relating to the subject-matter.’ ”
141. A.K. Sarkar, J. in his concurring opinion observed
thus : (M. Pentiah case [M. Pentiah v. Muddala
Veeramallappa, (1961) 2 SCR 295 : AIR 1961 SC
1107] , AIR p. 1115, para 27)“27. There is no doubt that the Act raises some
difficulty. It was certainly not intended that the
members elected to the Committee under the repealed
Act should be given a permanent tenure of office nor
that there would be no elections under the new Act.
Yet such a result would appear to follow if the
language used in the new Act is strictly and literally
interpreted. It is however well established that
‘Where the language of a statute, in its ordinary
meaning and grammatical construction, leads to a
manifest contradiction of the apparent purpose of the
enactment, or to some inconvenience or absurdity,
hardship or injustice, presumably not intended, a
construction may be put upon it which modifies the
meaning of the words, and even the structure of the
sentence…. Where the main object and intention of a
statute are clear, it must not be reduced to a nullity by
the draftsman’s unskilfulness or ignorance of the law,
except in a case of necessity, or the absolute
intractability of the language used. Nevertheless, the
courts are very reluctant to substitute words in a
statute, or to add words to it, and it has been said that
they will only do so where there is a repugnancy to
good sense.’ : see Maxwell on Statutes (10th Edn.) p.
229.
80
SA 251.2022.doc 29.12
In Seaford Court Estates Ltd. v. Asher [Seaford Court
Estates Ltd. v. Asher, (1949) 2 KB 481] , KB at p. 499,
Denning, L.J. said:
‘… when a defect appears a Judge cannot simply fold
his hands and blame the draftsman. He must set to
work on the constructive task of finding the intention
of Parliament … and then he must supplement the
written word so as to give “force and life” to the
intention of the legislature. … A Judge should ask
himself the question how, if the makers of the Act had
themselves come across this ruck in the texture of it,
how would they have straightened it out? He must
then do as they would have done. A Judge must not
alter the material of which [the Act] is woven, but he
can and should iron out the creases.’ ”
(emphasis supplied)
142. Another Constitution Bench judgment of this
Court in High Court of A.P. v. L.V.A. Dixitulu [High
Court of A.P. v. L.V.A. Dixitulu, (1979) 2 SCC 34 : 1979
SCC (L&S) 99] reiterated the position in the following
words : (SCC p. 53, para 67)“67. Where two alternative constructions are possible,
the court must choose the one which will be in accord
with the other parts of the statute and ensure its
smooth, harmonious working, and eschew the other
which leads to absurdity, confusion, or friction,
contradiction and conflict between its various
provisions, or undermines, or tends to defeat or
destroy the basic scheme and purpose of the
enactment.”
143. In Girdhari Lal & Sons v. Balbir Nath Mathur
[Girdhari Lal & Sons v. Balbir Nath Mathur, (1986) 2
SCC 237] , O. Chinnappa Reddy, J. explained the
position as under : (SCC p. 243, para 9)
“9. So we see that the primary and foremost task of a
court in interpreting a statute is to ascertain the
intention of the legislature, actual or imputed. Having
ascertained the intention, the court must then strive to
81
SA 251.2022.doc 29.12
so interpret the statute as to promote or advance the
object and purpose of the enactment. For this purpose,
where necessary the court may even depart from the
rule that plain words should be interpreted according
to their plain meaning. There need be no meek and
mute submission to the plainness of the language. To
avoid patent injustice, anomaly or absurdity or to
avoid invalidation of a law, the court would be well
justified in departing from the so-called golden rule of
construction so as to give effect to the object and
purpose of the enactment by supplementing the
written word if necessary.”
144. After referring to various earlier judgments of
other jurisdictions, his Lordship observed thus :
(Balbir Nath Mathur case [Girdhari Lal & Sons v.
Balbir Nath Mathur, (1986) 2 SCC 237] , SCC p. 246,
para 16)“16. Our own court has generally taken the view that
ascertainment of legislative intent is a basic rule of
statutory construction and that a rule of construction
should be preferred which advances the purpose and
object of a legislation and that though a construction,
according to plain language, should ordinarily be
adopted, such a construction should not be adopted
where it leads to anomalies, injustices or absurdities,
vide K.P. Varghese v. ITO [K.P. Varghese v. ITO, (1981)
4 SCC 173 : 1981 SCC (Tax) 293] , State Bank of
Travancore v. Mohd. M. Khan [State Bank of
Travancore v. Mohd. M. Khan, (1981) 4 SCC 82] , Som
Prakash Rekhi v. Union of India [Som Prakash Rekhi v.
Union of India, (1981) 1 SCC 449 : 1981 SCC (L&S)
200] , Ravula Subba Rao v. CIT [Ravula Subba Rao v.
CIT, AIR 1956 SC 604 : 1956 SCR 577] , Govindlal
Chhaganlal Patel v. Agricultural Produce Market
Committee [Govindlal Chhaganlal Patel v. Agricultural
Produce Market Committee, (1975) 2 SCC 482] and
Babaji Kondaji Garad v. Nasik Merchants Coop. Bank
Ltd. [Babaji Kondaji Garad v. Nasik Merchants Coop.
Bank Ltd., (1984) 2 SCC 50] ”
(emphasis supplied)
82
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145. M.N. Venkatachaliah, J. speaking for the
Constitution Bench of this Court in Tinsukhia Electric
Supply Co. Ltd. v. State of Assam [Tinsukhia Electric
Supply Co. Ltd. v. State of Assam, (1989) 3 SCC 709]
observed thus : (SCC p. 754, paras 118-20)
“118. The courts strongly lean against any
construction which tends to reduce a statute to futility.
The provision of a statute must be so construed as to
make it effective and operative, on the principle ut res
magis valeat quam pereat. It is, no doubt, true that if a
statute is absolutely vague and its language wholly
intractable and absolutely meaningless, the statute
could be declared void for vagueness. This is not in
judicial review by testing the law for arbitrariness or
unreasonableness under Article 14; but what a court
of construction, dealing with the language of a statute,
does in order to ascertain from, and accord to, the
statute the meaning and purpose which the legislature
intended for it. In Manchester Ship Canal Co. v.
Manchester Racecourse Co. [Manchester Ship Canal
Co. v. Manchester Racecourse Co., (1900) 2 Ch 352 :
16 TLR 429 : 83 LT 274] Farwell, J. said : (pp. 360-
61)
‘… Unless the words were so absolutely senseless that
I could do nothing at all with them, I should be bound
to find some meaning, and not to declare them void
for uncertainty.’
119. In Fawcett Properties Ltd. v. Buckingham County
Council [Fawcett Properties Ltd. v. Buckingham
County Council, (1960) 3 WLR 831 : (1960) 3 All ER
503 (HL)] Lord Denning approving the dictum of
Farwell, J., said : (Ch p. 849)
‘… But when a statute has some meaning, even
though it is obscure, or several meanings, even though
there is little to choose between them, the courts have
to say what meaning the statute to bear rather than
reject it as a nullity.’
120. It is, therefore, the court’s duty to make what it
can of the statute, knowing that the statutes are meant
83
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to be operative and not inept and the nothing short of
impossibility should allow a court to declare a statute
unworkable. In Whitney v. IRC [Whitney v. IRC, 1926
AC 37 (HL)] Lord Dunedin said : (AC p. 52)
‘… A statute is designed to be workable, and the
interpretation thereof by a court should be to secure
that object, unless crucial omission or clear direction
makes that end unattainable.’ ”
146. In State of Gujarat v. R.A. Mehta [State of Gujarat
v. R.A. Mehta, (2013) 3 SCC 1 : (2013) 2 SCC (Cri) 46
: (2013) 1 SCC (L&S) 490] , this Court held as under :
(SCC pp. 47-48, para 98)
“98. The doctrine of purposive construction may be
taken recourse to for the purpose of giving full effect
to statutory provisions, and the courts must state what
meaning the statute should bear, rather than rendering
the statute a nullity, as statutes are meant to be
operative and not inept. The courts must refrain from
declaring a statute to be unworkable. The rules of
interpretation require that construction which carries
forward the objectives of the statute, protects interest
of the parties and keeps the remedy alive, should be
preferred looking into the text and context of the
statute. Construction given by the court must promote
the object of the statute and serve the purpose for
which it has been enacted and not efface its very
purpose. ‘The courts strongly lean against any
construction which tends to reduce a statute to futility.
The provision of the statute must be so construed as to
make it effective and operative.’ The court must take a
pragmatic view and must keep in mind the purpose for
which the statute was enacted as the purpose of law
itself provides good guidance to courts as they
interpret the true meaning of the Act and thus
legislative futility must be ruled out. A statute must be
construed in such a manner so as to ensure that the
Act itself does not become a dead letter and the
obvious intention of the legislature does not stand
defeated unless it leads to a case of absolute
intractability in use. The court must adopt a
construction which suppresses the mischief and
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advances the remedy and ‘to suppress subtle
inventions and evasions for continuance of the
mischief, and pro privato commodo, and to add force
and life to the cure and remedy, according to the true
intent of the makers of the Act, pro bono publico’. The
court must give effect to the purpose and object of the
Act for the reason that legislature is presumed to have
enacted a reasonable statute. (Vide M. Pentiah v.
Muddala Veeramallappa [M. Pentiah v. Muddala
Veeramallappa, (1961) 2 SCR 295 : AIR 1961 SC
1107] , S.P. Jain v. Krishna Mohan Gupta [S.P. Jain v.
Krishna Mohan Gupta, (1987) 1 SCC 191] , RBI v.
Peerless General Finance & Investment Co. Ltd. [RBI v.
Peerless General Finance & Investment Co. Ltd.,
(1987) 1 SCC 424] , Tinsukhia Electric Supply Co. Ltd.
v. State of Assam [Tinsukhia Electric Supply Co. Ltd. v.
State of Assam, (1989) 3 SCC 709] , SCC at p. 754,
para 118; UCO Bank v. Rajinder Lal Capoor [UCO
Bank v. Rajinder Lal Capoor, (2008) 5 SCC 257 :
(2008) 2 SCC (L&S) 263] and Grid Corpn. of Orissa
Ltd. v. Eastern Metals & Ferro Alloys [Grid Corpn. of
Orissa Ltd. v. Eastern Metals & Ferro Alloys, (2011) 11
SCC 334] .)”
(emphasis supplied)
147. The principle of purposive construction has been
enunciated in various subsequent judgments of this
Court. However, we would not like to burden this
judgment with a plethora of citations. Suffice it to say,
the law on the issue is very well crystallised.
148. It is thus clear that it is a settled principle that
the modern approach of interpretation is a pragmatic
one, and not pedantic. An interpretation which
advances the purpose of the Act and which ensures its
smooth and harmonious working must be chosen and
the other which leads to absurdity, or confusion, or
friction, or contradiction and conflict between its
various provisions, or undermines, or tends to defeat
or destroy the basic scheme and purpose of the
enactment must be eschewed. The primary and
foremost task of the Court in interpreting a statute is
to gather the intention of the legislature, actual or85
SA 251.2022.doc 29.12imputed. Having ascertained the intention, it is the
duty of the Court to strive to so interpret the statute as
to promote or advance the object and purpose of the
enactment. For this purpose, where necessary, the
Court may even depart from the rule that plain words
should be interpreted according to their plain
meaning. There need be no meek and mute
submission to the plainness of the language. To avoid
patent injustice, anomaly or absurdity or to avoid
invalidation of a law, the court would be justified in
departing from the so-called golden rule of
construction so as to give effect to the object and
purpose of the enactment. Ascertainment of legislative
intent is the basic rule of statutory construction.”
(Emphasis added)
34. From the analysis of the above decisions of the Supreme Court
concerning interpretation of statutes, the following principles can be
culled out:-
i. The provisions of the Act must receive such construction at the
hands of the court as would advance the object and purpose
underlying the Act and at any rate not to defeat it.
ii. If the words of the statute are clear and unambiguous, it is the
plainest duty of the court to give effect to the natural meaning of
the words used in the provision. The question of construction
arises only in the event of an ambiguity or the plain meaning of
the words used in the statute would be self-defeating.
iii. The court is entitled to ascertain the intention of the legislature to
remove the ambiguity by construing the provision of the statute
as a whole keeping in view what was the mischief when the
statute was enacted and to remove which the legislature enacted86
SA 251.2022.doc 29.12the statute.
iv. In matters of interpretation one should not concentrate too much
on one word and pay too little attention to other words. No
provision in the statute and no word in any section can be
construed in isolation. Every provision and every word must be
looked at generally and in the context in which it is used.
v. The elementary principle of interpreting any word while
considering a statute is to gather the sententia legis or mens of
the legislature. The maxim sententia legis or mens contemplates
that the essence of the law lies in the spirit, and not in its letter,
the letters are just a way to express the intentions of the law
makers. Where the words are clear and there is no obscurity, and
there is no ambiguity and the intention of the legislature is clearly
conveyed, there is no scope for the court to take upon itself the
task of amending or altering the statutory provisions.
vi. It is necessary to cull out the legislative policy from various
factors like the words in the statute, the Preamble to the Act, the
Statement of Objects and Reasons, and in a given case, even the
attendant circumstances. After the legislative policy is found, then
the words used in the statute must be so interpreted such that it
advances the purpose of the statute and does not defeat it.
vii. A statute must be construed having regard to the legislative
intent. It has to be meaningful. A construction which leads to
manifest absurdity must not be preferred to a construction which
would fulfill the object and purport of the legislative intent.
viii. Where the language of a statute, in its ordinary meaning
87
SA 251.2022.doc 29.12and grammatical construction, leads to a manifest contradiction
of the apparent purpose of the enactment, or to some
inconvenience or absurdity, hardship or injustice, presumably not
intended, a construction may be put upon it which modifies the
meaning of the words, and even the structure of the sentence.
Where the main object and intention of a statute are clear, it must
not be reduced to a nullity by the draftsman’s unskilfulness or
ignorance of the law, except in a case of necessity, or the absolute
intractability of the language used.
ix. The doctrine of purposive construction may be taken recourse to
for the purpose of giving full effect to statutory provisions, and
the courts must state what meaning the statute should bear,
rather than rendering the statute a nullity, as statutes are meant
to be operative and not inept. The courts must refrain from
declaring a statute to be unworkable. The rules of interpretation
require that construction which carries forward the objectives of
the statute, protects interest of the parties and keeps the remedy
alive, should be preferred looking into the text and context of the
statute. Construction given by the court must promote the object
of the statute and serve the purpose for which it has been enacted
and not efface its very purpose.
x. The courts strongly lean against any construction which tends to
reduce a statute to futility. The provision of the statute must be so
construed as to make it effective and operative.’ The court must
take a pragmatic view and must keep in mind the purpose for
which the statute was enacted as the purpose of law itself
provides good guidance to courts as they interpret the true
meaning of the Act and thus legislative futility must be ruled out.
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The court must give effect to the purpose and object of the Act for
the reason that legislature is presumed to have enacted a
reasonable statute.
35. Thus, it is clear that the provisions of RERA are required to be
interpreted in the manner the same would advance the object and
purpose of RERA. As per the settled legal position, the provisions of the
Act must receive such construction at the hands of the court as would
advance the object and purpose underlying the Act and at any rate not
defeat it. If the words of the statute are clear and unambiguous, it is the
plainest duty of the court to give effect to the natural meaning of the
words used in the provision. The question of construction arises only in
the event of an ambiguity or the plain meaning of the words used in the
statute would be self-defeating. The court is entitled to ascertain the
intention of the legislature to remove the ambiguity by construing the
provision of the statute as a whole keeping in view what was the
mischief when the statute was enacted and to remove which the
legislature enacted the statute. Adopting this rule of construction,
whenever a question of construction arises upon ambiguity or where
two views are possible of a provision, it would be the duty of the court
to adopt that construction which would advance the object underlying
the Act.
36. Thus, what is contemplated under the scheme of RERA is that the
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Real Estate Regulatory Authority (under section 20) and the Real Estate
Appellate Tribunal (under section 43) shall be appointed by the
Appropriate Government within a period of 1 year of coming into the
operation of RERA and till that time interim arrangement is to be made
by the Appropriate Governement of designated Authority and
designated Appellate Tribunal. Thus, what is contemplated is that as
soon as the RERA is enacted until the establishment of an Appellate
Tribunal as contemplated under sub-section (1) of section 43 i.e.
regular Appellate Tribunal, any Appellate Tribunal functioning under
any of the law for the time being in force be designated to be the
Appellate Tribunal designated to hear the appeals under RERA. The
scheme of RERA further contemplates that by following the mandatory
provision the Chairperson, Judicial Member and
Technical/Administrative Member are required to be appointed. As
noted herein above, Rule 8 of Real Estate Appellate Tribunal Rules
clearly provides that the Chairperson and members of the Appellate
Tribunal shall before entering upon the office, make and subscribe oath
of office and secrecy. The second proviso to sub-section (4) of section 43
clearly provides that after establishment of the Appellate Tribunal under
sub section (1) of section 43 all matters pending with the designated
Appellate Tribunal shall stand transferred to the Real Estate Appellate
Tribunal. Thus, it is clear that establishment of an Appellate Tribunal
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contemplated under Section 43 (1) of RERA read with Rule 8 of the
Real Estate Appellate Tribunal Rules is an Appellate Tribunal ready to
hear appeals. This scheme of Section 43 in the context of first
substantial question of law is very clear from the language of Sub-
Section 1 of Section 43 read with first and second proviso to Sub-
Section 4 of Section 43 of the RERA read with Rule 8 of Real Estate
Appellate Tribunal Rules.
37. Thus, the establishment of the Appellate Tribunal takes effect
after the appointment of the Chairperson and members and they before
entering upon the office, make and subscribe an oath of office and
secrecy. As submitted by the learned Counsel appearing for the
Appellants, it is correct that the establishment of the Appellate Tribunal
will take place only once and the appointment of the Chairperson and
members and taking oath by them before entering their respective
offices will take place when exigency arises. However, the scheme of the
RERA clearly shows that unless the Chairperson and Judicial and
Technical or Administrative Members are appointed and they enter their
office after taking oath, it is the designated Appellate Tribunal which
has jurisdiction to hear the appeal under RERA.
38. The clear and unambiguous provisions as made in Section 43 of
RERA read with Rule 8 of the Real Estate Appellate Tribunal Rules, inter
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alia, provides as follows :
(i) The appropriate Government by notification,
establish Real Estate Appellate Tribunal.
(ii) Until the establishment of Real Estate Appellate
Tribunal, the appropriate Government shall designate, by
order, any Appellate Tribunal functioning under any law for
the time being in force, to be the Appellate Tribunal to hear
appeals under RERA.
(iii) After the Real Estate Appellate Tribunal is
established, all matters pending with the Appellate Tribunal
designated to hear appeals, shall stand transferred to the
Appellate Tribunal so established and shall be heard from the
stage such appeal is transferred.
(iv) The Chairperson and members of the Real Estate
Appellate Tribunal shall before entering upon the office, make
and subscribe an oath of office and secrecy.
39. Thus, what is contemplated by Section 43 is until the
establishment of Appellate Tribunal under RERA any other Appellate
Tribunal functioning under any other law for the time being in force can
92
SA 251.2022.doc 29.12
be designated by the Appropriate Government to be the Appellate
Tribunal under RERA to hear Appeal under RERA. It is further provided
that once the Appellate Tribunal is established under Section 43 of
RERA, all matters pending with the Appellate Tribunal functioning
under any other law for the time being in force and designated by the
Appropriate Government to hear Appeals under RERA, shall stand
transferred to the Appellate Tribunal so established and shall be heard
from the stage such appeal is transferred. Rule 8 of Real Estate
Appellate Tribunal Rules provides that the Chairperson and member of
the Appellate Tribunal shall before entering upon the office, make and
subscribe an oath of office and secrecy. Thus, the Appellate Tribunal
established under Section 43 contemplated is the functioning Appellate
Tribunal under RERA as it has to start hearing the pending Appeals
from the stage of the hearing completed before the designated
Appellate Tribunal. As the Chairperson and member, of the Appellate
Tribunal shall before entering upon the office, make and subscribe an
oath of office and secrecy, it is very clear that what is contemplated
under Section 43 read with Rule 8 of Real Estate Appellate Tribunal
Rules is functioning Appellate Tribunal and not merely Appellate
Tribunal existing only on paper.
40. In the light of above scheme of RERA, it is necessary to set out
relevant aspects:
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i. Section 43(1) of RERA provides that the appropriate Government
shall, within a period of one year from the date of coming into force of
RERA, by notification, establish an Appellate Tribunal. First proviso to
sub-section (4) of Section 43 of RERA provides that until the
establishment of an Appellate Tribunal under said Section, the
appropriate Government shall designate, by order, any Appellate
Tribunal functioning under any law for the time being in force, to be the
Appellate Tribunal to hear appeals under RERA i.e. Designated
Appellate Tribunal.
ii. The Government of Maharashtra issued following notification on
28th December 2017.
“No. Rera.2017/C.R.116/DVP-2.–In exercise of the
powers conferred by the first proviso to sub-section
(4) of section 43 of Real Estate (Regulation and
Development) Act, 2016 (16 of 2016) (hereinafter
referred to as “the said Act”) the Government of
Maharashtra, being the appropriate Government in
respect of matters relating to the State, hereby
designates the Maharashtra Revenue Tribunal at
Brihan Mumbai constituted and functioning under the
Maharashtra Land Revenue Code, 1966 (Mah. XLI of
1966) to be the Appellate Tribunal to hear the appeals
under the said Act, until the establishment of the
Maharashtra Real Estate Appellate Tribunal under
section 43 of the said Act.”
(Emphasis added)
Thus, the Government of Maharashtra by Notification dated 28th
December 2017 designated the Maharashtra Revenue Tribunal at
Brihanmumbai constituted and functioning under the Maharashtra
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SA 251.2022.doc 29.12
Revenue Code to be the Appellate Tribunal to hear Appeals under RERA
until the establishment of Real Estate Appellate Tribunal under Section
43 of the Real Estate Appellate Tribunal.
iii. The Government of Maharashtra by Government Resolution
dated 8th May 2018 issued by exercising power under Section 46(2) and
(3) appointed a Chairperson, one Judicial Member and another
technical or administrative member as provided under Section 45 of
RERA. The relevant portion (English Translation) of said Government
Resolution dated 8th May 2018 is as under :
“The Government, in exercise of the powers conferred
upon it under the provisions of Section 46(2) and also
(3) of the Real Estate (Regulation and Development)
Act, 2016 and as prescribed under Section 45 of the
aforesaid Act, hereby appoint the Chairperson and
two whole time Members i.e. a Judicial member and a
Technical/Administrative Member of the Maharashtra
Real Estate Appellate Tribunal as mentioned herein
below.
1) Smt. Indira Jain (Retired Judge), Chairperson,
Maharashtra Real Estate Appellate Tribunal.
2) Shri Sumant Kolhe, Judicial Member,
Maharashtra Real Estate Appellate Tribunal.
3) Shri S. S. Sandhu, Technical/Administrative
Member, Maharashtra Real Estate Appellate
Tribunal.
The provisions of the Maharashtra Real Estate
Appellate Tribunal (Officers and Other Employees)
(Appointment and Service Conditions) Rules, 2017
dated 20th April, 2017, shall be applicable to the
appointments to the aforesaid posts.”
(Emphasis added)
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iv. Although appointment of Chairperson and members of
Maharashtra Real Estate Appellate Tribunal was made by Government
Resolution dated 8th May 2018, the said chairperson and members took
oath after a period of about 6 months and 16 days i.e. on 24 th December
2018 and the functioning of the Maharashtra Real Estate Appellate
Tribunal started on 24th December 2018.
v. The Government of Maharashtra issued notification dated 24 th
October 2019 by exercising powers conferred by sub-section 1 of
Section 43 of the RERA establishing Maharashtra Real Estate Appellate
Tribunal for the State of Maharashtra. The said notification dated 24 th
October 2019 reads as under :
“HOUSING DEPARTMENT
Madam Cama Marg, Hutatma Rajguru Chowk,
Mantralaya,
Mumbai 400 032, dated the 24th October 2019
NOTIFICATION
REAL ESTATE (REGULATION AND DEVELOPMENT)
ACT, 2016.
No. Misc. 2019/C.R.129/(Part-1)/RR-2.– In exercise
of the powers conferred by sub-section (1) of section
43 of the Real Estate (Regulation and Development)
Act, 2016 (Act No.16 of 2016), and in supersession of
the Government Notification, Housing Department,
No.Rera. 2017/C.R. 116/DVP-2, dated the 28th
December 2017, the Government of Maharashtra
establishes the Maharashtra Real Estate Appellate
Tribunal for the State of Maharashtra consisting of the
following, as may be appointed, from time to time.:–
(i) A Retired High Court Judge,
(ii) A Judicial Member; and
(iii) An Administrative/Technical Member.
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The said Tribunal has been functional with effect from
the 24th December 2018.
By order and in the name of the Governor of
Maharashtra,
R.K. Dhanawade
Deputy Secretary to Government”
(Emphasis added)
41. Thus, the above aspects show that the State of Maharashtra by
notification dated 28th December 2017 designated the Maharashtra
Revenue Tribunal at Brihanmumbai constituted and functioning under
the Maharashtra Revenue Code to be the Appellate Tribunal to hear
appeals under RERA until the establishment of Real Estate Appellate
Tribunal under Section 43 of the RERA. The Government of
Maharashtra appointed the Chairperson and members of the
Maharashtra Real Estate Appellate Tribunal by Government Resolution
dated 8th May 2018. The said Chairperson and members took oath on
24th December 2018. Thus, the Maharashtra Real Estate Appellate
Tribunal started functioning with effect from 24th December 2018.
42. Thus, it is clear that the Appellate Tribunal came into existence
only on 24th December 2018 on which date the Chairperson and other
members took oath. The establishment of Appellate Tribunal as
envisaged under Section 43 will have to be understood in this manner
only. Otherwise, the effect is although the Appellate Tribunal has not
97
SA 251.2022.doc 29.12actually come into existence, it will have to be assumed that the same is
established. If the contention of the Appellants are accepted then the
effect will be transfer of Appeals filed under RERA being adjudicated by
Maharashtra Revenue Tribunal in its capacity as Maharashtra Real
Estate Appellate Tribunal to the non-existing and non-functional
Maharashtra Real Estate Appellate Tribunal. It is very clear that the
Maharashtra Real Estate Appellate Tribunal stands established and
come into existence in accordance with section 43(1) read with Rule 8
of said Rules only after the Chairperson and members are appointed
and they enter their office after taking oath.
43. It is submitted by learned Counsel on behalf of the Appellant that
by Notification dated 8th May 2018 the Chairman, Judicial Member and
Technical Member of RERA Appellate Tribunal were appointed and
therefore, the date of establishment of the Appellate Tribunal is 8 th May
2018 and till the date of taking oath by the Chairperson and members
which took place on 24th December 2018 it has to be assumed that the
said post has remained vacant, although the Appellate Tribunal was
established on 8th May 2018. It is submitted that unless the Maharashtra
Real Estate Appellate Tribunal is established there can not be the
notification appointing the Chairperson and the members of the Real
Estate Appellate Tribunal. It is submitted that, thus the said Government
98
SA 251.2022.doc 29.12Resolution dated 8th May 2018 appointing the Chairperson and
members for the said Appellate Tribunal be deemed to be notification
establishing the Appellate Tribunal. It is thus submitted that the
establishment of the Appellate Tribunal as contemplated under sub-
section (1) of section 43 read with second proviso to sub-section (4) of
section 43 has taken place on 8 th May 2018 and therefore, the
Maharashtra Revenue Tribunal has no jurisdiction to deal with the said
appeals. Thus, it is submitted that the impugned order dated 1 st
November 2018 passed by the learned President, Maharashtra Revenue
Tribunal and Incharge, Maharashtra Real Estate Appellate Tribunal,
Mumbai is without jurisdiction.
44. As already noted herein above, Rule 8 of Real Estate Appellate
Tribunal Rules specifically provides that the Chairperson and Member of
the Appellate Tribunal shall before entering office make and subscribe
an oath of office and secrecy which has taken place on 24 th December
2018. Thus, it is clear that till 24 th December 2018 there is no Appellate
Tribunal established.
45. In support of the above contentions, the Appellants have very
heavily relied on the Government Resolution dated 8th May 2018.
However, perusal of the said Government Resolution clearly shows that
the said Government Resolution has been issued by exercising power
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SA 251.2022.doc 29.12under Section 46(2) and (3) of RERA and by which Chairman and
Members as provided under Section 45 of RERA have been appointed.
46. In this behalf it is relevant to note that Section 43 of RERA is
concerning establishment of Real Estate Appellate Tribunal, Section 45
is regarding composition of Appellate Tribunal, Section 46 is concerning
qualifications for appointment of Chairperson and Members and inter
alia provides of manner of selection of Chairperson and Members and
manner of their appointment, Section 47 is concerning term of office of
Chairperson and Members, Section 48 is concerning salary and
allowances payable to Chairperson and Members. Thus, it is clear that
the scope and ambit of all these Sections is different. By no stretch of
imagination, it can be said that issuance of Governement Resolution
appointing the Chairperson and Members made by appropriate
Government i.e. Government of Maharashtra in this particular case, by
exercising power under Section 46(2) and (3) can be considered as
notification establishing Appellate Tribunal under Section 43 of the said
Act.
47. In this behalf, it is very relevant to note that as set out herein
above by Government Resolution dated 8th May 2018 the Government
of Maharashtra appointed Chairman and Members of Appellate Tribunal
and they took oath before entering the office on 24th December 2018.
Pursuance of the same the State Government issued notification dated
100
SA 251.2022.doc 29.1224th October 2019 under Section 43(1) of the RERA by which the
Government Notification dated 28th December 2017 was superseded
and the Maharashtra Real Estate Appellate Tribunal was established for
the State of Maharashtra consisting of a retired High Court Judge, a
Judicial Member and an Administrative/Technical Member and further
specifically mentioning that the Appellate Tribunal has been functional
with effect from 24th December 2018. Thus, it is clear that the
notification establishing the Appellate Tribunal has been issued by the
State Government by exercising powers conferred Sub-Section (1) of
Section 43 of RERA on 24th October 2019 specifying that the
Maharashtra Real Estate Appellate Tribunal is functioning from 24 th
December 2018. Thus, it has to be held that the Maharashtra Real
Estate Appellate Tribunal was established on 24th December 2018.
Thus, when the impugned Orders were passed on 1st November 2018,
the learned President, Maharashtra Revenue Tribunal, Mumbai was
acting as Designated Maharashtra Real Estate Appellate Tribunal,
Mumbai pursuant to notification dated 28th December 2017 issued in
exercise of the powers conferred by the first proviso to Sub-Section (4)
of Section 43 of RERA. The said notification dated 28th December 2017
has been superseded by Government Notification dated 24th October
2019 w.e.f. 24th December 2018. Thus, it is very clear that the
Maharashtra Real Estate Appellate Tribunal was established on 24th
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SA 251.2022.doc 29.12December 2018 and started functioning w.e.f. the said date.
48. It is submitted by learned Counsel of the Appellants that by
Notification dated 8th May 2018 the Chairman, Judicial Member and
Technical Member of RERA Appellate Tribunal were appointed and as
by Notification dated 8th May 2018 the Chairperson and Member were
appointed the same has to be treated as Notification issued under
Section 43 (1) and not Notification under Section 46(2) and (3) of the
said Act. It is submitted on behalf of the Appellant that in Sub-Section
(1) of Section 43 and in second proviso to Sub-Section (4) of Section
43, the word used is “establish” and, therefore, the same has to be given
same meaning.
49. However, it is required to be noted that the said Government
Resolution dated 8th May 2018 has been specifically issued under
Section 46(2) and (3) of the RERA. By the said Government Resolution,
Chairperson and Members of Maharashtra Real Estate Appellate
Tribunal were appointed. The Notification which is required to be
issued under Sub-Section (1) of Section 43 establishing Appellate
Tribunal cannot be equated with the Government Resolution issued
under Section 46(2) and (3) of RERA. Both these Sections i.e. Section
43 and Section 46 operate in different sphere. Section 43 is concerning
establishment of Real Estate Appellate Tribunal whereas Section 46 is
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SA 251.2022.doc 29.12concerning qualification for appointment of Chairperson and Members
of Real Estate Appellate Tribunal and the manner of their selection.
Thus, there is no substance in the contention raised on behalf of the
Appellants.
50. One of the contention raised by learned Counsel appearing for
the Appellants is that establishment of the Maharashtra Real Estate
Appellate Tribunal is an event which will take place only on one
occasion and the taking of oath of office and secrecy as contemplated by
Rule 8 of Real Estate Appellate Tribunal Rules, will take place as and
when new appointments are made. Thus, it is submitted that taking of
oath of office and secrecy, before entering upon the office by
Chairperson and members on 24th December 2018 is totally irrelevant
and the establishment of the Maharashtra Real Estate Appellate
Tribunal has taken place on 8th May 2018. The scope and ambit of
Goverment Resolution dated 8th May 2018 issued by exercising powers
under Section 46(2) and (3) of RERA and also of notification dated 24 th
October 2018 issued by exercising powers under Sub-section (1) of
Section 43 of RERA has been discussed herein above in detail. It is
correct that establishment of the Maharashtra Real Estate Appellate
Tribunal is an event which will take place only on one occasion and the
taking of oath of office and secrecy as contemplated by Rule 8 of Real
Estate Appellate Tribunal Rules, will take place as and when new
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SA 251.2022.doc 29.12
appointments are made. However, as already discussed herein above in
detail and more particularly in view of notification dated 24 th October
2019, by giving elaborate reasons it has been held that the
establishment of the Maharashtra Real Estate Appellate Tribunal took
place on 24th December 2018 and not on 8 th May 2018 as contended by
the Appellants. While discussing the said point, apart from other aspects
the scheme of the act has also been taken into consideration. As the
Government Resolution dated 8th May 2018 has been issued by
exercising powers under Sections 46(2) and (3) of RERA, the said
Government Resolution by no stretch of imagination can be held to be
notification issued under Sub-section (1) of Section 43 of RERA of
establishing Maharashtra Real Estate Appellate Tribunal.
51. Learned Counsel of the Appellants relied on the decision of the
Supreme Court in Allahabad Bank (supra) and submitted that as soon
as notification appointing Maharashtra Real Estate Appellate Tribunal
has been issued the designated Appellate Tribunal i.e. Maharashtra
Revenue Tribunal ceases to have jurisdiction. Learned Senior Counsel
therefore, submits that as soon as the above referred notification dated
08th May 2018 was issued, in terms of the law laid down in Allahabad
Bank (supra), the Maharashtra Revenue Tribunal will have no
jurisdiction and all the appeals shall stand transferred to Maharashtra
Real Estate Appellate Tribunal.
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52. To appreciate this contention it is required to be noted that, in
Allahabad Bank (supra) the Supreme Court was considering Sections 17
and 18 of the Recovery of Debts and Bankruptcy Act, 1993 (“RDB Act”).
53. It is relevant to note Paragraph Nos.20 to 25 of the decision in
Allahabad Bank (supra), which reads as under :-
“20. We shall refer to Sections 17 and 18 in Chapter
III of the RDB Act, which deal with adjudication of
the debt“17. Jurisdiction, powers and authority of
Tribunals (1) A Tribunal shall exercise, on and
from the appointed day, the jurisdiction, powers
and authority to entertain and decide applications
from the banks and financial b institutions for
recovery of debts due to such banks and financial
institutions.
(2) An Appellate Tribunal shall exercise, on and from
the appointed day, the jurisdiction, powers and
authority to entertain appeals against any order
made, or deemed to have been made, by a Tribunal
under this Act.
18. Bar of jurisdiction. On and from the appointed
day, no court or other authority shall have, or be
entitled to exercise, any jurisdiction, powers or
authority (except the Supreme Court, and a High
Court exercising jurisdiction under Article 226 and
227 of the Constitution) in relation to the matters
specified in Section 17.”
It is clear from Section 17 of the Act that the Tribunal
is to decide the applications of the banks and
financial institutions for recovery of debts due to
them. We have already referred to the definition of
“debt” in Section 2(g) as amended by Ordinance 1 of
2000. It includes “claims” by banks and financial
institutions and includes the liability incurred and
also liability under a decree or otherwise. In this
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context Section 31 of the Act is also relevant. That
section deals with transfer of pending suits or
proceedings to the Tribunal. In our view, the word
“proceedings” in Section 31 includes “execution
proceedings” pending before a civil court before the
commencement of the Act. The suits and proceedings
so pending on the date of the Act stand transferred to
the Tribunal and have to be disposed of “in the same
manner” as applications under Section 19.
21. In our opinion, the jurisdiction of the Tribunal in
regard to adjudication is exclusive. The RDB Act
requires the Tribunal alone to decide applications for
recovery of debts due to banks or financial
institutions. Once the Tribunal passes an order that
the debt is due, the Tribunal has to issue a certificate
under Section 19(22) [formerly under Section 19(7)]
to the Recovery Officer for recovery of the debt
specified in the certificate. The question arises as to
the meaning of the word “recovery” in Section 17 of
the Act. It appears to us that basically the Tribunal is
to adjudicate the liability g of the defendant and then
it has to issue a certificate under Section 19(22).
Under Section 18, the jurisdiction of any other court
or authority which would otherwise have had
jurisdiction but for the provisions of the Act, is ousted
and the power to adjudicate upon the liability is
exclusively vested in the Tribunal. (This exclusion
does not however apply to the jurisdiction of the
Supreme Court or of a High Court exercising power
under Articles 226 or h 227 of the Constitution.) This
is the effect of Sections 17 and 18 of the Act .
22. We hold that the provisions of Sections 17 and 18
of the RDB Act are exclusive so far as the question of
adjudication of the liability of the a defendant to the
appellant Bank is concerned.
(ii) Execution of certificate by Recovery Officer: is his
jurisdiction exclusive
23. Even in regard to “execution”, the jurisdiction of
the Recovery Officer is exclusive. Now a procedure
has been laid down in the Act for recovery of the debt
as per the certificate issued by the Tribunal and this
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procedure is contained in Chapter V of the Act and is
covered by Sections 25 bto 30. It is not the
intendment of the Act that while the basic liability of
the defendant is to be decided by the Tribunal under
Section 17, the banks/financial institutions should go
to the civil court or the Company Court or some other
authority outside the Act for the actual realisation of
the amount. The certificate granted under Section
19(22) has, in our opinion, to be executed only by
the Recovery Officer. No dual jurisdictions at different
stages are contemplated. Further, Section 34 of the
Act gives overriding effect to the provisions of the
RDB Act. That section reads as follows:
“34. (1) Act to have overriding effect (1) Save as
provided under sub-section (2), the provisions of this
Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law for
the time being in force or in any instrument having
effect by virtue of any law other than this Act.
(2) The provisions of this Act or the rules made
thereunder shall be in addition to, and not in
derogation of, the Industrial Finance Corporation Act,
1948 (15 of 1948), the State Financial Corporations
Act, 1951 (63 of 1951), the Unit Trust of India Act,
1963 (52 of 1963), the Industrial Reconstruction
Bank of India Act, 1984 (62 of 1984) and the Sick
Industrial Companies (Special Provisions) Act, 1985
(1 of 1986).”
The provisions of Section 34(1) clearly state that the
RDB Act overrides other laws to the extent of
“inconsistency”. In our opinion, the prescription of an
exclusive Tribunal both for adjudication and
execution is a procedure clearly inconsistent with
realisation of these debts in any other manner.
24. There is one more reason as to why it must be
held that the jurisdiction of the Recovery Officer is
exclusive. The Tiwari Committee which
recommended the constitution of a Special Tribunal
in 1981 for recovery of debts due to banks and
financial institutions stated in its report that the
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exclusive jurisdiction of the Tribunal must relate not
only in regard to the adjudication of the liability but
also in regard to the execution proceedings. It stated
in Annexure XI of its report that all “execution
proceedings” must be taken up only by the Special
Tribunal under the Act. In our opinion, in view of the
special procedure for recovery prescribed in Chapter
V of the Act, and Section 34, execution of the
certificate is also within the exclusive jurisdiction of
the Recovery Officer.
25. Thus, the adjudication of liability and the
recovery of the amount by execution of the certificate
are respectively within the exclusive jurisdiction h of
the Tribunal and the Recovery Officer and no other
court or authority much less the civil court or the
Company Court can go into the said questions
relating to the liability and the recovery except as
provided in the Act. Point 1 is decided accordingly. ”
(Emphasis added)
54. Perusal of Sections 17 and 18 of RDB Act and also above
discussion in the case of Allahabad Bank (supra) shows that the point
involved in the said case is concerning exclusive jurisdiction of Debts
Tribunals in view of specific provision of Sections 17, 18 and as also
Section 34 of RDB Act and not the question which is before this Court.
It is significant to note that Sub-Section (1) of Section 17 of the RDB
Act which is concerning jurisdiction, powers and authority of Tribunals
provides that a Tribunal shall exercise on and from the appointed date,
the jurisdiction, powers and authority to entertain and decide
applications from the bank and financial institutions for recovery of
debts due to such banks and financial institutions. Sub-Section (2) of
Section 17 of the RDB Act which is concerning jurisdiction, powers and
108
SA 251.2022.doc 29.12authority of Appellate Tribunal provides that an Appellate Tribunal shall
exercise, on and from the appointed date, the jurisdiction, powers and
authority to entertain appeals against any order made or deemed to
have been made by a Tribunal under the RDB Act. Thus, it is significant
to note that Section 17 of the RDB Act provides that “from the
appointed day” the Tribunal and Appellate Tribunal will have
jurisdiction. This is not the point involved in this matter. Before this
Court the question involved is what is scope and ambit of the term
“establish” as used in Section 43 of the RERA. The said point arising
before this Court has been discussed extensively herein above. Thus, the
judgment of the Allahabad Bank (supra) will have no application in this
particular case.
55. The Appellants have also relied on the decision in the case of
Hara Parbati Cold Storage Pvt. Ltd (supra). However, the said decision
is on the basis of decision in the case of Allahabad Bank (supra), which
has been extensively discussed herein above.
56. Reliance is also placed by learned Counsel appearing for the
Appellants on the decision of learned National Company Law Appellate
Tribunal, Principal Bench, New Delhi and more particularly on
Paragraph Nos.54 and 55 of the same, which reads as under:
“54. The next arguments of the Appellant is that Section
434 of the Act was made operative from 01.06.2016 by
notification no. S.O. 1936(E) which provides that in exercise
of the powers conferred by clause (a) of sub-section (1) of109
SA 251.2022.doc 29.12Section 434 of the Act, 2013 (18 of 2013), ‘the Central
Government hereby appoints the 1st day of June, 2016, on
which all matters or proceedings or cases pending before the
CLB shall stand transferred to the NCLT and it shall dispose of
such matters or proceedings or cases in accordance with the
provisions of the Act, 2013 or the Companies Act, 1956‘.”
55. Since, the CLB was not having the jurisdiction or
power to issue contempt notice on the alleged disobedience of
its order, therefore, 3A Capital rightly did not file any
application before the CLB which was thus not pending as on
01.06.2016 when Section 434 of the Act was made operative.
Even otherwise, Section 434(1)(a) of the Act categorically
provides that all matters, proceedings or cases pending before
the CLB, immediately before such date shall stand transferred
to the Tribunal and the Tribunal shall dispose of such matters,
proceedings or cases in accordance with the provisions of this
Act. It means that the proceedings, cases or matters which
were pending as on 01.06.2016 before the CLB shall
automatically be transferred to the Tribunal but if the
proceedings are not pending on that date then it cannot be
transferred automatically to the Tribunal.”
The above Paragraphs clearly shows that the said Judgment is in the
context of Section 434 of the Companies Act, 2013. In that case, the
Central Government has appointed the 1 st day of June 2016, on which
date all matters or proceedings or cases pending before the Company
Law Board (CLB) shall stand transferred to the NCLT. Thus, in that case
a specific date has been appointed by the Central Government for the
purpose of transfer of the cases from CLB to NCLT. However, in the
present case, as discussed herein above extensively the issue is
completely different and, therefore, the said Judgment will have no
application to the facts of the present case.
57. Learned Counsel of the Appellants also relied on the judgment of
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the Supreme Court in the case of Sushil Kumar Mehta (supra). The
relevant Paragraph is Paragraph No.26, which reads as under :-
“26. Thus it is settled law that normally a decree
passed by a court of competent jurisdiction, after
adjudication on merits of the rights of the parties,
operates as res judicata in a subsequent suit or
proceedings and binds the parties or the persons
claiming right, title or interest from the parties. Its
validity should be assailed only in an appeal or
revision as the case may be. In subsequent
proceedings its validity cannot be questioned. A
decree passed by a court without jurisdiction over
the subject matter or on other grounds which goes
to the root of its exercise or jurisdiction, lacks
inherent jurisdiction. It is a coram non judice. A
decree passed by such a court is a nullity and is
non est. Its invalidity can be set up whenever it is
sought to be enforced or is acted upon as a
foundation for a right, even at the stage of
execution or in collateral proceedings. The defect
of jurisdiction strikes at the authority of the court
to pass a decree which cannot be cured by consent
or waiver of the party. If the court has jurisdiction
but there is defect in its exercise which does not go
to the root of its authority, such a defect like
pecuniary or territorial could be waived by the
party. They could be corrected by way of
appropriate plea at its inception or in appellate or
revisional forums, provided law permits. The
doctrine of res judicata under Section 11 CPC is
founded on public policy. An issue of fact or law or
mixed question of fact and law, which are in issue
in an earlier suit or might and ought to be raised
between the same parties or persons claiming
under them and was adjudicated or allowed
uncontested becomes final and binds the parties or
persons claiming under them. Thus the decision of
a competent court over the matter in issue may
operate as res judicata in subsequent suit or
proceedings or in other proceedings between the
same parties and those claiming under them. But111
SA 251.2022.doc 29.12the question relating to the interpretation of a
statute touching the jurisdiction of a court
unrelated to questions of fact or law or mixed
questions does not operate as res judicata even
between the parties or persons claiming under
them. The reason is obvious; a pure question of
law unrelated to facts which are the basis or
foundation of a right, cannot be deemed to be a
matter in issue. The principle of res judicata is a
facet of procedure but not of substantive law. The
decision on an issue of law founded on fact in issue
would operate as res judicata. But when the law
has since the earlier decision been altered by a
com-petent authority or when the earlier decision
declares a transaction to be valid despite
prohibition by law it does not operate as res
judicata. Thus a question of jurisdiction of a court
or of a procedure or a pure question of law
unrelated to the right of the parties founded purely
on question of fact in the previous suit, is not res
judicata in the subsequent suit. A question relating
to jurisdiction of a court or interpretation of
provisions of a statute cannot be deemed to have
been finally determined by an erroneous decision
of a court. Therefore, the doctrine of res judicata
does not apply to a case of decree of nullity. If the
court inherently lacks jurisdiction consent cannot
confer jurisdiction. Where certain statutory rights
in a welfare legislation are created, the doctrine of
waiver also does not apply to a case of decree
where the court inherently lacks juris-diction.”
(Emphasis added)
58. The Supreme Court in the case of Sushil Kumar Mehta (supra)
was considering the issue of res judicata particularly in case of a
decision which has been passed in a proceeding without jurisdiction and
therefore, the same is a nullity. As held herein above by giving elaborate
reasons it has been held by this Court that the designated Appellate
Tribunal i.e. Maharashtra Revenue Tribunal has jurisdiction to deal with
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the Appeal under RERA upto 23rd December 2018 and, therefore, the
impugned Order dated 1st November 2018 passed by the learned
President, Maharashtra Revenue Tribunal, Mumbai and Incharge,
Maharashtra Real Estate Appellate Tribunal, Mumbai is within
jurisdiction. Therefore, the said decision in the case of Sushil Kumar
Mehta (supra) is not applicable.
59. Learned Counsel of the Appellants have also relied on the
decision of Hasham Abbass Sayyad (supra) and Harshad Chiman Lal
Modi (supra) to support the contention regarding issue of jurisdiction.
However, by elaborately considering the scheme of RERA, the objects
and reasons for enacting RERA and by interpreting Section 43 of RERA
read with Rule 8 of Real Estate Appellate Tribunal Rules it has already
been held herein above that the designated Appellate Tribunal i.e.
Maharashtra Revenue Tribunal and Incharge, Maharashtra Real Estate
Appellate Tribunal has jurisdiction to decide the said issue. Therefore,
these decisions have no application to this case.
60. Learned Counsel of the Appellants has relied on the decision of
the Supreme Court in the case of Baswaraj (supra) as also
Commissioner of Agricultural Income Tax (supra) and submitted that a
statutory provision may cause hardship or inconvenience to a particular
party but the Court has no choice but to enforce it giving full effect to
the same. Learned Counsel submitted that as in view of clear and
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unambiguous provision of Section 43 of the RERA and in view of
notification dated 8th May 2018, all appeals which are pending before
the Maharashtra Revenue Tribunal shall stand transferred to
Maharashtra RERA Appellate Tribunal. Learned Counsel more
particularly relied on Paragraph No.12 of Baswaraj (supra), which reads
as under :-
“12. It is a settled legal proposition that law of
limitation may harshly affect a particular party but
it has to be applied with all its rigour when the
statute so prescribes. The court has no power to
extend the period off limitation on equitable
grounds. “A result flowing from a statutory
provision is never an evil. A court has no power to
ignore that provision to relieve what It considers a
distress resulting from its operation.” The statutory
provision may cause hardship or inconvenience to a
particular party but the court has no choice but to
enforce it giving full effect to the same. The legal
maxim dura lex sed lex which means “the law is
hard but it is the law”, stands attracted in such a
situation. It has consistently been held that,
“inconvenience is not” a decisive factor to be
considered while interpreting a statute.”
(Emphasis added)
61. The above legal position is well settled. There is no manner of
doubt that once Maharashtra RERA Appellate Tribunal is established all
appeals which are pending before designated Appellate Tribunal i.e.
Maharashtra Revenue Tribunal shall stand transferred to Maharashtra
RERA Appellate Tribunal. Therefore, the issue which is involved in this
Second Appeals is the scope of the term “established” as in Section 43 of
RERA, which has been discussed in earlier part of the judgment
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extensively. As held herein above the Maharashtra RERA Appellate
Tribunal has established from the date on which the same has become
functional i.e. with effect from 24th December 2018 and the same is very
clear from the Notification dated 24 th October 2019 issued by the State
of Maharashtra under Sub-Section (1) of Section 43 of the RERA.
Therefore, the impugned decision of learned President, Maharashtra
Revenue Tribunal, Mumbai and Incharge, Real Estate Appellate
Tribunal, Mumbai dated 1st November 2018 is within jurisdiction. It is
very clear that all appeals which were pending before the designated
Appellate Tribunal i.e. Maharashtra Revenue Tribunal and Incharge,
Real Estate Appellate Tribunal, Mumbai shall stand transferred on 24 th
December 2018 immediately to Real Estate Appellate Tribunal, Mumbai.
62. Mr. Kamat, learned Senior Counsel relied on judgment of High
Court of Jharkhand at Ranchi in the matter of Arjun Kumar Singh
(supra). Paragraph No.4 of the said judgment, reads as under :-
“4. Learned counsel appearing for the appellant
has submitted that the petitioner was, working as
Signal Man/Sipoyee in the Indian Army and Major
General, Ground Officer Commanding (GOC), 23rd
Infantry Division, passed an order of discharge of
this petitioner and therefore, the petition was
preferred initially, before the Hon’ble Patna High
Court and thereafter. before this High Court under
Article 226 of the Constitution of India, thereafter,
Armed Forces Tribunal came into force vide
Notification dated 18.11.2009/ The Armed Forces
Tribunal at Kolkata came into force and the said
Tribunal is working since 23.11.2009 and therefore,
by virtue of Section 34 of the Armed Forces Tribunal115
SA 251.2022.doc 29.12Act, 2007 (hereinafter referred to as the Act, 2007
for the sake of brevity), the writ petition bearing
W.P. (S) No. 1769 of 2004 stood transferred to the
said Armed Forces Tribunal, automatically, by virtue
of Sub-section (1) of Section 34 of the Act. 2007
and hence, the judgment and order passed by the
learned Single Judge deserves to be quashed and set
aside because there was want of jurisdiction on the
part of this Court and this appellant (original
petitioner) is ready and willing to go before the
Armed Forces Tribunal at Kolkata and shall
cooperate in hearing before the said Tribunal and
shall not ask for unnecessary adjournments and
shall also cooperate in earlier disposal of this
petition on merit.”
(Emphasis added)
63. It is significant to note that in the said decision of Arjun Kumar
Singh (supra) the Armed Forces Tribunal came into force vide
notification dated 18th November 2009 and the said tribunal started
working since 23rd November 2009 and therefore it has been held that
the Writ Petition pending before the High Court Jharkhand stood
transferred to the said Armed Forces Tribunal automatically by virtue of
Section 34 of Armed Forces Tribunal Act, 2007. Thus, in fact the said
decision supports the contention of the Respondent that what is
contemplated by “establishment” of the tribunal is establishment of
functional tribunal. In any case, the said aspect in the context of the
provisions of RERA have been extensively discussed earlier. Thus, the
said decision is not relevant.
64. Learned Counsel of the Appellants also relied on judgment of
Supreme Court in the case of B. Premanand (supra) and more
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particularly on Paragraph Nos.15 and 16 of the same which reads as
under :-
“15. As observed by this Court in CIT (Ag) v. Keshab Chandra
Mandalto: a AIR-p. 270, para 20)“20…. Hardship or inconvenience cannot alter the
meaning of the language employed by the
legislature if such meaning is clear on the face of
the statute….”
(emphasis supplied)
16. Where the words are unequivocal, there is no scope for
importing any rule of interpretation (vide Pandian Chemicals
Ltd. v. CIP). It is only where b the provisions of a statute are
ambiguous that the court can depart from a literal or strict
construction (vide Nasiruddin v. Sita Ram Agarwal 2), Where
the words of a statute are plain and unambiguous effect must
be given to them (vide Bhaiji v. SDO).”
(Emphasis added)
65. It is also relevant to note Paragraph No.17 of the said decision of
B. Premanand (supra), which reads as under :-
“17. No doubt in some exceptional cases departure
can be made from the literal rule of the
interpretation, e.g. by adopting a purposive
construction, Heydon mischief rule, etc. but that
should only be done in very exceptional cases.
Ordinarily, it is not proper for the court to depart
from the literal rule as that would really be
amending the law in the garb of interpretation,
which is not permissible (vide J.P. Bansal v. State of
Rajasthan‘s and State of Jharkhand v. Govind
Singh16). It is for the legislature to amend the law
and not the court (vide State of Jharkhand v.
Govind Singh).”
66. This aspect has been elaborately discussed herein above. In any
case, establishment of Maharashtra RERA Appellate Tribunal on paper
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cannot be considered as “establishment” unless the Chairman and the
Members take oath as they enter their respective Offices only after
taking oath.
67. Learned Counsel of the Appellants also relied on the decision of
House of Lords in the case of Britnell (supra) and more particularly
on the following paragraph :-
“The purpose of a transitional provision being to
facilitate the change from one statutory regime to
another, it could not properly be regarded as
authorising innovation by widening the ambit of
the substantive legislation.
As Staughton LJ observed in the Court of Appeal, it
is not possible to give a definitive description of
what constitutes a transitional provision. In
Thornton on Legislative Drafting (3rd edn, 1987) p
319 it is said:
The function of a transitional provision is to make
special provision for the application of legislation
to the circumstances which exist at the time when
that legislation comes into force.’One feature of a transitional provision is that its
operation is expected to be temporary, in that it
becomes spent when all the past circumstances
with which it is designed to deal have been dealt
with, while the primary legislation continues to
deal indefinitely with the new circumstances which
arise after its passage.”
(Emphasis added)
68. It is correct that the purpose of a transitional provision being to
facilitate the change from one statutory regime to another could not
properly be regarded as authorizing innovation by widening the ambit
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of the substantive legislation. However, in this particular case, the
Government Resolution dated 8th May 2018 by which Chairperson and
Members of the Appellate Tribunal were appointed cannot be held to
be the Notification issued under Sub-Section (1) of Section 43 of
RERA. As discussed extensively herein above that the Notification
dated 24th October 2019 has been issued under Sub-Section (1) of
Section 43 of RERA by which the Maharashtra Real Estate Appellate
Tribunal has been established w.e.f. 24 th December 2018. Thus, there
is no question of establishment of the Maharashtra Real Estate
Appellate Tribunal on 8th May 2018. It is further significant to note
that by the said notification, notification dated 28 th December 2017 by
which Maharashtra Revenue Tribunal at Bruhanmumbai Constituted
and functioning under the Maharashtra Revenue Code, 1966 was
designated to be the Appellate Tribunal under RERA is superseded
and it is specifically recorded that the tribunal started functioning
with effect from 24th December 2018. Thus, the said decision in
Britnell (supra) has no application.
69. Learned Counsel of the Appellants have relied on the decision of
the Supreme Court in the case of Nelson Motis (supra) and more
particularly on paragraph no.8 of the same. In the said case it has
been held that if the words of a statute are clear and free from any
vagueness and are, therefore, reasonably susceptible to only one
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meaning, it must be construed by giving effect to that meaning,
irrespective of consequences. When the language is plain and
unambiguous and admits of only one meaning, no question of
construction of a statute arises, for the act speaks for itself. This
aspect has already been discussed in earlier part of the judgment. It is
settled legal position that the provisions of the Act must receive such
construction at the hands of the court as would advance the object
and purpose underlying the Act and at any rate not to defeat it. If the
words of the statute are clear and unambiguous, it is the plainest duty
of the court to give effect to the natural meaning of the words used in
the provision. The question of construction arises only in the event of
an ambiguity or the plain meaning of the words used in the statute
would be self-defeating. As Section 43 clearly contemplates that the
Appropirate Government shall appoint Maharashtra Real Estate
Appellate Tribunal and until that time any Appellate Tribunal
functioning under any law to be designated as Appellate Tribunal to
hear and dispose of appeals filed under RERA and accordingly,
Maharashtra Revenue Tribunal has been designated as Appellate
Tribunal. This aspect has already been elaborately discussed earlier. In
any case, Maharashtra Real Estate Appellate Tribunal was established
by notification dated 24th October 2019 with effect form 24th
December 2018 and therefore there is no substance in the contention
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raised by the Appellants.
70. Learned Counsel of the Appellants has also relied on the decision
of the Supreme Court in the case of Sansera Engineering (supra) and
submitted that the subordinate legislation cannot override the parent
statute. Subordinate legislation can always be in aid of the parent
statute. At the cost of repetition, it is observed that subordinate
legislation cannot override the parent statute. Subordinate legislation
which is in aid of the parent statute has to be read in harmony with
the parent statute. Subordinate legislation cannot be interpreted in
such a manner that parent statute may become otiose or nugatory.
This submission is made in view of Rule 8 of the Real Estate Appellate
Tribunal Rules and on the assumption that the Maharashtra Real
Estate Appellate Tribunal was established by Government Resolution
dated 8th May 2018. The observations of the Supreme Court in
Sansera Engineering (supra) are not at all applicable to the present
case. The scope of Rule 8 of Real Estate Appellate Tribunal Rules is
totally different which provides that every person appointed as the
Chairperson of the Appellate Tribunal shall before entering upon his
office shall make and subscribe an oath of Office and Secrecy in
prescribed format. As discussed extensively herein above that the
Notification dated 24th October 2019 has been issued under Sub-
Section (1) of Section 43 of RERA by which the Maharashtra Real
121
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Estate Appellate Tribunal has been established w.e.f. 24 th December
2018. Thus, there is no question of establishment of the Maharashtra
Real Estate Appellate Tribunal on 8 th May 2018. Thus the said
contentions raised are without any basis.
71. Thus, for the above reasons there is no substance in the First
Substantial Question of Law.
72. The Substantial Questions of Law Nos.3, 4 and 5 as framed by
Order dated 12th December 2024 will be considered hereinafter. The
said substantial questions of law are treated as 2nd, 3rd and 4th
substantial questions of law. They are reproduced herein below for
ready reference:
SECOND SUBSTANTIAL QUESTION OF LAW:
Whether, in exercise of power to designate an authority as the
Appellate Tribunal under the first proviso to Section 43(4) of
RERA, it is necessary for the State Government to give due
regard to the provisions of Section 43(3) of RERA and ensure
that the composition of such alternate authority is in
accordance therewith?
THIRD SUBSTANTIAL QUESTION OF LAW:
Whether in exercise of power under the first proviso to
Section 43(4) of RERA, the State Government (as the
delegatee of such power) can designate an authority to
function as the Appellate Tribunal in a manner contrary to or
ultra vires Section 43(3) of RERA?
FOURTH SUBSTANTIAL QUESTION OF LAW:
Whether a single member bench of the Hon’ble Maharashtra
Revenue Tribunal, exercising power under the first proviso to
Section 43(4) of RERA has jurisdiction to adjudicate appeals
under Section 44 of RERA?
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73. The said substantial questions of law are concerning composition
of designated Appellate Tribunal i.e. Maharashtra Revenue Tribunal,
constituted by exercising power conferred by first proviso to sub-section
(4) of section 43 and are raised particularly in view of the provision of
Section 43(3) of RERA, which specifies that every bench of the
Appellate Tribunal shall consist of at least one Judicial Member and one
Administrative or Technical Member. In view of the said contentions,
the above substantial questions of law were framed.
74. As the impugned Order is passed by the President of the
Maharashtra Revenue Tribunal acting as Incharge Chairman of the
Maharashtra Real Estate Appellate Tribunal, it is contended on behalf of
the Appellants that single Member being the President of the Tribunal
who was a Judicial Member has no jurisdiction to pass the impugned
Order. In view of the said contentions the above substantial questions of
law were framed.
75. As these substantial questions of law are interconnected they are
decided together.
SUBMISSIONS OF THE APPELLANTS CONCERNING SECOND, THIRD
AND FOURTH SUBSTANTIAL QUESTIONS OF LAW:
76. Learned Counsels for the Appellants inter alia raised the
following contentions:
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i. The first proviso to Section 43(4) of RERA provides that until the
establishment of the Appellate Tribunal under Section 43(1) of RERA,
the appropriate government shall designate, by order, any Appellate
Tribunal functioning under any law for the time being in force to be the
Appellate Tribunal to hear appeals under RERA. The second proviso to
Section 43(4) of RERA provides that after the Appellate Tribunal under
said Section is established, all matters pending with the Appellate
Tribunal designated to hear appeals, shall stand transferred to the
Appellate Tribunal so established and shall be heard from the stage such
appeal is transferred. Section 43(3) of RERA provides that every bench
of the Appellate Tribunal shall consist of at least one judicial member
and one administrative or technical member. Upon the enforcement of
RERA, in January 2018, the State Government designated the Hon’ble
Maharashtra Revenue Tribunal as the Appellate Tribunal under the first
proviso to Section 43(4) of RERA to act as the Appellate Tribunal,
pending the establishment of the Appellate Tribunal under Section
43(1) of RERA. It is a matter of record that the Maharashtra Revenue
Tribunal hearing appeals under RERA was comprised of a Single
Member, being the President of the Tribunal, who was a Judicial
Member.
ii. It is submitted that under Section 43(3) of the RERA, it is
mandated that every Bench of the Appellate Tribunal shall consists of at
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SA 251.2022.doc 29.12least one Judicial Member and one Administrative or Technical Member.
This Hon’ble Court has, in its judgments in Man Global Ltd vs. Bharat
Prakash Joukani,22 (Paragraph 6) and Larsen and Toubro Ltd vs. Rekha
Sinha23, (Paragraph 6) has held that a single Member of the Appellate
Tribunal does not have jurisdiction to dispose of any appeal or
application, in view of the plain language of Section 43(3) of RERA. In
fact, in the judgment in Larsen and Toubro Ltd. (supra), this Court
expressly held that even the provision of Section 55 of RERA cannot
validate any proceeding by a single Member of the Appellate Tribunal as
the same would be contrary to Section 43(3) of RERA. It is further
submitted that the aforesaid principles of law will apply with equal
force to any Tribunal designated to act as the Appellate Tribunal under
the first proviso to Section 43(4) of RERA. In view thereof, it is
submitted that the Hon’ble Maharashtra Revenue Tribunal acting
through the Hon’ble President sitting singly, and hearing and deciding
appeals filed under Section 44 of the RERA, did not have jurisdiction to
adjudicate upon such appeals.
iii. It is further submitted that, under the first proviso to Section
43(4) of RERA, the Parliament has delegated to the State Government
the power to designate any Appellate Tribunal functioning under any
law to be the Appellate Tribunal to hear appeals under RERA. However,
22 2019 SCC OnLine Bom 2466
23 2019 SCC OnLine Bom 13273125
SA 251.2022.doc 29.12while exercising such delegated power, the State Government cannot
act contrary to or ignore the express provisions of RERA (under which
such delegation takes place), in respect of the composition of the
Appellate Tribunal. It is well settled that a delegatee of power cannot
act contrary to the provisions of the statute and must act within the four
corners of the delegation. In this regard attention of this Hon’ble Court
is invited to the paragraphs 76-77 of the judgment of the Hon’ble
Supreme Court in DDA v. Joint Action Committee, Allottee of SFS
Flats24.
iv. It is submitted that the Hon’ble Supreme Court, in Dr. Mahabal
Ram v. Indian Council of Agricultural Research & Ors. 25, while
considering the validity of Section 5(6) of the Administrative Tribunals
Act, 1985 has held in para 6 that while allocating work under sub-
section (6), the Chairman should keep in mind the nature of the
litigation, and where questions of law and interpretation of
constitutional provisions are involved, they should not be assigned to a
single member.
SUBMISSIONS OF THE RESPONDENTS CONCERNING SECOND,
THIRD AND FOURTH SUBSTANTIAL QUESTIONS OF LAW:
77. Learned Counsels for the Respondents inter alia raised the
24 (2008) 2 SCC 672
25 (1994) 2 SCC 401
126
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following contentions:
i. The section 43(3) contemplates the constitution of “bench” but
not the constitution of the “tribunal”. The first proviso to section 43 (4)
is the proviso for the purpose of making a protem arrangement of
functioning (designate) appellate tribunal (not a Bench) until the
establishment of (permanent) appellant tribunal under section 43 (1).
Which clearly differentiate that any Appellate Tribunal functioning
under any law for the time being inforce can hear the appeals under the
RERA after such designation under first proviso of the section 43(4).
ii. The contentions advanced by the appellant that the bench of the
designated appellate tribunal as per the first proviso of section 43 (4) of
RERA is required to be in consonance with section 43 (3) of RERA is not
valid and correct argument. Because, the first proviso of section 43(4)
does not provide for the constitution of “bench” rather it is an
alternative arrangement of functional designated appellate tribunal for
the purpose of hearing of the appeals till the establishment of the
(permanent) appellate tribunal.
iii. The first proviso of section 43 (4) clearly mandates … “shall
designate, by order, any appellate tribunal functioning under any law
for the time being inforce, …” and give liberty to Government to
designate “any Appellate Tribunal” “functioning under any law” for the
time being inforce. The designated tribunal, MRT was a functioning
127
SA 251.2022.doc 29.12tribunal under the Maharashtra Land Revenue Code at the time of
designation under RERA. It may be noted that the said MRT was
functioning validly as per it’s own establishment under Maharashtra
Land Revenue Code “with single member bench” presided over by a
retired High court judge of Bombay high court. It is reiterated that the
first proviso of sec. 43 (4) has given an alternative to sec. 43 (1) which
is about the establishment of the “appellate tribunal” therefore the same
does not have any relation to the constitution of “bench” and its
members as per sec. 43 (3) of the RERA.
iv. It is submitted that the arguments of quorum non-judice and
subject matter jurisdiction shall only prevail when the said, “any”
Appellate Tribunal functioning under “any” law has not been
constituted as per the said (any) law, under which the said Tribunal has
been constituted and functioning. Hence, contentions advanced on
behalf of appellant about application of section 43(3) to the 43(4) first
proviso is not maintainable in the present factual matrix of the case. It is
not the case of the appellant that the MRT, the designated appellate
tribunal was itself incapacitated because of its erroneous constitution of
the bench under the Maharashtra Land Revenue Code.
v. It is the settled position of the law that the proviso cannot always
be furthering the object of the section instead it’s arrangement may be
completely alien to the provision of the said section, where the proviso
128
SA 251.2022.doc 29.12has been appended. A proviso is added to the principal clause with
objective of taking out the scope of that principal clause what is
included in it and what the legislature desires should be excluded
further. A proviso to a section is intended to take out a part of the main
section for special treatment. The proviso may entirely change the very
concept of the intendment of the enactment by insisting in the certain
mandatory conditions to be fulfilled in order to make enactment
workable. It is therefore submitted that the first proviso of section 43(4)
is supplement to section 43(1) for the purpose of giving an alternate
arrangement for the (Permanent) Appellate Tribunal, functioning under
any law for the intermittent period till the time (Permanent) Appellate
Tribunal is not established under the RERA. Reliance is placed in
support of this contention on S. Sundaram Pillai v. V.R. Pattabhiram26,
the para no.27, 30 sub para f, h and j, para no.32, 33, 37, 39, 42, 43
sub para 2 are relied upon.
REASONING CONCERNING SECOND, THIRD AND FOURTH
SUBSTANTIAL QUESTIONS OF LAW :-
78. While considering the first substantial question of law, this Court
has extensively considered the scheme of Section 43 of RERA. This –
Court has also discussed in detail the important objects and purposes of
RERA and the discussion of M/s Newtech Promoters (supra) of the
Supreme Court concerning objects and purposes of RERA. The legal
26 (1985) 1 SSC 591
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position concerning interpretation of statutes is also discussed in detail.
79. It is settled legal position that the provisions of the Act must
receive such construction at the hands of the court as would advance
the object and purpose underlying the Act and at any rate not to defeat
it. If the words of the statute are clear and unambiguous, it is the
plainest duty of the court to give effect to the natural meaning of the
words used in the provision. The question of construction arises only in
the event of an ambiguity or the plain meaning of the words used in the
statute would be self-defeating. The court is entitled to ascertain the
intention of the legislature to remove the ambiguity by construing the
provision of the statute as a whole keeping in view what was the
mischief when the statute was enacted and to remove which the
legislature enacted the statute. In matters of interpretation one should
not concentrate too much on one word and pay too little attention to
other words. No provision in the statute and no word in any section can
be construed in isolation. Every provision and every word must be
looked at generally and in the context in which it is used. The
elementary principle of interpreting any word while considering a
statute is to gather the sententia legis or mens of the legislature. The
maxim sententia legis or mens contemplates that the essence of the law
lies in the spirit, and not in its letter, the letters are just a way to express
the intentions of the law makers. Where the words are clear and there is
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no obscurity, and there is no ambiguity and the intention of the
legislature is clearly conveyed, there is no scope for the court to take
upon itself the task of amending or altering the statutory provisions. It
is necessary to cull out the legislative policy from various factors like the
words in the statute, the Preamble to the Act, the Statement of Objects
and Reasons, and in a given case, even the attendant circumstances.
After the legislative policy is found, then the words used in the statute
must be so interpreted such that it advances the purpose of the statute
and does not defeat it. A statute must be construed having regard to the
legislative intent. It has to be meaningful. A construction which leads to
manifest absurdity must not be preferred to a construction which would
fulfill the object and purport of the legislative intent.
80. Before applying the above principles of the interpretation of
statutes to Section 43 of RERA, it is necessary to set out hereinbelow
the relevant portion of Section 43 of RERA in the context of these
substantial questions of law :
“43. Establishment of Real Estate Appellate Tribunal.
–(1) The appropriate Government shall, within a
period of one year from the date of coming into force
of this Act, by notification, establish an Appellate
Tribunal to be known as the –(name of the
State/Union territory) Real Estate Appellate Tribunal.
(2) …
(3) Every bench of the Appellate Tribunal shall consist
of at least one Judicial Member and one
Administrative or Technical Member.
(4) …
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Provided that, until the establishment of an Appellate
Tribunal under this section, the appropriate
Government shall designate, by order, any Appellate
Tribunal functioning under any law for the time being
in force, to be the Appellate Tribunal to hear appeals
under the Act:
Provided further that after the Appellate Tribunal
under this section is established, all matters pending
with the Appellate Tribunal designated to hear
appeals, shall stand transferred to the Appellate
Tribunal so established and shall be heard from the
stage such appeal is transferred.
(5) …..
81. The scheme of Section 43 in the context of the substantial
questions of law under consideration is as follows :
(i) The appropriate Government by notification,
establish Real Estate Appellate Tribunal.
(ii) Until the establishment of Real Estate Appellate
Tribunal, the appropriate Government shall designate, by
order, any Appellate Tribunal functioning under any law
for the time being in force, to be the Appellate Tribunal to
hear appeals under RERA.
(iii) After the Real Estate Appellate Tribunal is
established, all matters pending with the Appellate
Tribunal designated to hear appeals, shall stand
transferred to the Appellate Tribunal so established and
shall be heard from the stage such appeal is transferred.
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82. In view of above settled legal position concerning interpretation
of statutes, it is necessary to consider Section 43 of RERA and more
particularly the first proviso to Sub-Section (4) of Section 43 which
provides that until the establishment of an Appellate Tribunal under
Sub-Section (1) of Section 43, the appropriate Government shall
designate, by order, any Appellate Tribunal functioning under any law
for the time being in force, to be the Appellate Tribunal to hear appeals
under the RERA. This proviso is very specific. The words used are clear
and unambiguous. What the first proviso to Sub-Section (4) of Section
43 provides is that until the establishment of an Appellate Tribunal
under Sub-Section (1) of Section 43 the appropriate Government shall
designate by order any Appellate Tribunal functioning under any law
for the time being in force, to be the Appellate Tribunal to hear appeals
under RERA.
83. Learned Counsel of the Respondent is right in contending that the
section 43(3) contemplates the constitution of “bench” but not the
constitution of the “tribunal”. The first proviso to section 43 (4) is the
proviso for the purpose of making a protem arrangement of functioning
(designate) appellate tribunal (not a Bench) until the establishment of
(permanent) appellant tribunal under section 43 (1). Which clearly
differentiate that any Appellate Tribunal functioning under any law for
the time being inforce can hear the appeals under the RERA after such
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designation under first proviso of the section 43(4).
84. It is undisputed that the Government of Maharashtra, by
exercising powers conferred by the first proviso to Sub-Section (4) of
Section 43 of RERA being the appropriate Government designated the
Maharashtra Revenue Tribunal at Brihanmumbai constituted and
functioning under the Maharashtra Land Revenue Code, 1966, to be the
Appellate Tribunal to hear the appeals under RERA, until the
establishment of the Maharashtra Real Estate Appellate Tribunal under
Sub-Section (1) of Section 43 of RERA. Thus, the said notification dated
28th December 2017 has been appropriately issued by exercising
powers conferred by the first proviso to Sub-Section (4) of Section 43 of
RERA.
85. By no stretch of imagination, the constitution of Real Estate
Appellate Tribunal i.e. permanent Appellate Tribunal can be equated
with the designated Appellate Tribunal i.e. temporary Appellate
Tribunal, which is the Appellate Tribunal functioning under any law for
the time being inforce to be designated as the Appellate Tribunal to
hear appeals under RERA as pro-tem arrangement.
86. The contention raised that the first proviso to Sub-Section (4) of
Section 43 is not an independent provision but the same is a part of the
scheme contemplated under Section 43 concerning establishment of the
Real Estate Appellate Tribunal and, therefore, every bench of the
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Appellate Tribunal shall consist of at least one Judicial Member and one
Administrative or Technical Member.
87. Before considering said submission, it is required to be noted that
the first proviso to Sub-Section (4) of Section 43 is the proviso for the
purpose of making a pro tem arrangement, by which Appellate Tribunal
functioning under any law for the time being in force is to be
designated as the Appellate Tribunal to hear appeals under RERA till
formation of regular Real Estate Appellate Tribunal under Sub-Section
(1) of Section 43. Thus, perusal of Sub-Section (1) of Section 43 read
with Sub-Section (3) of Section 43 and the said first proviso to Sub-
Section (4) of Section 43 clearly shows that different provisions are
made for formation and establishment of regular Real Estate Appellate
Tribunal and pro-tem arrangement of temporary designated Appellate
Tribunal i.e. any Appellate Tribunal functioning under any law for the
time being inforce to be designated by the appropriate Government
until establishment of regular Real Estate Appellate Tribunal. The said
provisions are very clear and unambiguous.
88. The requirement of the first proviso to Sub-Section (4) of Section
43 for the purpose of designating an Appellate Tribunal which is
functioning under any law for the time being inforce to be the Appellate
Tribunal to hear appeals under RERA is that the said Appellate Tribunal
is a Appellate Tribunal under any law for the time being inforce and
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such Appellate Tribunal should be functioning under such other law.
Thus, the requirements of composition of the Real Estate Appellate
Tribunal as contemplated under Sub-Sections (1) and (3) of Section 43
read with Section 45 specifying composition of Appellate Tribunal and
Section 46 specifying qualification and the manner in which the
Chairperson and Members to be selected will not apply to pro-tem
arrangement as contemplated under the first proviso to Sub-Section (4)
of Section 43 of RERA. There is no dispute that the designated Tribunal
i.e. Maharashtra Revenue Tribunal is functioning Tribunal under the
Maharashtra Land Revenue Code and the said Tribunal was functioning
validly as per its own establishment under the Maharashtra Land
Revenue Code.
89. As the contentions have been raised by both the sides regarding
scope of a proviso, it is necessary to set out the Judgment of the
Supreme Court in S. Sundaram Pillai (supra). In the said decision, by
analysing various decisions the Supreme Court has set out the different
purposes of proviso. The relevant Paragraph is Paragraph No.43 of the
said decision, which reads as under:
“43. We need not multiply authorities after authorities on
this point because the legal position seems to be clearly and
manifestly well established. To sum up, a proviso may serve
four different purposes:
(1) qualifying or excepting certain provisions from the
main enactment:
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(2) it may entirely change the very concept of the
intendment of the enactment by insisting on certain
mandatory conditions to be fulfilled in order to make the
enactment workable:
(3) it may be so embedded in the Act itself as to become an
integral part of the enactment and thus acquire the tenor
and colour of the substantive enactment itself; and(4) it may be used merely to act as an optional addenda to
the enactment with the sole object of explaining the real
intendment of the statutory provision.”
(Emphasis added)
90. Thus, there is substance in the contention raised by the learned
Counsel appearing for the Respondents that the first proviso of section
43(4) is supplement to section 43(1) for the purpose of giving an
alternate arrangement for the (Permanent) Appellate Tribunal,
functioning under any law for the intermittent period till the time
(Permanent) Appellate Tribunal is not established under the RERA.
91. In fact, in this particular case, first proviso to Sub-Section (4) of
Section 43 is a specific different arrangement i.e. pro-tem arrangement
till the formation and establishment of the Real Estate Appellate
Tribunal as contemplated under Sub-Section (1) of Section 43. The said
first proviso clearly shows that the same is a pro-tem arrangement for
hearing appeals under RERA immediately after enactment of RERA, till
formation and establishment of regular Real Estate Appellate Tribunal
as contemplated under Section 43(1) of RERA.
92. As already noted herein above, the RERA was inter alia enacted
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as the Real Estate and Housing Sector was largely unregulated and the
consequence was that consumers were unable to procure complete
information for enforced accountability towards builders and developers
in the absence of an effective mechanism in place. It is also noted in the
objects and reasons of RERA that though, the Consumer Protection Act,
1986 was available to cater the demand of homebuyers in the real
estate sector but the experience shows that such mechanism was
inadequate to address the needs of the home buyers and promoters in
the real estate sector. The need for RERA was badly felt for establishing
an oversight mechanism to enforce accountability in the real estate
sector and providing an adjudicating machinery for speedy dispute
redressal mechanism and safeguarding the investments made by the
homebuyers through legislation to the extent permissible under the law.
The Statement of Objects and Reasons of RERA indicates that the primal
position of the Regulatory Authority is to regulate the real estate sector
having jurisdiction to ensure compliance with the obligation cast upon
the promoters, the allottees and the real estate agents. The RERA
provided for the establishment of the Real Estate Regulatory Authority
for regulation and promotion of real estate sector and to ensure sale of
plot, apartment or building, as the case may be, in an efficient and
transparent manner and to protect the interest of consumers in real
estate sector and establish the Real Estate Appellate Tribunal to hear
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appeals from the decisions, directions or orders of the Authority. RERA
was enacted with an object to ensure greater accountability towards
consumers, to significantly reduce frauds and delays and also the high
transaction costs, and to balance the interests of consumers and
promoters by imposing certain responsibilities on both, and to bring
transparency of the contractual conditions, set minimum standards of
accountability and a fast-track dispute resolution mechanism, to impose
liability upon the promoter to pay such compensation to the allottees, in
the manner as provided, in case if the promoter fails to discharge any
obligations imposed on him.
93. The said first proviso to Sub-Section (4) of Section 43 is required
to be interpreted, having regard to the legislative intent of RERA. It is
settled legal position that the a construction which leads to manifest
absurdity must not be preferred to and construction which will fulfill
the object and purpose of the legislative intent. The legislative intent for
enacting RERA is very clear that immediately after enactment of RERA
and after Section 43 has come into effect what is contemplated is that
the appropriate Government designates any Appellate Tribunal
functioning under any law for the time being inforce to be an Appellate
Tribunal to hear appeals under RERA. Thus, what is contemplated is
immediately making available as protem arrangement an appellate
forum to the allottee or even to the promoter to enforce accountability
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and for providing an adjudicating machinery for speedy dispute
redressal mechanism till formation and establishment of regular Real
Estate Appellate Tribunal. Thus, the arrangement contemplated under
said first proviso is a protem arrangement by which the State
Government is empowered to designate any Appellate Tribunal
functioning under any law for the time being inforce to be the Appellate
Tribunal to hear appeals under RERA. Thus, it is clear that such
designated Appellate Tribunal is therefore to function only till formation
and establishment of Real Estate Appellate Tribunal and is a functioning
Appellate Tribunal under any other law for the time being in force.
Thus, the legislative intent is to immediately make available functioning
Appellate Tribunal to all the stakeholders of Real Estate Sector.
94. It is also required to be noted that the composition of Real Estate
Appellate Tribunal as per Sections 45 and 46 of RERA inter alia includes
Chairperson who is or has been a Judge of a High Court. The State
Government by exercising powers conferred by the first proviso to Sub-
Section (4) of Section 43 of RERA designated the Maharashtra Revenue
Tribunal at Brihanmumbai constituted and functioning under the
Maharashtra Land Revenue Code to be the Appellate Tribunal to hear
appeals under RERA until the establishment of Maharashtra Real Estate
Appellate Tribunal under Sub-Section (1) of Section 43 of RERA. It
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appears that the Government of Maharashtra even while designating
any Appellate Tribunal functioning under any law for the time being
inforce to be the Appellate Tribunal to hear appeals under RERA took
into consideration the aspect that the President of Maharashtra Revenue
Tribunal, Mumbai is a retired High Court Judge.
95. The reliance is placed by the Appellants on the Judgment of
Larsen and Toubro Ltd. (supra) and also on the Judgment of Man
Global Ltd. (supra). The issue in both these decisions was whether a
sole Member of the Maharashtra Real Estate Appellate Tribunal i.e.
regular and permanent Appellate Tribunal constituted by the
Appropriate Government by exercising power under sub-section (1) of
Section 43 of RERA can decide any appeal or application filed in any
appeal. In both these decisions by relying on Section 43(3) of RERA it
has been held that a Sole Member of the Maharashtra Real Estate
Appellate Tribunal has no jurisdiction to dispose of appeal or any
application. As already discussed herein above, Sub-Section (3) of
Section 43 of RERA provides that every bench of the Appellate Tribunal
shall consist of at least one Judicial Member and one Administrative or
Technical Member. However, the said provision is concerning the
regular Maharashtra Real Estate Appellate Tribunal as constituted and
established under Sub-Section (1) of Section 43 of RERA and nothing to
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do with the designated Appellate Tribunal to be designated by the
Appropriate Government by exercising power under first proviso to sub-
section (4) of Section 43. i.e. Maharashtra Revenue Tribunal designated
to act as Real Estate Appellate Tribunal till formation of permanent Real
Estate Appellate Tribunal. Thus, reliance on these decisions is totally
misconceived.
96. The contention raised by relying on the decision of the Supreme
Court in DDA v. Joint Action Committee (supra) that a delegattee of
power cannot act contrary to the provisions of statutes and must act
within the four corners of the delegation is totally misconceived. The
Section 43 empowers appropriate Government to establish regular and
permanent Real Estate Appellate Tribunal as also to designate any
Appellate Tribunal functioning as such under any law for the time being
in force as protem arrangement till establishing regular and permanent
Real Estate Appellate Tribunal. The appropriate Government is defined
in Section 2(g), as follows:
“2. Definitions.–In this Act, unless the context otherwise
requires,–
…
…
(g) “appropriate Government” means in respect of matters
relating to,–
(i) the Union territory without Legislature, the Central
Government;
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(ii) the Union territory of [Puducherry and Union territory
of Jammu and Kashmir], the Union territory Government;
(iii) the Union territory of Delhi, the Central Ministry of
Urban Development;
(iv) the State, the State Government.”
(Emphasis Supplied)
97. Thus, in the context of the present case the Government of
Maharashtra is the appropriate Government which has been empowered
to establish Maharashtra Real Estate Appellate Tribunal and till
establishment of the same as a protem arrangement designating any
Appellate Tribunal functioning under any law for the time being inforce
to be the Appellate Tribunal to hear appeals under RERA. As already
discussed herein above the Government of Maharashtra by exercise of
power under first proviso of Sub-Section (4) of Section 43 has
designated Maharashtra Revenue Tribunal constituted under the
Maharashtra Land Revenue Code, 1966 and functioning as such, to be
the Appellate Tribunal to hear appeals under RERA till formation of
Maharashtra Real Estate Appellate Tribunal. Thus, there is no substance
in the contention raised by the learned Counsels appearing for the
Appellants that the Government of Maharashtra has acted contrary to
the provisions of statutes.
98. The reliance of Appellants on Dr. Mahabal Ram (supra) is totally
misconceived as the question involved in the said case was whether a
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single member of the Central Administrative Tribunal set up under the
Administrative Tribunals Act, 1985, has jurisdiction to dispose of
matters coming before the Tribunal under the said act. Thus, the said
question is totally different and therefore, it is not relevant to the
present case. In any case, as discussed herein above in the present case
the issue is concerning Designated Appellate Tribunal i.e. temporary
Appellate Tribunal constituted under the first proviso to Sub- Section
(4) of Section 43, which provides that until the establishment of an
Appellate Tribunal under Section 43(1), the appropriate Government
shall designate, by order, any Appellate Tribunal functioning under any
law for the time being in force, to be the Appellate Tribunal to hear
appeals under RERA. Thus the said judgment is not applicable.
99. Thus, for the above reasons there is no substance in the Second,
Third and Fourth Substantial Questions of Law.
100. Hereinafter the substantial questions of law Nos.1 and 2 as
framed by Order dated 12th December 2024 will be considered. The said
substantial questions of law are renumbered as substantial questions of
law nos. 5 and 6. The said substantial questions of law are as follows:
FIFTH SUBSTANTIAL QUESTION OF LAW:
When the Agreement for Sale between the Promoter and
the Allottee makes provision for force majeure events,
which have the effect of postponing the agreed date of144
SA 251.2022.doc 29.12possession, can authorities under RERA fix / provide for a
date of possession while adjudicating claims under Section
18 of RERA?
SIXTH SUBSTANTIAL QUESTION OF LAW:
Whether the authorities under RERA have the power to
determine or rewrite or revise the date of handover of
possession, in exercise of power under Section 18 of RERA?
101. The impugned order of the learned Appellate Tribunal
directs the Appellants to pay interest to the allottees at the rate of
10.05% effective from 1st February 2014 till handing over actual
possession. As there is a force majeure clause in the agreement
executed between the promoter and the allottees, it is the contention
of the Appellants that as a result of the force majeure clause,
effectively the agreed date of possession has been postponed and as
by the impugned order the agreed dated of possession has been fixed
by the learned Appellate Tribunal while adjudicating the claim under
Section 18 of RERA, in effect the agreement or contract has been re-
written by the learned Maharashtra Revenue Tribunal i.e. the
designated Appellate Tribunal.
102. In view of the said contentions raised, this Court has
framed the above substantial questions of law.
SUBMISSIONS OF THE APPELLANTS CONCERNING THE FIFTH
AND SIXTH SUBSTANTIAL OF LAW:
103. The learned Counsel appearing for the Appellants have
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raised the following contentions:
i. Reliance is placed on Section 18 of RERA and it is
submitted that a bare reading of Section 18(1)
demonstrates that the terms of the Agreement for Sale,
inter alia, in respect of the date for handover of possession
would be required to be taken into consideration while
adjudicating any liability under Section 18(1) of RERA. The
terms of the Agreement for Sale would axiomatically
include any attendant provisions which stipulate an
extension/exclusion of time for compliance of obligations
thereunder. It is submitted that any adjudication under
Section 18(1) dehors the terms of the Agreement for Sale
or by ignoring the terms thereof or contrary thereto would
be perverse and unsustainable in law. The failure or
inability to give possession of a unit in accordance with the
terms of the Agreement for Sale or duly completed by the
date specified in the agreement for sale is the sine qua non
for any liability to fasten on the Promoter.
ii. In the present case, the date specified in the
Agreement for Sale executed by the Appellant and the
Respondent (Clause 14@ Pg. 20 of the Compilation of
Lower Court Proceedings) is 31st December 2009, subject to
146
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any of the contingencies specified in the same clause. Thus,
while adjudicating liability under Section 18(1), the
Maharashtra Real Estate Appellate Tribunal was required to
consider the said Clause 14 and its effect. However, as is
evident from the impugned Order, the Appellate Tribunal
has failed to consider the same. Thus, the impugned Order
is contrary to the very foundational premise of Section
18(1) of RERA.
iii. It is submitted that this Court in its judgment in Sanvo
Resorts Private Limited & Ors. vs. Shital Nilesh Deshmukh 27
and more particularly paragraph No.18 and 19 has inter
alia, held that the promoter is entitled to justify delay in
completion of construction on the basis of the terms of the
agreement for sale, while defending claims under Section
18(1) of RERA.
iv. It is submitted that in case the promoter fails to
complete the project despite genuine efforts, the concerned
authorities would look into genuine cases and mould reliefs
while determining liability under Section 18 of RERA.
Thus, the element of adjudication is inherent under Section
18 of RERA. To substantiate the said contention, reliance is
27 Second Appeal No.512 of 2022147
SA 251.2022.doc 29.12placed on the decision of this Court in the case of Nilkamal
Realtors Suburban Pvt. Ltd. & Anr. vs. Union of India &
Ors.28 and more particularly on paragraph No.137 of the
same.
v. It is submitted that as per the settled legal position,
the Court must enforce contracts between the parties as
entered into by such parties and cannot rewrite the
contracts. It is a Court’s duty to give effect to the terms of
the bargain struck between the parties.
vi. It is submitted that the terms of the Agreement for
Sale executed by the allottee and the promoter are binding
on the parties and ought to be enforced by
Courts/authorities. The Respondent is relying upon the
same Agreement for Sale wherein the Clauses for extension
of timelines has been mutually inserted for alleging delay
in possession. It is not in dispute that the Respondent has
acted in furtherance of the Agreement for Sale. It is not
even in dispute that the Respondent has ever challenged or
terminated the Clause 14 of the Agreement for Sale. That
being the case, the Respondent is bound by the Clauses on
extension in the possession date mutually agreed to be
inserted in the Agreement for Sale. The Agreement for Sale
28 2017 SCC OnLine Bom 9302
148
SA 251.2022.doc 29.12
has to be given effect and interpreted as was entered into
between the parties and in entirety. Neither party can pick
and choose what clause of the Agreement for Sale is
binding upon him and what is not. Further, it is settled law
that Courts must also enforce Agreements as envisaged
between the Parties, and cannot come up with different
bargains for either party than what the parties themselves
have contracted to in writing.
vii. To substantitate the above contentions, reliance is
placed on the following decisions of the Supreme Court:
1. Venkataraman Krishnamurthy v. Lodha Crow
Buildmart Pvt. Ltd.29
2. Central Bank of India v. Hartford Fire Insurance
Co. Ltd.30
4. Neelkamal Realtors Suburban Pvt. Ltd. vs. Union
of India32
5. Bharathi Knitting Company v. DHL Worldwide
Express Courier Division of Airfreight Ltd.33viii. It is submitted that while enforcing provisions of RERA
and determining liability thereunder, the authorities under
29 2024 INSC 132
30 AIR 1965 SC 1288
31 2024 INSC 1044
32 2017 SCC OnLine Bom 9302
33 (1996) 4 SCC 704
149
SA 251.2022.doc 29.12
RERA ought not to curtail the freedom of contract between
the parties and contracts which have been entered into
freely and voluntarily shall be enforced. In this regard,
reliance is placed on the judgment of the Supreme Court in
the case of Zoroastrian Co-operative Housing Society Ltd v.
District Registrar, Co-operative Society (Urban) 34 and more
particularly paragraphs nos. 27 to 30 of the same.
ix. The term “on demand” in the context of the right of an
Allottee to refund of amounts paid is found in the main
enacting portion of Section 18(1) of RERA and the said
term does not find place in the proviso to Section 18(1) of
RERA. Accordingly, the Allottee’s right under the proviso to
Section 18(1) cannot be treated as unqualified. The
absence of the words “on demand must be given due
consideration in the course of interpretation.
x. It is well settled that the function of a proviso is
generally to create an exception to what is stated in the
main enactment and further that, while interpreting a
proviso, care must be taken that it is used to remove/carve
out special cases from the general enactment and provide
for them separately. In this regard, reliance is placed on the
judgment of the Supreme Court in Shah Bhojraj Kovarji Oil
34 2005) 5 SCC 632
150
SA 251.2022.doc 29.12
Mills and Ginning Factory v. Subhashchandra Yograj Sinha 35
and in particular, paragraphs 9 and 10 thereof and also the
judgment of the Hon’ble Supreme Court in Sundaram Pillai
(supra) and more particularly paragraphs nos. 32 and 33 of
the same.
xi. The Supreme Court in Newtech (supra) was
considering the import of the principal enactment in
Section 18(1), which relates to the Allottee’s right of refund
of money and not the proviso to Section 18(1), which
relates to the right of an allottee to continue in the project
and seek interest. Paragraph 24 of the said judgment
clearly refers to unforeseen events or stay orders of Court /
Tribunal, as being factors which are to be disregarded while
considering a claim for refund under Section 18(1). This is
because when a party has already made up its mind to seek
an exit from the Project, such party cannot be compelled to
stay put in the Project, thereby making his right to refund
an unconditional/unqualified right. In the present case, the
delays have been occasioned on account of foreseen events,
which have been set out in the Agreement for Sale
executed between the Allottee and the Promoter and which
ought to be taken into account while determining any
35 AIR 1961 SC 1596
151
SA 251.2022.doc 29.12
liability under the proviso to Section 18(1) of RERA. It may
also be noted that none of the Respondents in any of the
Appeals are desirous of a refund. They were admittedly
already offered refunds with interest vide letters addressed
by the Appellant much before they even filed any case
under RERA.
xii. It is is well settled that a judgment is an authority for
what is decided by and not anything further. It is also well
settled that a little difference in facts or additional facts
may make a lot of difference in the precedential value of a
decision. Attention of this Hon’ble Court is invited to the
judgment of the Hon’ble Supreme Court in the case of
Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. 36, and
in particular, paragraph 59 thereof. It is also well settled
that the judgments of the Court ought not to be read as
provisions of a statute and that the observations therein
must be read in the context in which they appear. The
reliance is placed on the decision of the Supreme Court in
the case of Haryana Financial Corporation vs. Jagdamba Oil
Mills 37 (paragraph 19).
xiii. It ought to be noted that what was being decided by
36 (2003) 2 SCC 111
37 (2002) 3 SCC 496
152
SA 251.2022.doc 29.12
the Hon’ble Supreme Court of India in Imperia Structures
Limited v/s Anil Patni 38, more particularly Paragraphs 32
and 34 therein and in Newtech (supra) was not whether or
not the right of an allottee under Section 18 was
unconditional or not. In fact, none of the five questions
framed in Newtech (supra) deal with the aforesaid issue. It
is held by the Hon’ble Supreme Court in the case of Arun
Kumar Aggarwal v. State of M.P. 39, Para 34 therein, that a
mere obiter of a Court does not have precedential value.
xiv. It has also been held by the Division bench of this
Court in the case of Neelkamal (supra) that: (i) That the
authority in genuine cases after considering the mitigating
events encountered by the promoter has the power to
mould reliefs; and (ii) That the advent of RERA does not
rewrite or displace contractual understandings as regards
possession entered into by parties prior to the promulgation
of RERA. Therefore, even the Division Bench of this Court
has laid emphasis on adjudication based on consideration
of mitigating events that come under contractual clauses of
Agreements entered into between the parties.
xv. It is important to note that Clause 2.3 of the model form
38 (2020) 10 SCC 78
39 (2014) 13 SCC 707
153
SA 251.2022.doc 29.12
of agreement for sale, notified under the MahaRERA Rules,
2017 itself provides that possession dates can be subject to
extension based on clauses providing extension in an
agreement for sale, thereby confirming that even the RERA
envisages situations where the developer can be allowed
extension on account of reasons outside it’s control. In the
aforesaid circumstances, it is submitted that firstly,
authorities under RERA do not have the power to fix or
provide for a fresh date of possession / revise or rewrite the
date of possession under Section 18 of RERA. However, the
authorities under RERA are bound, by law, to adjudicate
and determine the date of possession in the context of
exclusion / extensions envisaged in the Contract as well as
those arising out of force majeure events, contractual or
legal, especially those well within the allottee’s knowledge,
while adjudicating liability under Section 18 of RERA.
SUBMISSIONS OF THE RESPONDENTS CONCERNING THE FIFTH
AND SIXTH SUBSTANTIAL OF LAW:
104. The learned Counsel appearing for the Respondents
submitted as follows:
i. The Neelkamal (supra) clearly acknowledges the
extension of time to be given to the promoter. Therefore, if
154
SA 251.2022.doc 29.12the promoter can seek extension of time for the completion
of project, which includes the date of possession and the
authorities grants such extension then there cannot be any
hindrance to the authorities either to fix the date of
completion of project including handing over of the
possession to the allottees. It is also settled that the delay
and/or extension cannot be for indefinite period. In such
case the MahaREAT under Section 53 of RERA is competent
to grant/fix the date of completion of the project which
includes the date of possession. The Supreme Court has
decided that there has to be a reasonable time frame for
handing over of the possession. The possession should be
given in three years, irrespective of the fact that whatever
the agreement says. Therefore, the question of law calling
upon and referring to the agreement saying that force
majeure clause can keep extending the time limit for the
purpose of giving possession for unlimited period is not
maintainable at all.
ii. It is the settled position of law that RERA is retroactive
act and it is applicable to the ongoing projects where the
Occupation Certificate has not been granted, the RERA
shall be applicable and the act requires the registration of
155
SA 251.2022.doc 29.12project. Accordingly, the subject project has been registered
also. After registration of the project, the promoter can only
be absolved from the criminal liability on the extension of
the date of possession, but the same cannot absolve the
promoter from civil liability, which includes unconditional
and unqualified interest on delayed possession.
iii. It is submitted that adjudication of claim under section
18, either for the compensation or interest on delayed
possession has to be from the date of the agreement
actually entered into between the promoter and the flat
purchaser and default is to be considered from the agreed
date of possession The RERA being retroactive act when
applies to the ongoing project, where the possession has
not been given, in such case, once the project is registered,
the possession date/ date of completion of the project is to
be given by the promoter. In that case, if any default occurs
on the part of the promoter, the authorities while
adjudicating the claim under section 18 has to refer to the
date of possession. The section 6 of RERA grants extension
of registration of the project thereby the possession date
also gets extended. The section 6 of the RERA does not give
automatic extension of the project completion rather there
156
SA 251.2022.doc 29.12is hearing to take place for the extension of project
including the date/time line for giving possession.
Therefore, there is no hindrance in fixing the date of
possession by the Authorities while adjudicating the claim
under section 18 of RERA.
iv. It is further submitted that, in the matter of Pioneer
urban land and infrastructure Ltd v. union of India 40, the
Supreme Court has stated that the allottee of the flats are
financial creditors and the money advanced by the allottee
to real estate promoter is to be considered as a financial
debt. The para 23 of the aforesaid judgment clearly
observes that RERA being retroactive act, the registration of
the project is only granted by the authority when it is
satisfied that the promoter is a bona fide promoter who is
likely to perform his part of the bargain satisfactory.
Registration of project ensures only for a certain period and
can only be extended due to force majeure or events for a
maximum period of one year by the authority on being
satisfied that such events have in fact taken place, which
clearly shows that the authority can extend the period of
the project that includes possession. In the present case,
after ascertainment of the fact of the Force Majeure clause
40 (2019) 8 SCC 416
157
SA 251.2022.doc 29.12
claimed by the promoter the MahaREAT was kind enough
to extend the date of completion of project which includes
the date possession after considering their force majeure
claims. Therefore, interest on delayed possession was
awarded from 1 February 2014 and accordingly the learned
MahaREAT ordered the timeline for the completion of the
construction only on the inquiry from the learned Counsel,
when the learned Counsel informed the percentage of
construction completed on that date. In that case it may be
fairly concluded that the question of law as framed no. 1 &
2 hereinabove may be fairly deemed as redundant and
infructuous.
v. In the matter of Neelkamal (supra), the para 128 of
the aforesaid judgment clearly suggest that the delay in
handing over the possession would be counted from the
date, mentioned in the agreement for sale, entered into by
the promoter and the flat purchasers. Which further
suggest that while adjudicating claim under section 18, the
delay while handing over the possession and interest for
the same shall be counted from the date of agreed date of
possession mentioned in the agreement. Under the
provision of RERA, the promoter is given a facility to revise
158
SA 251.2022.doc 29.12
the date of the completion of project and declare the same.
The extension for the completion of project or date of
possession, facility is already given to the promoter under
RERA. If the promoter has been granted liberty to revise
the date of completion of project that does not mean that
RERA contemplates to rewrite the contract between the flat
purchasers and promoter. The RERA gives opportunity to
the promoter to extend the date of the completion of
project and revise the date of the possession date. Hence,
the same may be also exercised validly by the authorities
under the law.
vi. In the matter of Pioneer Urban Land Infrastructure
Limited v. Govinda Raghawan 41 the respondents rely upon
paragraph nos 6 to 6.8 and paragraph no.7, which clearly
shows the importance of the delay in possession of the flat
and thereafter it has further discussed in para no.6.1 that a
person cannot be made to wait indefinitely for the
possession of the flat allotted to him. It has been further
recorded in paragraph no.6.3 of the aforesaid judgment
that if the promoters are writing, only one-sided
agreement, then the same cannot be relied upon and
cannot be enforced. Therefore, the agreement cannot be
41 (2019) 5 SCC 725
159
SA 251.2022.doc 29.12
one-sided, which can be required to be enforced under any
law for the time being in force. The para 6.4 and 6.5 of the
judgment discusses purposely that how the one-sided
agreement has been made in the subject case, and Supreme
Court has taken a view that one sided agreement cannot
prevail upon. Supreme Court was pleased to further specify
about the Constitutional guarantees to all person, promises
equality before the law and equal protection of laws. The
same principle applies to the equality of bargaining power
irrespective of economic strength of the contracting parties.
It will also apply to a situation in which weaker party is in a
position to obtain goods, services or means legally, upon
the terms imposed by the stronger party. So, in the given
circumstances, the one-sided agreement or dominating
agreement cannot be accepted, cannot be relied upon by
the court of law.
vii. The learned MahaREAT in first Appeal no. 52949 of
2021, in the matter of Vinay Agrawal v. Amrita Chakraborty
which has persuasive value has discussed in detail about
the multiple issues on the basis of the various judgments of
Hon’ble Supreme Court and this Court, which are vital to
be mentioned here under. The para 14 of the judgment says
160
SA 251.2022.doc 29.12
that respondents have absolute right to claim interest as
prescribed under section 18 of the act for delaying delivery
of possession of the subject flat. The para of 16 the
aforesaid judgment states that the extension of registration
granted by MahaRERA in the light of para No. 119, 256 of
the judgment of this Court in the case of Neelkamal (supra)
clarify and does not contemplate rewriting of contract
between the purchaser and the promoter. Para 256 of the
judgment further clarify that by giving opportunity to the
promoter to prescribe fresh timeline under section 4(2)(1)
(c) can not absolve of the liability under agreement for
sale. Para 17, further mentions about the delivery date on
MahaRERA website, which is revised without consent of the
allottee. Therefore, revised project registration/ completion
date mentioned on the website cannot be accepted as
agreed date of delivery of possession as per Section 18 of
the act. It further concludes that, party cannot take
advantage of its own wrong. Para 19 of the aforesaid
judgment further clarify about the applicability of Act.
viii. The direction was passed by the Hon’ble MahaREAT
for completing the construction within the stipulated
period, on the basis of the fact that Respondent’s (appellant
161
SA 251.2022.doc 29.12
herein) buildings were ready and constructed upto 80%
and 90% in year 2018. Because in the same layout when
the booking was taken in the year 2006-2007, plan was to
construct 490 flats only but now the plan is to construct
1003 flats in the same layout. Therefore, the entire
objective of the appellant is to remove the flat
purchasers/respondents from the aforesaid project at any
cost by creating the adverse circumstances.
ix. It is respectfully submitted that both questions stand
concluded in favour of the Respondents. The settled legal
position, as affirmed in Imperia Structures Ltd. v. Anil
Patni42, categorically holds that the promoter cannot
indefinitely postpone possession by relying upon force
majeure clauses or contractual stipulations. The Supreme
Court therein recognised that allottees are entitled to seek
relief under Section 18 of the RERA, notwithstanding any
contrary clauses in the agreement.
x. In Pioneer Urban Land & Infrastructure Ltd. v.
Govinda Raghavan43, the Apex Court reiterated that flat
purchasers cannot be compelled to wait endlessly for
possession, and that one-sided clauses enabling promoters
42 (2020) 10 SCC 783
43 (2019) 5 SCC 725
162
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to unilaterally delay handover are unconscionable, opposed
to public policy, and unenforceable.
xi. This Court in Neelkamal (supra), upheld the
constitutionality of RERA and clarified in para 128 and
para 256 that the revised project timelines declared under
Section 4 cannot dilute the promoter’s liability under the
agreement for sale. These pronouncements, read conjointly,
establish beyond cavil that the authorities under RERA
possess the jurisdiction and indeed the obligation to fix a
reasonable date of possession while adjudicating claims
under Section 18, and that the promoter cannot evade civil
liability by resorting to contractual clauses or extensions.
REASONING CONCERNING FIFTH AND SIXTH SUBSTANTIAL
QUESTIONS OF LAW:
105. For considering Substantial Question of Law Nos.5 and 6, it
is necessary to analyse Section 18 of RERA. The said Section is
reproduced herein below for ready reference:
“18. Return of amount and compensation.–(1) If the
promoter fails to complete or is unable to give possession of
an apartment, plot or building,–
(a) in accordance with the terms of the agreement for sale
or, as the case may be, duly completed by the date specified
therein; or
(b) due to discontinuance of his business as a developer on
account of suspension or revocation of the registration163
SA 251.2022.doc 29.12under this Act or for any other reason, he shall be liable on
demand to the allottees, in case the allottee wishes to
withdraw from the project, without prejudice to any other
remedy available, to return the amount received by him in
respect of that apartment, plot, building, as the case may
be, with interest at such rate as may be prescribed in this
behalf including compensation in the manner as provided
under this Act:
Provided that where an allottee does not intend to withdraw
from the project, he shall be paid, by the promoter, interest
for every month of delay, till the handing over of the
possession, at such rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of
any loss caused to him due to defective title of the land, on
which the project is being developed or has been developed,
in the manner as provided under this Act, and the claim for
compensation under this subsection shall not be barred by
limitation provided under any law for the time being in force.
(3) If the promoter fails to discharge any other obligations
imposed on him under this Act or the rules or regulations
made thereunder or in accordance with the terms and
conditions of the agreement for sale, he shall be liable to pay
such compensation to the allottees, in the manner as provided
under this Act.”
(Emphasis added)
106. As far as the scheme under Section 18 of RERA is
concerned, the same is discussed in paragraph Nos. 19 to 25 of the
Newtech Promoters (supra). The said paragraphs are set out herein
below :
“19. Section 18(1) of the Act spells out the consequences if
the promoter fails to complete or is unable to give possession
of an apartment, plot or building either in terms of the
agreement for sale or to complete the project by the date
specified therein or on account of discontinuance of his
business as a developer either on account of suspension or164
SA 251.2022.doc 29.12revocation of the registration under the Act or for any other
reason, the allottee/homebuyer holds an unqualified right to
seek refund of the amount with interest at such rate as may
be prescribed in this behalf.
20. Section 18(2) of the Act mandates that in case, loss is
caused to allottee due to defective title of the land, on which
the project is being developed or has been developed, the
promoter shall compensate the allottee and such claim for
compensation under Section 18(2) shall not be barred by
limitation provided under any law for the time being in
force.
21. Section 18(3) of the Act states that where the promoter
fails to discharge any other obligation under the Act or the
rules or regulations framed thereunder or in accordance with
the terms and conditions of the agreement for sale, the
promoter shall be liable to pay “such compensation” to the
allottees, in the manner as prescribed under the Act.
22. If we take a conjoint reading of sub-sections (1), (2)
and (3) of Section 18 of the Act, the different contingencies
spelt out therein, (a) the allottee can either seek refund of
the amount by withdrawing from the project; (b) such
refund could be made together with interest as may be
prescribed; (c) in addition, can also claim compensation
payable under Sections 18(2) and 18(3) of the Act; (d) the
allottee has the liberty, if he does not intend to withdraw
from the project, will be required to be paid interest by the
promoter for every months’ delay in handing over possession
at such rates as may be prescribed.
23. Correspondingly, Section 19 of the Act spells out “Rights
and duties of allottees”. Section 19(3) makes the allottee
entitled to claim possession of the apartment, plot or
building, as the case may be. Section 19(4) provides that if
the promoter fails to comply or being unable to give
possession of the apartment, plot or building in terms of the
agreement, it makes the allottees entitled to claim the refund165
SA 251.2022.doc 29.12of amount paid along with interest and compensation in the
manner prescribed under the Act.
24. Section 19(4) is almost a mirror provision to Section
18(1) of the Act. Both these provisions recognise right of an
allottee two distinct remedies viz. refund of the amount
together with interest or interest for delayed handing over of
possession and compensation.
25. The unqualified right of the allottee to seek refund
referred under Section 18(1)(a) and Section 19(4) of the Act
is not dependent on any contingencies or stipulations
thereof. It appears that the legislature has consciously
provided this right of refund on demand as an unconditional
absolute right to the allottee, if the promoter fails to give
possession of the apartment, plot or building within the time
stipulated under the terms of the agreement regardless of
unforeseen events or stay orders of the court/tribunal, which
is in either way not attributable to the allottee/homebuyer,
the promoter is under an obligation to refund the amount on
demand with interest at the rate prescribed by the State
Government including compensation in the manner provided
under the Act with the proviso that if the allottee does not
wish to withdraw from the project, he shall be entitled for
interest for the period of delay till handing over possession at
the rate prescribed.”
107. Thus the Supreme Court has held that a conjoint reading of sub-
sections (1), (2) and (3) of Section 18 of the RERA shows that inter alia
different contingencies are spelt out therein including following :
i. The allottee can either seek refund of the amount by withdrawing
from the project and in that case such a refund could be made
together with interest as may be prescribed and in addition, can
also claim compensation.
166
SA 251.2022.doc 29.12
ii. The allottee is at liberty, to continue in the project, if he does not
intend to withdraw from the project and in that case the allottee
will be required to be paid interest by the promoter for every
months’ delay in handing over possession at such rates as may be
prescribed.
108. In the matter between Vinay Shravankumar Agrawal v.
Bhushan Kashinath Pawaskar44 along with connected Second Appeals
this Court has considered the scope of Section 18. The discussion in
the said decision is relevant and the same is as under.
109. The object and reasons of the said Act and the peculiar position of
allottees as explained by the Supreme Court to the effect that the buyer
borrows money to pay for a house and simultaneously plays the role of
a financer as building projects collect money upfront and this puts the
buyer in a very vulnerable position i.e. the weakest stakeholder with a
high financial exposure clearly shows that the legislative intent to use
“shall ” in Section 18 of the said Act is to make the same mandatory.
110. While interpreting Section 18 of the RERA, in Imperia Structures
Limited Vs. Anil Patni & Anr.45, the Supreme Court has held that Section
18 is unqualified right of allottee to get refund and interest at the
prescribed rate, by withdrawing from the project, if the promoter fails
44 Decision dated 24th October 2024 in Second Appeal (Stamp) No.9171 of 2023
45 (2020) 10 SCC 783
167
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to give possession of an apartment as per dates specified in the home
buyers agreement and also entitled for compensation. It is further held
that in case home buyers does not intend to withdraw from the project
then he is entitled to and must be paid interest for every month’s delay
till the handing over of the possession. It is the absolute right of the
allottee either to continue in the project or to withdraw from the
project. The relevant discussion in the case of Imperia (supra) is in
paragraph 25, which reads as under:
“25. In terms of Section 18 of the RERA Act, if a promoter
fails to complete or is unable to give possession of an
apartment duly completed by the date specified in the
agreement, the promoter would be liable, on demand, to
return the amount received by him in respect of that
apartment if the allottee wishes to withdraw from the Project.
Such right of an allottee is specifically made “without
prejudice to any other remedy available to him”. The right so
given to the allottee is unqualified and if availed, the money
deposited by the allottee has to be refunded with interest at
such rate as may be prescribed. The proviso to Section 18(1)
contemplates a situation where the allottee does not intend to
withdraw from the Project. In that case he is entitled to and
must be paid interest for every month of delay till the handing
over of the possession. It is up to the allottee to proceed either
under Section 18(1) or under proviso to Section 18(1). The
case of Himanshu Giri came under the latter category. The
RERA Act thus definitely provides a remedy to an allottee who
wishes to withdraw from the Project or claim return on his
investment.”
(Emphasis added)
Thus it is specifically held by the Supreme Court that the proviso
168
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to Section 18(1) contemplates the situation where the allottee does not
intend to withdraw from the project, however, there is delay in handing
over possession of the apartment. In that case, he is entitled to and
must be paid interest for every month’s delay till handing over the
possession and it is the entire discretion of the allottee either to
withdraw from the project and seek refund, interest and compensation
or to continue with the project and seek interest for every month’s delay
in handing over possession.
111. The scheme of RERA as well as the object and reasons of the
RERA, the scope of the relevant provisions and the decisions in Imperia
(supra) and Newtech (supra) makes it very clear that an allottee has an
unqualified right to either withdraw from the project and to seek
refund, interest and compensation and if the allottee does not intend to
withdraw from the project, in spite of delay, then the allottee has been
given unqualified right to get interest per month for delayed possession
till receipt of possession. It is clear that the same is an unqualified right
of allottee and there is no conditions attached for exercise of said right.
112. In Newtech Promoters (supra), the said para No.25 in the case of
Imperia (supra) is quoted with approval in paragraph No.78. The
relevant discussion is to be found in paragraph Nos.77 to 80 in Newtech
Promoters (supra) which reads as under :
169
SA 251.2022.doc 29.12
“77. The further submission made by the learned counsel for
the appellants is that the return of the amount adversely
impacts the promotor and such a question can be looked into
by the adjudicating officer in the better prospective. The
submission has no foundation for the reason that the
legislative intention and mandate is clear that Section 18(1)
is an indefeasible right of the allottee to get a return of the
amount on demand if the promotor is unable to hand over
possession in terms of the agreement for sale or failed to
complete the project by the date specified and the
justification which the promoter wants to tender as his
defence as to why the withdrawal of the amount under the
scheme of the Act may not be justified appears to be
insignificant and the Regulatory Authority with summary
nature of scrutiny of undisputed facts may determine the
refund of the amount which the allottee has deposited, while
seeking withdrawal from the project, with interest, that too
has been prescribed under the Act, as in the instant case, the
State of Uttar Pradesh has prescribed MCLR + 1% leaving no
discretion to the Authority and can also claim compensation
as per the procedure prescribed under Section 71(3) read
with Section 72 of the Act.
78. This Court while interpreting Section 18 of the Act, in
Imperia Structures Ltd. v. Anil Patni [Imperia Structures Ltd.
v. Anil Patni, held that Section 18 confers an unqualified
right upon an allottee to get refund of the amount deposited
with the promoter and interest at the prescribed rate, if the
promoter fails to complete or is unable to give possession of
an apartment as per the date specified in the home buyer’s
agreement in para 25 held as under :
“25. In terms of Section 18 of the RERA Act, if a
promoter fails to complete or is unable to give
possession of an apartment duly completed by the
date specified in the agreement, the promoter
would be liable, on demand, to return the amount
received by him in respect of that apartment if the
allottee wishes to withdraw from the Project. Such170
SA 251.2022.doc 29.12right of an allottee is specifically made “without
prejudice to any other remedy available to him”.
The right so given to the allottee is unqualified and
if availed, the money deposited by the allottee has
to be refunded with interest at such rate as may be
prescribed. The proviso to Section 18(1)
contemplates a situation where the allottee does
not intend to withdraw from the Project. In that
case he is entitled to and must be paid interest for
every month of delay till the handing over of the
possession. It is up to the allottee to proceed either
under Section 18(1) or under proviso to Section
18(1). The case of Himanshu Giri came under the
latter category. The RERA Act thus definitely
provides a remedy to an allottee who wishes to
withdraw from the Project or claim return on his
investment.”
79. To safeguard the interests of the parties, on being
decided by the Regulatory Authority/adjudicating officer, it is
always subject to appeal before the Tribunal under Section
43(5) provided condition of pre-deposit being complied with
can be further challenged in appeal before the High Court
under Section 58 of the Act and, thus, the legislature has put
reasonable restriction and safeguards at all stages.
80. The further submission made by the learned counsel for
the appellants that if the allottee has defaulted the terms of
the agreement and still refund is claimed which can be
possible, to be determined by the adjudicating officer. The
submission appears to be attractive but is not supported with
legislative intent for the reason that if the allottee has made
a default either in making instalments or made any breach of
the agreement, the promoter has a right to cancel the
allotment in terms of Section 11(5) of the Act and proviso to
sub-section (5) of Section 11 enables the allottee to approach
the Regulatory Authority to question the termination or
cancellation of the agreement by the promotor and thus, the
171
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interest of the promoter is equally safeguarded.”
(Emphasis added)
113. In the light of above discussion about the relevant
provisions of RERA as interpreted by the Supreme Court, it is
necessary to consider the substantial questions of law.
114. As noted hereinabove, Section 18 of the RERA gives
unqualified statutory right to the allottees if there is delay in handing
over possession by the promoter and if the allottee does not intend to
withdraw from the project, he shall be paid every month’s interest for
delay in handing over possession as such rate as may be prescribed.
Thus, the statutory right has been created in favour of the allottees
i.e. flat purchasers.
115. As held in Imperia (supra) and Newtech (supra), right
given to the allottees by Section 18 is an unqualified right.
116. It is the main submission of learned Counsel appearing for
the Appellants that as in Clause No. 14 of the Agreement for Sale
executed between the Appellant and the Flat Purchasers in Second
Appeal No.260 of 2022, there is clause regarding force majeure, the
time for handing over possession stands automatically extended. For
considering the said submission, it is necessary to set out said Clause
No. 14 of Agreement of Sale, which reads as under :
172
SA 251.2022.doc 29.12
“14. On Receipt of full and final amount as payable
under this agreement by the Purchasers, the
DEVELOPERS shall give possession of the said premises
to the Purchaser/s on or before 31-12-2010. If the
Developers fails to handover the possession of the said
flat to the purchaser on the said date, the Developers
shall be liable to pay the interest @ 9% (Nine) p.a. to
the purchasers as provided under section 8 of MOF Act,
1963, until the possession of the said flat is handed over
to the purchasers. If the DEVELOPERS unable keep the
said premises ready for occupation on account of
reasons beyond its control and of its agents on aforesaid
date or the dates prescribed for the payment, the
amounts already received by it in respect of the said
premises. It is mutually agreed between the Purchaser &
Developers that if the Developer is unable to hand over
the possession of said flat on above mentioned
stipulated date for the reason beyond the control of
developers, then developers is not liable to pay any
interest as provided under the MOFA. The Developers
herein agree that they shall be liable on demand by the
Purchaser to refund to the Purchasers the amounts
already received by them in respect of the said premises.
Till the said amount is refunded by the Developers to the
Purchasers there shall be subject to prior encumbrances
if any, be charge on the said premises in question. It is
further agreed that upon refund of the said amount as
stated hereinabove, the Purchaser shall have no right,
title, interest, claim, demand or dispute of any nature
whatsoever either against the Developers or against the
said preemies in any manner whatsoever and the
developers shall be entitled to deal and dispose of the
said premises to any person or party as the Developers
may desire at their absolute discretion. Provided that the
DEVELOPERS shall be entitled to the reasonable
extension of time for keeping the said premises ready for
occupation on the aforesaid date if the completion of
buildings in which the said premises are to be situated is
173
SA 251.2022.doc 29.12
delayed on account of : –
a) Non-availability of steel, cement, other buildings
material, water or electricity supply
b) War, civil commotion, act of God;
c) Any notice, order, rule, notification of the
Government and/or other public or competent authority
court or tribunal any Quasi-judicial body or authority.
d) Delay in getting plans occupancy certificate,
completion certificate and permissions from B.M.C. &
other authorities.
e) Non-payment and/or delay in payment by the
Purchaser/s of the balance amount of the agreed
purchase price, as payable in installments on the due
dated as stated hereinabove to the DEVELOPERS.
f) Force majeure circumstances or conditions or other
the control of or unforeseen by the DEVELOPERS
including strikes or other agitation by the workers,
employees of laborers of the DEVELOPERS or other
contractors or suppliers.”
(Emphasis added)
117. At this stage only, it is required to be noted that as per
Clause No. 14, the date fixed for handing over possession is 31 st
December 2010, whereas the learned Appellate Tribunal has directed
payment of interest to the allottees at the rate of 10.05% per annum
effective from 1st February, 2014 till handing over actual possession.
In fact, as far as other flat purchasers are concerned the date of
handing over possession is 31 st December 2008 and 31st December
2009. The said Order has not been challenged by the allottees. Thus,
the extension of time granted upto 1 st February 2014 is beneficial to
the Appellants.
174
SA 251.2022.doc 29.12
118. It is required to be noted that in this case, as the
Respondents have decided to continue with the project, they have got
unqualified right to get interest in view of delayed possession. It is
required to be noted that the Agreement for Sale in case of Samira
Sultan Ali Mohammed is dated 31 st December, 2007. The agreed date
of handing over possession as per Clause 14 is 31 st December, 2010.
Admittedly, till 2026, possession of the flat has not been handed over.
As noted earlier one of the Respondent i.e. the Allottee has paid 100%
of the consideration and some of the Allottees i.e. Respondents have
paid between 50% to 60% of the consideration. In any case, most of
the Respondents i.e. the Allottees have paid substantial consideration
towards the purchase of flats to the Appellant- Promoter about more
than 15 years back. The Agreements are of the year 2006-07 and the
date of handing over possession is of 2008-10 and till the year 2026
the possession of the respective flats has not been handed over to the
respective Allottees. As far as the Tower C is concerned the same has
been partly constructed earlier and thereafter it has been demolished
and now it has again being constructed.
119. Thus, even after a period of almost twenty years of
execution of agreement, and after lapse of about sixteen years from
the agreed date of handing over possession, the possession has not
been handed over.
175
SA 251.2022.doc 29.12
120. The Appellants have also relied on Clause 15 of the
agreement executed with the flat purchasers, which reads as under :
“15. The Developer has already informed to the
purchaser/s and the Purchaser hereby acknowledges that
the land on which the proposed buildings are being
constructed/ developed is the subject matter of the forest
issues/disputes. The Developer has already filed a Writ
Petition No.1578 of 2006 before the Hon’ble High Court
at Bombay challenging the mutation entry inserted by
the City Survey Officer in the property card register
stating that the said land is the forest land and no
development/construction will be allowed unless NOC
from the forest department is obtained in respect of the
said land. In the said Writ Petition the Hon’ble High
Court at Bombay passed an order dated 25th July 2006
and granted injunctions to the developer as prayed in the
said Writ Petition. Thereafter, State Govt. of Maharashtra
has challenged the said order dated 25th July 2006
passed by Hon’ble High Court at Bombay by filing a
Special Leave Petition (SLP) No. 14068 of 2006 in the
Hon’ble Supreme Court of India and Hon’ble Supreme
Court of India vide its order dated 25th April, 2007
directed that no third party interests to be created on the
said land. The said Writ Petition and SLP are still
pending before the Hon’ble High Court at Bombay and
Hon’ble Supreme Court of Indla respectively for the final
hearing.
In view of the aforesaid position and pendency of the
matter, the Developer hereby expressly inform and clarify
to the Purchaser/s that the Developer will not be
liable/responsible to handover possession of the said flat
on 31.12.2010 as mentioned in clause no. 14 of this
Agreement, and due to this unavoidable circumstance,
the Developer will be entitled for automatic extension of
time for handing the possession of the flat to the
purchaser/s until Writ Petition and SLP are finalized by176
SA 251.2022.doc 29.12the respective Hon’ble Court. The Purchaser/s hereby
state, declare, confirm that in case of any delay after
31.12.2010 in handing over possession of the said flat
the Purchaser will not demand/ask/ insist for any
interest consideration and/or compensation of any
nature from the Developer and accordingly the
Purchaser/s hereby unconditionally and irrevocably
waive all such claim, interest, demand from the
Developer or otherwise.”
121. In view of the above clause and earlier Clause 14, it is
necessary to set out the reasons given by the learned Appellate
Tribunal, which are to be found in paragraph Nos. 13 to 18, which
read as under :
“13) In Suit no.962/14 pending before Hon’ble
High Court, on February 14, 2018 Runwal were
restrained from creating third party interest in
respect of an area of 14,343.76 sq.ft. in A-1
Building. On 2nd July, 2018, based on Minutes of
Order, same area was directed to be maintained and
an undertaking was given by Runwal not to transfer,
alienate, deal with, dispose of or encumber such
area of 14,306 sq.ft, in A-1 Bldg.
14) Thus, the stay or its impact would not
generate any momentum in favour of the Promoter
to take shelter and scaffolding to protract the matter
of handing over possession. The mitigating
circumstances referred by Shri Jagtiani highlighted
hereinbefore, were not of such grave quality which
has inhibited or stalled complete construction
activities of the Promoter. The Government of India
clarification in respect of Environmental Clearance
indicated in Notification dated 21st August, 2013
Paragraph 2 & 3 thereof reads as under:
177
SA 251.2022.doc 29.12
“2. And whereas the above said notification
was further amended vide notification
number S,O. 356(E), dated the 4th May,
1994, Clause (c) of sub-paragraph (III) of
paragraph (2) of the said notification
provides that –
“the clearance granted shall be
valid for a period of five years from
commencement of the construction
or operation”.
3. And whereas the intent of the Central
government has been and has always been
that the validity of the environmental
clearance is five years “for” commencement
of the construction or operation and not
that the environment clearance is only for
five years “from” the commencement of
construction or operation.
This also need not be ignored.
15) Thus, the Promoter cannot be further
permitted to put a blame to the Environmental
Clearance. Even if all the constraints flashed by
Promoter are positively considered but the issue that
triggers here is there was adequate time for the
Promoter to complete the project in given schedule.
There should not be a misconception that unilateral
terms in Agreement dehors the statutory obligations
will prevail. In fact, they are contrary to the
statutory Scheme. The Preamble referred to above,
Rule 4 indicated above, provides for a revised date
of possession for an ongoing project, commensurate
with extent of balance development. As indicated
hereinbefore, Building B-2 is complete by 80% and
Building B-1 by 90%. In the situation, it is beyond
comprehension to extend time to the Promoter to
meet the dreams of flat purchases by July 2024.
178
SA 251.2022.doc 29.12
reasonableness on both the sides. The matter needs
to be looked There should be with larger picture
from a wider perspective to the benefit of both the
stakeholders. The Allottees should not be tormented
viciously.”
16) The dialogue of resolution of controversy by
providing escalation, as stated earlier has failed.
Escalation letters signed by three Allottees
(AT006000000000291, AT006000000000290 and
AT006000000000281) will not tilt the picture from
liability of the Promoter to pay interest for delayed
possession.
(17) The Allottees have stated in the light of stage of
the construction, the Promoter should be directed to
hand over possession within a period of 12 months.
However, I propose it should be 18 months. So far as
Bldg. C is concerned, the reasonable period could be
30 months. However, considering the facts as
pointed by Shri Jagtiani, and giving concession, to
strike balance between the parties, I propose to
award interest in favour of Allottees after orders in
the S.L.P. dated 30th January, 2014. The Promoter
shall release interest in favour of the Allottees /
Appellants effective from 1st February, 2014. This
will be in tune with Scheme of RERA Preamble and
Judgement in Neelkamal.
18) Shri Jagtiani has also referred to the
judgement of Hon’ble Supreme Court reported in
(2013) 12 Supreme Court Cases 776 in the matter of
Hansa V. Gandhi Versus Deep Shankar Roy and Ors.
In the said Judgement, Letter of Intent was issued in
favour of Appellant / Plaintiff therein and suit for
specific performance was filed. The Letter of Intent
provided, ‘only upon payment of purchase price, the
developer and the purchaser were to enter into an
Agreement with regard to sale of flats. However, in
this context, Hon’ble Supreme Court directed that no
specific performance of one flat could be granted,
179
SA 251.2022.doc 29.12
however, allowed of Plaintiff’s money with 9% per
annum. Then the Letter of Cancellation was written
by developer to the purchaser. In the instant case,
for few of the Appellants, Allotment Letters are
issued. Almost all the stipulations are briefly
identified/ except date of handing over possession.
That will not change the scenario as it should be in
consonance to the prevailing statute Maharashtra
Ownership of Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act,
1963 (MOFA)’ which mandates specification of date
of possession. Impact of MOFA is not taken away as
could be seen in Section 88 of RERA. Thus, non-
mention of date of possession in the Allotment
Letter will not detrimental to such Allottees.”
(Emphasis added)
122. Thus, although the date of handing over possession is from
2008-2010, the learned Appellate Tribunal, by taking into
consideration several aspects, as set out in the reasons, has specified
that payment of interest be granted to the Allottees with effect from
1st February, 2014. It is also required to be noted that as contended
by the Respondents, when the agreements were executed with the flat
purchasers in the year 2006-2007, the plan was to construct only 490
flats but now the plan is to construct 1003 flats in the same layout.
Thus, in fact, the delay has not adversely affected the promoter.
123. Although, it is the contention of the Appellants that the
circumstances namely pendency of High Court Petition and the SLP
are set out in the agreement and therefore, it is specifically mentioned
that there will be delay in handing over possession, it is required to be
180
SA 251.2022.doc 29.12
noted that the Appellants have accepted 100% consideration from the
Respondents in Second Appeal No. 259 of 2022, the Appellants have
accepted from about five Allottees i.e. Respondents consideration of
about 50%-60% and from about four Allottees i.e. Respondents
consideration of 36%-41% has been accepted. All these amounts were
paid about 15 years ago and till the year 2026 the possession of
respective flats has not been handed over to the flat purchasers. If it is
the case of the Appellants that construction could not be made for the
reasons which are already set out in flat purchasers’ agreement, then
the Appellant should not have accepted the huge considerations.
124. As noted herein above, what is granted by the learned
Appellate Tribunal is only interest for delayed possession. The factors
on which the Appellants have relied and which are considered by the
learned Appellate Tribunal in the Impugned Order and granting
benefit of extension of about five years and two months/ four years
and two months/ three years and two months for respective Allottees
for giving interest, are in fact the factors required to be taken into
consideration if allottee withdraws from the project and seeks
compensation. In all these Second Appeals, the Appellants have
continued with the project. As noted hereinabove, even after a delay
of more than 18/17/16 years, the allottees could not get possession.
The observations of the Supreme Court in Newtech (Supra) in
181
SA 251.2022.doc 29.12
paragraph No. 12 to the effect that in India, the data shows that about
more than 77% of total assets of an average Indian household are
held in real estate and it is the single largest investment of an
individual in his lifetime, the real estate in India has a peculiar
feature, the buyer borrows money to pay for a house and
simultaneously plays the role of a financer as building projects collect
money upfront and this puts the buyer in a very vulnerable position–
the weakest stakeholder with a high financial exposure, are squarely
applicable to the present case. In the present case, the agreements
were executed with flat purchasers in the year 2006-2007 wherein the
date of handing over possession is 2008-2009-2010 and till 2026, the
flat purchasers are not handed over possession even after paying
valuable consideration.
125. Apart from the reasons given by the learned Appellate
Tribunal, as far as Clauses of the Agreement executed between the
Appellants and allottees, the same shows that one sided clauses are
incorporated. The Supreme Court in the case of Pioneer Urban Land
and Infrastructure Limited vs. Govindan Raghavan 46 has held in
paragraph Nos. 6.7, 6.8 and 7 as under :
“6.7. In Central Inland Water Transport Corpn. Ltd. v.
Brojo Nath Ganguly [Central Inland Water Transport Corpn.
Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156 : 1986 SCC
(L&S) 429] this Court held that: (SCC p. 216, para 89)46 (2019) 5 SCC 725
182
SA 251.2022.doc 29.12“89. … Our Judges are bound by their oath to
“uphold the Constitution and the laws”. The
Constitution was enacted to secure to all the citizens
of this country social and economic justice. Article 14
of the Constitution guarantees to all persons equality
before the law and the equal protection of the laws.
… This principle is that the courts will not enforce
and will, when called upon to do so, strike down an
unfair and unreasonable contract, or an unfair and
unreasonable clause in a contract, entered into
between parties who are not equal in bargaining
power. It is difficult to give an exhaustive list of all
bargains of this type. No court can visualise the
different situations which can arise in the affairs of
men. One can only attempt to give some illustrations.
For instance, the above principle will apply where the
inequality of bargaining power is the result of the
great disparity in the economic strength of the
contracting parties. It will apply where the inequality
is the result of circumstances, whether of the creation
of the parties or not. It will apply to situations in
which the weaker party is in a position in which he
can obtain goods or services or means of livelihood
only upon the terms imposed by the stronger party or
go without them. It will also apply where a man has
no choice, or rather no meaningful choice, but to give
his assent to a contract or to sign on the dotted line in
a prescribed or standard form or to accept a set of
rules as part of the contract, however unfair,
unreasonable and unconscionable a clause in that
contract or form or rules may be. This principle,
however, will not apply where the bargaining power
of the contracting parties is equal or almost equal.
This principle may not apply where both parties are
businessmen and the contract is a commercial
transaction. … These cases can neither be
enumerated nor fully illustrated. The court must
Judge each case on its own facts and circumstances.”
183
SA 251.2022.doc 29.12
(emphasis supplied)
6.8. A term of a contract will not be final and binding if it is
shown that the flat purchasers had no option but to sign on
the dotted line, on a contract framed by the builder. The
contractual terms of the agreement dated 8-5-2012 are ex
facie one-sided, unfair and unreasonable. The incorporation
of such one-sided clauses in an agreement constitutes an
unfair trade practice as per Section 2(1)(r) of the Consumer
Protection Act, 1986 since it adopts unfair methods or
practices for the purpose of selling the flats by the builder.
7. In view of the above discussion, we have no hesitation
in holding that the terms of the apartment buyer’s
agreement dated 8-5-2012 were wholly one-sided and
unfair to the respondent flat purchaser. The appellant
builder could not seek to bind the respondent with such
one-sided contractual terms.”
(Emphasis added)
126. As already discussed hereinabove, in the present case, the
agreements were executed with flat purchasers in the year 2006-2007
wherein the date of handing over possession is 2008/2009/2010 and
till 2026, the flat purchasers were not handed over possession even
after paying valuable consideration and in these circumstances the
Appellants are relying on the clauses of the agreement to deny the
benefit to the Allottees of proviso to Section 18(1) of RERA of
receiving interest on the amount paid by the flat purchasers due to
delay in handing over possession. Thus, the above observations in the
case of Pioneer Urban Land and Infrastructure Limited vs. Govindan
Raghavan (supra) are squarely applicable to the present case.
184
SA 251.2022.doc 29.12
127. In view of the facts and circumstances of this case, various
decisions of the Supreme Court on which the Appellants have relied
are not applicable to the present case.
128. The contentions of the Appellants regarding proviso to
Section 18(1) of RERA are also misconceived as scheme of RERA
including of Section 18 of the same has been considered by the
Supreme Court in Newtech (supra) and it has been specifically held
that allottee has unqualified right to get interest if there is delayed
possession. The contention that in Newtech (supra), the Supreme
Court was considering the prayer of the home-buyers for refund of the
investments made along with interest and therefore the said decision
will not apply to the present case as in the present case, the allottees
are continuing with the project, is a misconceived contention, as in
the Newtech (supra), the Supreme Court has considered and
interpreted the scheme of RERA. Thus, various judgments cited
regarding a little difference in facts or additional facts may make a lot
of difference in the precedential value of a decision will not apply to
the present case.
129. The reliance on the judgment of Sanvo Resorts Private
Limited (Supra) is totally misconceived. In fact, the observations of
the said judgment in paragraph Nos. 21 clearly supports the case of
the Respondents. The said paragraph No. 21 is as under :
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SA 251.2022.doc 29.12
“21. In this context, the Supreme Court in the case of
Newtech Promoters and Developers Pvt. Ltd.(supra) in
paragraphs 22 and 25 has expressly observed that the
allottee has an unqualified right to claim interest under
Section 18(1) of the RERA Act if the promoter fails to
discharge his obligation in accordance with the terms and
conditions of the agreement. This unqualified right is not
dependent on any contingencies or stipulations and
therefore the legislature has consciously provided this right
of refund as an unconditional absolute right to the allottee
if the promoter fails to give possession within the stipulated
time regardless of unforeseen events or stay order of the
Court which is in either way not attributable to the
allottee.”
(Emphasis added)
130. The reliance on the judgment of Neelkamal (supra) of this
Court is also misconceived as after considering the scheme of the
RERA, the Supreme Court in Newtech (supra) has held that the right
to receive interest for delayed possession as per Section 18 is
unqualified right of the allottee.
131. Thus, for the above reasons there is no substance in the Fifth and
Sixth Substantial Questions of Law.
132. The additional substantial question of law framed by order
dated 7th April, 2025 will be considered hereinafter. The said
substantial question of law is numbered as seventh and the same is
reproduced hereinbelow :
SEVENTH SUBSTANTIAL QUESTION OF LAW :
When agreement in the form of a booking form, gets
186
SA 251.2022.doc 29.12frustrated on account of force majeure as well as due to
making its performance impossible, whether such an
agreement can be considered while exercising power under
section 18 of RERA?
133. This substantial question of law is involved only in Second
Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022.
134. The submissions in Second Appeal No. 253 of 2022 were
advanced by Mr. Rajeev Chavan, learned Senior Advocate and Second
Appeal No. 257 of 2022, the same were advanced by Mr. Ditendra
Mishra, learned Advocate appearing for the Appellant. Mr. Anjani
Kumar Singh has advanced the submissions on behalf of the
Respondents.
135. The above substantial question of law has been framed as it
is the contention of the Appellants that on 18 th September, 2007, and
17th January, 2006, respectively, allottees in these two Second Appeals
booked respective flats in “C” Wing however, due to certain
circumstances, the agreement has frustrated as understood in law and
the parties are discharged from obligations thereunder.
136. The factual aspects as set out by the Appellants in written
submissions regarding Second Appeal No. 253 of 2022 are set out
hereinbelow as according to the Appellants, the frustration of contract
has taken place due to the said factual aspects.
Sr. No. Date Event
1 18.9.2007 The Respondent (Second Appeal No. 253
187
SA 251.2022.doc 29.12
of 2022) submitted a booking form for
booking Flat No.1101 in ‘C’ Wing for a
total consideration of Rs.57,61,050/-+
applicable taxes and other charges.
2 21.9.2007 to The Respondent (Second Appeal No. 253
1.12.2008 of 2022) paid Rs. 22,00,000/-.
3 18.10.2017 The Appellant issued a Declaration on
the registration page of the subject
project that Tower-C is unstable and is
required to be demolished.
4 29.6.2018 MCGM issued a Note Sheet insisting on
requirement of two staircases for Tower-
C.
5 10.10.2018 Technical Report issued by Mahimtura
Consultants Pvt. Ltd, inter alia, stating
that structural elements of Tower-C are
deficient and it would be practical and
time efficient to demolish and rebuilt the
structure rather than retrofit the same
with additional requirements including
staircase.
6 19.2.2019 The Appellant furnished a Declaration
that Tower-C is required to be
demolished as it is not possible to
provide a second staircase as required
under DCPR 2034 without affecting the
structural stability of Tower-C.
7 3.4.2019 Recommendation of Mahimtura
Consultants Pvt. Ltd to demolish the
existing building, inter alia, in view of
the necessity to provide second staircase
under DCPR 2034.
8 12.8.2019 Letter addressed by the Appellant to the
Respondent informing him that Tower-C
is required to be demolished and calling
upon him to accept revised prices
(nominal additional cost).
9 13.2.2020 MCGM granted permission to demolish
Tower – C.
(Emphasis added)
188
SA 251.2022.doc 29.12
In Second Appeal No. 257 of 2022 the total consideration is
Rs.39,30,250/- whereas, the Respondent has paid on 31 st December
2006 total amount of Rs.15,12,589/-. Thus, about 40% of the
consideration has been accepted by the Appellants, whereas about
39% of the consideration has been accepted by the Appellants in
Second Appeal No. 253 of 2022.
SUBMISSIONS OF THE APPELLANTS CONCERNING SEVENTH
SUBSTANTIAL QUESTION OF LAW:-
137. Mr. Rajeev Chavan, learned Senior Advocate for the
Appellant in Second Appeal No. 253 of 2022 and Mr. Ditendra Mishra,
learned Advocate in Second Appeal No. 257 of 2022 appearing for the
Appellants, inter alia raised the following contentions :
i. It is submitted that the original allotment of Flat No.1101 and
Flat No.703 in Tower C is/stood frustrated as understood in law and
the parties are discharged from obligations thereunder. There is no
flat of the specifications and nature that was sold to the Respondents
in Appeal nos. 253 of 2022 and 257 of 2022 in existence due to the
above. The claim of the Respondents in the abovesaid appeals is hit by
Section 56 of the Indian Contract Act, 1872.
ii. It is pertinent to note that, apart from the Respondents in Appeal
No. 253 of 2022 and Appeal No. 257 of 2022, there were 42 similarly
placed buyers in Tower – C as well. The Appellant has either returned
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SA 251.2022.doc 29.12the monies of such buyers with interest, or shifted them to another
tower in the project on revised terms, and both such options were also
given to the aforesaid Respondents in the abovesaid appeals, but to no
avail.
iii. As submitted, on account of the Forest Land issue and other
issues, the Appellant was unable to continue and complete
construction of the subject project. In the meantime, DCPR 2034 was
enforced. Consequently, the Appellant was required to be compliant
with the provisions thereof in respect of the subject project as the
same was incomplete on the date enforcement of DCPR 2034.
iv. As is evident that the note sheet of MCGM, an additional staircase
of 2 meters was insisted upon as per DCPR 2034 in respect of Tower
C. As is also evident from the documents referred to hereinabove, it
was not possible to retrofit at second staircase on Tower-C (which was
already constructed upto 12th floor in 2005) without affecting its
structural stability. In the meanwhile, since the structure was at a
standstill since several years, it had also become dilapidated and a
threat to life and property. Consequently, the said Tower-C was
required to be demolished.
v. The contention of the Respondent that the aforesaid frustration is
self-induced as the Appellant increased the height of the structure
which led to the requirement of a second staircase. The aforesaid
190
SA 251.2022.doc 29.12contention is false as the original Tower C was proposed to be a 22
storied structure and its height was proposed to be 80.15 meters.
DCPR 2034 requires any structure having a height of more than 70
meters to contain 2 staircases. There was no such requirement in DCR
1991. Thus, the requirement of a second staircase was based on the
original proposal of 22 floors. In any event, since the building had
become dilapidated, and the MCGM had allowed the Appellant to
demolish the same, the question of self-induced frustration does not
arise.
vi. It is well settled that if the performance of any part of the
contract becomes impossible, the contract stands frustrated, and the
parties are absolved of any further obligations or performance thereof.
In this regard, attention of this Hon’ble Court is invited to the
following decisions:-
(i) Satyabrata Ghose vs. Mugneeram Bangur and
Company47, (paragraphs 8 to 18);
(ii) Industrial Finance Corporation of India Ltd vs.
Cannanore Spinning and Weaving Mills Ltd48, (paragraphs
40 to 42);
(iii) Loop Telecom and Trading Ltd vs. Union of India 49,
(paragraphs 56 and 57).
47 (1953) 2 SCC 437
48 (2002) 5 SCC 54
49 (2022) 6 SCC 762
191
SA 251.2022.doc 29.12
vii. It is further submitted that even paragraph 308 of the decision of
this Hon’ble Court in Neelkamal Realtors (supra) recognizes the
concept of frustration in the context of RERA.
viii. The Respondent Buyer’s contentions that their consent is
required to demolish the Tower C, or to change plans of the project is
squarely contrary to the Clause 1 of the Model Agreement for Sale, as
notified under the MahaRERA Rules, 2017, which provide that where
a promoter is required to change the plans of a project due to change
of law, or directions of the authorities etc., consent of the Buyers is
not required.
ix. In the aforesaid circumstances, it is submitted that the contract
having stood frustrated, the Appellant is not liable under Section 18
of RERA and on this ground alone, the impugned Order is liable to be
set aside.
x. In addition to the above submissions, it is submitted that due to
the demolition of said Tower C, majority of the affected allottees have
accepted the reasonable price escalation and therefore it is submitted
that price escalation of Rs. 2,500/- per sq. ft. will be applied if the
Respondents in Second Appeal No. 253 of 2022 and Second Appeal
No. 257 of 2022 accept the same.
SUBMISSIONS OF THE RESPONDENTS CONCERNING SEVENTH
SUBSTANTIAL QUESTION OF LAW:-
192
SA 251.2022.doc 29.12
138. Mr. Singh, learned Counsel of the Respondents raised the
following contentions:
i. It is submitted that the award was passed on 1st November
2018, thereafter the appellant has filed these all present second
appeals. The appeals were admitted on the deposit of 30% of the
award amount. And the execution of the impugned order dated 1st
November 2018 is stayed.
ii. During the course of hearing, the appellant in the aforesaid
appeals have filed an affidavit in second appeal no. 253 of 2022,
bringing the subsequent facts on record which cannot be considered
in the second appeal because the MahaREAT is the last facts finding
court and is the court of records. In the second appeal, no additional
facts can be considered by this Hon’ble court as per the settled
position of law
iii. However, the appellant has filed an application which was
converted as an affidavit by order dated 11th March 2025 passed by
this Hon’ble Court, bringing the subsequent facts of 2019, 2020 and
2021 on record before this Hon’ble Court. In reply to the said affidavit
filed by the appellant, the respondent has also filed reply affidavit on
20th June 2025 rebutting all the manufactured, concocted and
afterthought contentions raised by the appellant before this Hon’ble
Court about the building no. C.
193
SA 251.2022.doc 29.12iv. The fact remains that building no. C also known as tower no. 2,
originally registered under Project registration number
P51800012621 as an ongoing project and subsequently after
demolition registered as new project under Maharera project
registration number P51800032538 on 10 January 2022. Which is
valid up to 31 March 2027, it clearly shows that everything has been
done subsequent to the award dated 1st November 2018 passed and
during the pendency of the present second appeal, but the brazen
conduct of the appellant was that, the appellant never filed an
application to inform the court or in any proceeding has felt necessary
in respect of order of this Hon’ble Court, that appropriate permission
ought to have been taken. But, appellant has never deemed it
important and now, as an afterthought denying the rights, title and
interest of the respondents in the said flats. It is a matter of record,
neither in original appeal any such grounds are made, even previously
the matter was finally heard and kept for judgement, during the last
hearing before reserving for the judgement no such argument was
advanced and no such fact was brought on record. Therefore, all these
developments, as set forth are afterthought, concocted and not
maintainable in the eye of law.
v. It is submitted that, in the said building, flat no. 1101 was
allotted to Mr. Korgaonkar and flat number 703 was allotted to Mr
194
SA 251.2022.doc 29.12Satish Shirshekhar, the constructions of the flats were completed.
Therefore, the specific consent ought to have been taken before the
demolition of the said two flats of the respondents but the brazen
conduct of appellant was that, appellant never deemed fit to seek any
consent also from the flat purchasers. The retrofitting of building no.
B1 and B2 were also C for carried out and there was an option also
for building no. retrofitting, but the same has not been done
purposely and intentionally only to avail more benefit that is from
22nd floor to 46th floor permission was obtained to consume the
entire benefits as available in the layout under DCPR of 2034. The
appellant with dishonest claim of frustration of contract are trying to
justify their dishonest conduct and now trying to deprive the
respondents from their dream home.
vi. It is submitted that the said reply affidavit dated 9 th May 2025
tendered on 20th June 2025 may be read as if the same is reproduced
herein, the para no. 3 to 20 confirms that the afterthought, concocted
factual matrix mentioned in the affidavit by the appellant has not
been available before the MahaREAT on 1st November 2018. More so,
the said created and concocted facts were applied when the relevant
second appeals were sub-judice before this hon’ble court and the
building no. C has been demolished without seeking permission from
this Hon’ble court. The appellant had also failed to adhere to the
195
SA 251.2022.doc 29.12terms of section 14 of RERA Act and without permission of the
respondents and other flat purchasers had changed the entire plan,
specification and design of the said flat and building which is not
permissible under section 14 of the RERA.
vii. It is therefore submitted that the contentions advanced on behalf
of the appellant for building No. C is manufactured, concocted and
afterthought contentions. The same is subsequently designed and
cultivated only to argue a case of frustration of contract. However,
there is no such case has been made out and neither existed at the
time when the award was passed. In view thereof, it is respectfully
submitted that the entire case of the frustration of contract and
impossibility of contract is not maintainable.
viii. The appellant has heavily relied upon for the frustration of
contract. However, on the basis of facts, there is no case made out by
the appellant for the frustration of contract or impossibility of
contract due to alleged force majeure as framed in the question of
Law no. 8, but even though the appellant has heavily relied upon, in
support of the case of frustration of contract, Satyabrata Ghose
(supra). The judgment of Satyabrata Ghose (supra) is completely
dealt with, in the judgement of the Supreme Court in the matter of
Energy Watchdog vs. Central Electricity50, regulatory commission and
others relied upon by the respondent. The aforesaid judgment has
50 (2017) 14 SCC 80
196
SA 251.2022.doc 29.12
dealt with the doctrine of frustration, Section 56 of the contract act in
detail and the circumstances when it may be applied. The respondent
refers to paragraph no. 34 to 42 at page no. 33 to 36 and para no. 47
at page no. 42. If the paragraph number 34 to 42 and 47 is to be read
and applied to the present facts of the case, then it can be clearly
concluded that in the present factual matrix, the frustration of
contract does not apply to the present case. It is submitted that, this
entire argument has been raised completely afterthought without
mentioning the same in the grounds of appeal. This issue has been
raised subsequently filed by way of an affidavit along with certain
documents which were not available on the award dated 1st
November 2018. Further, the exhibit A to the reply affidavit dated 9th
May 2025 filed by the respondents clearly shows that the proposal
was made by the architect of the appellant for demolition of the
building no. C. The provision of retrofitting was available for the said
building no. C. The provision of second staircase was also
maintainable and suggested by the Municipal Commissioner and the
same was valid as per the order of municipal Commissioner but only
to garner more benefit and double profit and consumption of
complete layout benefit under DCPR 2034, the architect of the
appellant has proposed to demolish the building instead of
retrofitting. However, the retrofitting was done in the building no. B1
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SA 251.2022.doc 29.12
and B2 in the same layout, it is respectfully submitted that the
demolition of building was not an act of force majeure. Rather it was
a well designed and planned proposal given by the appellant in the
given circumstances to avail heavy profit and the municipal
corporation had never enforced to demolish the said building no. C.
The appellant is taking a fraudulent, concocted and afterthought
submission only to avail the doctrine of frustration of contract, as per
section 56 of the contract act. As per the judgements relied upon,
which clearly says that escalation in price or et cetera cannot be a
reason for the frustration of contract. In the present case presuming
for a moment, if any escalation of price has taken place for any
reason, but the purpose of the contract cannot be declared frustrated,
it is submitted that the contentions of frustration of contract does not
apply to the present case at all.
ix. The respondents have also relied upon 2021, SC online Bombay
12330 in the matter of Bombay Dying & manufacturing Company
Limited versus Ashok Narang and another. The para no. 7 at page
no.5, of the aforesaid judgement, the questions of law has been
framed. Total 10 questions of law have been framed which is self-
explanatory and which have also the bearing on the case of the
respondent herein. The para 21 of the aforesaid judgment deals with
the fact that no agreement is required and only the allottee can also
198
SA 251.2022.doc 29.12
be entitled to the claim on the basis of the allotment letter. The para
27 of the aforesaid judgment and page no. 16 clearly states that the
provisions of RERA do not rewrite the clause of completion or
handing over possession in the agreement for sale. It only enables the
promoter to give fresh time line, independent of the time period
stipulated in the agreement for sale entered into between him and the
flats purchasers, so that he’s not visited with the consequences laid
down. In other words by giving opportunity to the promoter to
prescribe fresh time line under section 4(2) (1) (C). He is not
absolved, of the liability under the agreement for sale. The promoter
cannot see any concession from the same and the interest on delayed
possession under section 18 is to be ordered and be given in favour of
the respondents. The para 28 further continues and confirms the civil
liability of interest on delay. Para 37 of the judgement clearly states
that after due analysis of the various sections and rules about the
rights of allottees which is defined under section 2(d) of the act of
2016. Accordingly, it comes to conclusion that none of the provision
set out a requirement of formal written agreement for sale in order to
enable the allottee to enforce the rights It is submitted that the only
holder of the flat Mr. Nitin Korgaonkar shall be eligible and entitled
for the relief as made there in. The non- availability of the agreement
shall never become an hindrance in the claims to be made on behalf
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SA 251.2022.doc 29.12
of the respondent. The para 46 of the aforesaid judgment clearly says
that the tribunal is a final fact finding authority and therefore new
facts if any brought subsequent to that and that is also without
permission and with brazen conduct and by violating the section 14 of
the act, the same cannot be accepted because the same was also not
available before the tribunal at the relevant period of time while
passing the award. In the para 48, the judgement of Fortune
infrastructure, pioneer, urban land was discussed that the flat
purchaser cannot wait for indefinite period of time for getting their
dream home and maximum time period of three years can be
reasonable time period for completion of the contract, however, in the
present matter because of no fault of the respondent, the respondent
has waited for their dream home from 2006-7 till date and the
learned tribunal has awarded the interest on delayed possession from
1st February 2014 and around seven years of mitigating
circumstances benefit has been given to the appellant, but still is
acting in a very greedy manner and since 2014 till today, after about
10 years, the appellant is acting in a dillydallying, manner. It is
submitted that on the basis of the facts the award was passed by the
learned MahaREAT, the said award is still subsisting and the same is
temporarily stayed in such case the subsequent designed conduct of
the appellant can not be allowed to avail the law of frustration of
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SA 251.2022.doc 29.12
contract. The conduct of the appellant was foreseen, planned and
applied intentionally, hence the arguments advanced by the appellant
is frivolous.
x. As far as question of law no. 8 is concerned, the appellant has
heavily relied upon the subsequent demolition of the building no.
after the award passed dated on 1 November 2018 and during the
pendency of second appeal on the basis of impossibility of contract
and frustration of contract. The appellant has relied upon various
judgements of High Court and Supreme Court, which are mentioned
here under. The appellant has relied upon (2002) 5 SCC 54. The
appellant has relied upon para no. 40, 42 and 43 of the aforesaid
judgment at page no. 21 and 22. However, the para 40 of the said
judgment relied upon by the appellant supports the case of the
respondent because in the last line, at para 40 at page no. 21, it
mentions about situations which would be considered as unforeseen.
However, in the present matter the supervening event, if any, have
been avoided and overcame, because from the tower of 22 floors, the
48 floors of towers has been permitted to construct, therefore no
frustration of contract can be made applicable in the present case. It is
submitted that para 40,41,32 actually supports the case of the
respondents because the retrofitting was done to building number B1,
B2 so it could have also been done for building no. C. Further it is
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SA 251.2022.doc 29.12
surprised to note that a supervening event which has allegedly
occurred for the building C has not been occurred for building
number B1/B2,. Though the age, constructions, and layout of the said
building no. B1 & B2 are the same.
xi. Appellant has relied upon judgment in the matter of M/s Imperial
Structures Limited (supra) and another and have relied upon by
Appellants of para 33 at page no. 42 (Para 37 of (2020) 10 Supreme
Court cases 783). It is submitted that the reference to the para 33 is
completely misleading. The aforesaid para 33 talks about the rights
available to flat purchasers as per the builders buyers agreement, the
cause of action and the date of possession. Though after registration
under the RERA extension of time has been given for the possession.
The Pioneer judgement, as relied upon by the respondents is a direct
and subsequent judgement passed by Hon’ble Bombay High Court.
xii. The appellant has also relied upon the Newtech (supra), in the
aforesaid judgment, the appellant has relied upon para 9, 24, 71,72
for the purpose of contentions that the respondents in the matter of
building no. C can only be entitled to the compensation. However,
that argument does not survive in view of the judgements as relied
upon and discussion made on the frustration of contract. The flats
purchasers are entitled to their claim on the basis of allotment letter
and agreements. Hence, the contentions advanced on behalf of the
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SA 251.2022.doc 29.12
appellant in para number 9,24, 71,72 does not apply. Instead, the said
New tech judgement supports in various ways, the case of the
respondents, the respondents also rely upon the following paragraphs
of the Newtech judgement in support of their case, para 77(in few
judgements para 78) talking about unconditional and unqualified
right to seek interest for delayed possession. The respondents also rely
upon para no. 13.
xiii. The judgment of Satyabrata Ghose (supra), has been heavily
relied upon by the appellant for the purpose of frustration of contract.
However, the aforesaid judgment of 1953 is led by judgment of 2017
that is Energy Watchdog (supra) judgment which has been dealt with
by the respondent, the same has completely covered the findings of
Satyabrata judgement. Hence this judgement is not required to be
dealt with separately.
xiv. In continuation of the same, the appellant has relied upon the
judgement of Loop Telecom (supra). The appellant has relied upon
para 57 page 51. The said para 57 is an emphasis given to the
judgment of Satyabrata Ghose (supra) as mentioned here in above
and while giving the elaboration the court has come to the conclusion
that doctrine of frustration does not only limited to the cases of
physical possibility rather to the cases of human possibility or legality
of the act agreed to be contractually done. it has already been
203
SA 251.2022.doc 29.12
discussed that none of the aforesaid factual matrix have been applied
to the present case. The supervening conditions cannot be picked up
and chosen between three building of B1, B2 and building no. C. The
building no. C was demolished by the appellant for the benefit of the
appellant and for earning more revenue by the appellant. The facts
has been manufactured and created to apply and argue the case of the
frustration of contract, which is not maintainable.
xv. The appellant has also relied upon Amar Singh (supra), at para
no. 20 page no. 11. Which talks about the contract which becomes
impossible or unlawful because of event that the promisor could not
prevent. In the present case, there was no such circumstances arose
prior to the award dated 1st November 2018 and even otherwise also,
whatever the situation arose, it was as per the proposal made by the
appellant for demolition of the building no. C for getting the better
benefits, and in any case, the situation was not impossible and
unlawful because lawful agreement was entered into and in the same
layout building no. B1 and B2 continued, retrofitted and completed,
so there was no impossibility because if impossibility would have been
there in that case, the 22 floors of tower would have not been
converted into the 48 floors of Towers in any circumstances. It is
submitted that the fact was concocted and created for the better
benefit of the appellant and it never attracts the doctrine of the
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SA 251.2022.doc 29.12
frustration of contract.
xvi. The declaration dated 19th February 2019 shows that contract
was not impossible to perform, which is mentioned in the affidavit of
the appellant in para No. 09. It is very clearly undertaken that rights
of the flat purchasers shall be protected. Therefore, the said
undertaking clearly shows that contract was possible, and it has been
made possible to increase the floors around double in the number.
xvii. The appellant has also relied upon the decision in the
matter of M/s Man Global (supra)In the aforesaid judgment. The
appellant has relied upon para 18,19, 20,25, which talks about the
section 18 of Rera its applicability, it also discusses about the Imperia
structures judgment scope of Section 18, finding of the court about
the purpose of the act enacted to achieve the objectives. It is
submitted that the discussions as set forth in the aforesaid paragraphs
applies to the basic principles of the act and its applicability.
xviii. It is respectfully submitted that the plea of frustration of
contract advanced by the Appellants is misconceived. The doctrine of
frustration under Section 56 of the Indian Contract Act, as clarified in
Energy Watchdog v. CERC, (2017) 14 SCC 80, does not apply where
performance remains possible and only commercial expediency is
altered. The deliberate demolition of Building C to exploit DCPR 2034
benefits was a calculated business choice, not a supervening
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SA 251.2022.doc 29.12
impossibility. Further, the Bombay High Court in Bombay Dyeing &
Mfg. Co. Ltd. v. Ashok Narang, 2021 SCC OnLine Bom 12330, has
reiterated that allottees are entitled to relief even on the basis of
allotment letters, and that subsequent unilateral changes by
promoters cannot defeat accrued rights. Therefore, Question 8 must
be answered in the negative and against the Appellant.
REASONING REGARDING SEVENTH SUBSTANTIAL QUESTION OF
LAW :-
139. As the contention is raised by the Appellants regarding
frustration of the contract and reliance is placed on Section 56 of the
Indian Contract Act, 1872, it is necessary to set out Section 56, which
is as follows :
56. Agreement to do impossible act.–An agreement
to do an act impossible in itself is void.
Contract to do an act afterwards becoming
impossible or unlawful.–A contract to do an act
which, after the contract is made, becomes
impossible, or, by reason of some event which the
promisor could not prevent, unlawful, becomes void
when the act becomes impossible or unlawful.
Compensation for loss through non-performance of
act known to be impossible or unlawful.– Where
one person has promised to do something which he
knew, or, with reasonable diligence, might have
known, and which the promisee did not know, to be
impossible or unlawful, such promisor must make
compensation to such promisee for any loss which
such promisee sustains through the non-
performance of the promise.
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140. Thus, what first part of Section 56 contemplates is that an
agreement to do an act impossible in itself is void. It is not even the
contention of the Appellants that by the agreement, what is agreed is
to do an impossible act. Therefore the said first part of Section 56 is
not relevant.
141. Second part of Section 56 contemplates that a contract to
do an act which, after the contract is made, becomes impossible, or,
by reason of some event which the promiser or could not prevent,
unlawful, becomes void when the act becomes impossible or
unlawful. It is the contention of the Appellants that as now the said
Tower C is demolished, it has become impossible to perform the
areement. Thus, it is necessary to consider whether in the facts and
circumstances, it becomes impossible for the Appellants to perform
the contract.
142. Before considering the above aspect, it is necessary to set
out relevant decisions of the Supreme Court interpreting Section 56 of
the Contract Act.
143. Mr. Chavan, learned Senior Counsel has very heavily relied
on the decision of the Supreme Court in the case of Satyabrata Ghose
(Supra) and more particularly on paragraph Nos. 9 to 11 and 21 of
the same, which read as under :
“9. The first paragraph of the section lays down the
law in the same way as in England. It speaks of207
SA 251.2022.doc 29.12something which is impossible inherently or by its
very nature, and no one can obviously be directed to
perform such an act. The second paragraph
enunciates the law relating to discharge of contract
by reason of supervening impossibility or illegality of
the act agreed to be done. The wording of this
paragraph is quite general, and though the
illustrations attached to it are not at all happy, they
cannot derogate from the general words used in the
enactment. This much is clear that the word
“impossible” has not been used here in the sense of
physical or literal impossibility. The performance of
an act may not be literally impossible but it may be
impracticable and useless from the point of view of
the object and purpose which the parties had in
view; and if an untoward event or change of
circumstances totally upsets the very foundation
upon which the parties rested their bargain, it can
very well be said that the promissor finds it
impossible to do the act which he promised to do.
10. Although various theories have been
propounded by the Judges and jurists in England
regarding the juridical basis of the doctrine of
frustration, yet the essential idea upon which the
doctrine is based is that of impossibility of
performance of the contract; in fact impossibility and
frustration are often used as interchangeable
expressions. The changed circumstances, it is said,
make the performance of the contract impossible and
the parties are absolved from the further
performance of it as they did not promise to perform
an impossibility. The parties shall be excused, as Lord
Loreburn says [F.A. Tamplin Steamship Co. Ltd. v.
Anglo-Mexican Petroleum Products Co. Ltd., (1916)
2 AC 397 at p. 403 (HL)] : (AC p. 406)
“… if substantially the whole contract
becomes impossible of performance, or in208
SA 251.2022.doc 29.12other words impracticable, by some cause for
which neither was responsible.”
(emphasis supplied)
In Joseph Constantine Steamship Line Ltd. v. Imperial
Smelting Corpn. Ltd. [Joseph Constantine Steamship Line
Ltd. v. Imperial Smelting Corpn. Ltd., 1942 AC 154 (HL)] ,
Viscount Maugham observed that the “doctrine of
frustration is only a special case of the discharge of contract
by an impossibility of performance arising after the contract
was made”. Lord Porter agreed with this view and rested
the doctrine on the same basis. The question was
considered and discussed by a Division Bench of the
Nagpur High Court in Kesari Chand v. Governor General in
Council [Kesari Chand v. Governor General in Council, ILR
1949 Nag 718] and it was held that the doctrine of
frustration comes into play when a contract becomes
impossible of performance, after it is made, on account of
circumstances beyond the control of the parties. The
doctrine is a special case of impossibility and as such comes
under Section 56 of the Contract Act. We are in entire
agreement with this view which is fortified by a recent
pronouncement of this Court in Ganga Saran v. Firm Ram
Charan Ram Gopal [Ganga Saran v. Firm Ram Charan Ram
Gopal, 1951 SCC 1053 at p. 1059 : 1952 SCR 36 at p. 42] ,
where Fazl Ali, J., in speaking about frustration observed in
his judgment as follows : (Ganga Saran case [Ganga Saran
v. Firm Ram Charan Ram Gopal, 1951 SCC 1053 at p. 1059
: 1952 SCR 36 at p. 42] , SCC p. 1059, para 17)
“17. It seems necessary for us to emphasise that so far
as the courts in this country are concerned, they must look
primarily to the law as embodied in Sections 32 and 56 of
the Contract Act, 1872.”
We hold, therefore, that the doctrine of frustration is really
an aspect or part of the law of discharge of contract by
reason of supervening impossibility or illegality of the act
agreed to be done and hence comes within the purview of
Section 56 of the Contract Act. It would be incorrect to say
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that Section 56 of the Contract Act applies only to cases of
physical impossibility and that where this section is not
applicable, recourse can be had to the principles of English
law on the subject of frustration. It must be held also, that
to the extent that the Contract Act deals with a particular
subject, it is exhaustive upon the same and it is not
permissible to import the principles of English law dehors
these statutory provisions. The decisions of the English
courts possess only a persuasive value and may be helpful
in showing how the courts in England have decided cases
under circumstances similar to those which have come
before our courts.
11. It seems necessary, however, to clear up some
misconception which is likely to arise because of the
complexities of the English law on the subject. The law of
frustration in England developed, as is well known, under
the guise of reading implied terms into contracts. The court
implies a term or exception and treats that as part of the
contract. In Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3
B&S 826 : 122 ER 309] , Blackburn, J. first formulated the
doctrine in its modern form. The court there was dealing
with a case where a music hall in which one of the
contracting parties had agreed to give concerts on certain
specified days was accidentally burnt by fire. It was held
that such a contract must be regarded “as subject to an
implied condition that the parties shall be excused, in case,
before breach, performance becomes impossible from
perishing of the thing without default of the contractor”.
Again in Robinson v. Davison [Robinson v. Davison, (1871)
LR 6 Exch 269] there was a contract between the plaintiff
and the defendant’s wife (as the agent of her husband) that
she should play the piano at a concert to be given by the
plaintiff on a specified day. On the day in question she was
unable to perform through illness. The contract did not
contain any term as to what was to be done in case of her
being too ill to perform. In an action against the defendant
for breach of contract, it was held that the wife’s illness and
210
SA 251.2022.doc 29.12
the consequent incapacity excused her and that the
contract was in its nature not absolute but conditional upon
her being well enough to perform. Bramwell, B. pointed
out in course of his judgment that in holding that the
illness of the defendant incapacitated her from performing
the agreement the court was not really engrafting a new
term upon an express contract. It was not that the
obligation was absolute in the original agreement and a
new condition was subsequently added to it; the whole
question was whether the original contract was absolute or
conditional and having regard to the terms of the bargain,
it must be held to be conditional.
21. It is well-settled and not disputed before us that if and
when there is frustration the dissolution of the contract
occurs automatically. It does not depend, as does recission
of a contract on the ground of repudiation or breach, or on
the choice or election of either party. It depends on the
effect of what has actually happened on the possibility of
performing the contract [Denny, Mott & Dickson Ltd. v.
James B. Fraser & Co. Ltd., 1944 AC 265 at p. 275 (HL)] .
What happens generally in such cases and has happened
here is that one party claims that the contract has been
frustrated while the other party denies it. The issue has got
to be decided by the court “ex post facto, on the actual
circumstances of the case.”
(Emphasis added)
144. Mr. Singh, learned Counsel appearing for the Appellants
relied on the decision of the Supreme Court in the case of Energy
Watchdog (Supra) and more particularly on paragraph Nos. 34 to 42
and 47, which read as under :
“34. “Force majeure” is governed by the Contract Act,
1872. Insofar as it is relatable to an express or implied
clause in a contract, such as the PPAs before us, it is
governed by Chapter III dealing with the contingent
contracts, and more particularly, Section 32 thereof.
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Insofar as a force majeure event occurs dehors the
contract, it is dealt with by a rule of positive law under
Section 56 of the Contract Act. Sections 32 and 56 are set
out herein:
“32. Enforcement of contracts contingent on an
event happening.–Contingent contracts to do or
not to do anything if an uncertain future event
happens, cannot be enforced by law unless and
until that event has happened.
If the event becomes impossible, such contracts
become void.
***
56. Agreement to do impossible act.–An
agreement to do an act impossible in itself is void.
Contract to do act afterwards becoming impossible or
unlawful.–A contract to do an act which, after the
contract is made, becomes impossible, or, by reason of
some event which the promisor could not prevent,
unlawful, becomes void when the act becomes impossible
or unlawful.
Compensation for loss through non-performance of act
known to be impossible or unlawful.–Where one person
has promised to do something which he knew, or, with
reasonable diligence, might have known, and which the
promisee did not know, to be impossible or unlawful, such
promisor must make compensation to such promisee for
any loss which such promisee sustains through the non-
performance of the promise.”
35. Prior to the decision in Taylor v. Caldwell [Taylor v.
Caldwell, (1863) 3 B&S 826 : 122 ER 309 : (1861-73) All
ER Rep 24] , the law in England was extremely rigid. A
contract had to be performed, notwithstanding the fact
that it had become impossible of performance, owing to
some unforeseen event, after it was made, which was not
the fault of either of the parties to the contract. This
212
SA 251.2022.doc 29.12
rigidity of the Common law in which the absolute sanctity
of contract was upheld was loosened somewhat by the
decision in Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3
B&S 826 : 122 ER 309 : (1861-73) All ER Rep 24] in
which it was held that if some unforeseen event occurs
during the performance of a contract which makes it
impossible of performance, in the sense that the
fundamental basis of the contract goes, it need not be
further performed, as insisting upon such performance
would be unjust.
36. The law in India has been laid down in the seminal
decision of Satyabrata Ghose v. Mugneeram Bangur & Co.
[Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR
310 : (1953) 2 SCC 437 : AIR 1954 SC 44]. The second
paragraph of Section 56 has been adverted to, and it was
stated that this is exhaustive of the law as it stands in
India. What was held was that the word “impossible” has
not been used in the section in the sense of physical or
literal impossibility. The performance of an act may not be
literally impossible but it may be impracticable and useless
from the point of view of the object and purpose of the
parties. If an untoward event or change of circumstance
totally upsets the very foundation upon which the parties
entered their agreement, it can be said that the promisor
finds it impossible to do the act which he had promised to
do. It was further held that where the Court finds that the
contract itself either impliedly or expressly contains a
term, according to which performance would stand
discharged under certain circumstances, the dissolution of
the contract would take place under the terms of the
contract itself and such cases would be dealt with under
Section 32 of the Act. If, however, frustration is to take
place dehors the contract, it will be governed by Section
56.
37. In Alopi Parshad & Sons Ltd. v. Union of India [Alopi
Parshad & Sons Ltd. v. Union of India, (1960) 2 SCR 793 :
AIR 1960 SC 588] , this Court, after setting out Section 56
of the Contract Act, held that the Act does not enable a213
SA 251.2022.doc 29.12party to a contract to ignore the express covenants thereof
and to claim payment of consideration, for performance of
the contract at rates different from the stipulated rates, on
a vague plea of equity. Parties to an executable contract
are often faced, in the course of carrying it out, with a
turn of events which they did not at all anticipate, for
example, a wholly abnormal rise or fall in prices which is
an unexpected obstacle to execution. This does not in
itself get rid of the bargain they have made. It is only
when a consideration of the terms of the contract, in the
light of the circumstances existing when it was made,
showed that they never agreed to be bound in a
fundamentally different situation which had unexpectedly
emerged, that the contract ceases to bind. It was further
held that the performance of a contract is never
discharged merely because it may become onerous to one
of the parties.
38. Similarly, in Naihati Jute Mills Ltd. v. Khyaliram
Jagannath [Naihati Jute Mills Ltd. v. Khyaliram Jagannath,
(1968) 1 SCR 821 : AIR 1968 SC 522] , this Court went
into the English law on frustration in some detail, and
then cited the celebrated judgment of Satyabrata Ghose v.
Mugneeram Bangur & Co. [Satyabrata Ghose v.
Mugneeram Bangur & Co., 1954 SCR 310 : (1953) 2 SCC
437 : AIR 1954 SC 44]. Ultimately, this Court concluded
that a contract is not frustrated merely because the
circumstances in which it was made are altered. The
courts have no general power to absolve a party from the
performance of its part of the contract merely because its
performance has become onerous on account of an
unforeseen turn of events.
39. It has also been held that applying the doctrine of
frustration must always be within narrow limits. In an
instructive English judgment, namely, Tsakiroglou & Co.
Ltd. v. Noblee Thorl GmbH [Tsakiroglou & Co. Ltd. v.
Noblee Thorl GmbH, 1962 AC 93 : (1961) 2 WLR 633 :
(1961) 2 All ER 179 (HL)], despite the closure of the Suez
Canal, and despite the fact that the customary route for214
SA 251.2022.doc 29.12shipping the goods was only through the Suez Canal, it
was held that the contract of sale of groundnuts in that
case was not frustrated, even though it would have to be
performed by an alternative mode of performance which
was much more expensive, namely, that the ship would
now have to go around the Cape of Good Hope, which is
three times the distance from Hamburg to Port Sudan. The
freight for such journey was also double. Despite this, the
House of Lords held that even though the contract had
become more onerous to perform, it was not
fundamentally altered. Where performance is otherwise
possible, it is clear that a mere rise in freight price would
not allow one of the parties to say that the contract was
discharged by impossibility of performance.
40. This view of the law has been echoed in Chitty on
Contracts, 31st Edn. In Para 14-151 a rise in cost or
expense has been stated not to frustrate a contract.
Similarly, in Treitel on Frustration and Force Majeure, 3rd
Edn., the learned author has opined, at Para 12-034, that
the cases provide many illustrations of the principle that a
force majeure clause will not normally be construed to
apply where the contract provides for an alternative mode
of performance. It is clear that a more onerous method of
performance by itself would not amount to a frustrating
event. The same learned author also states that a mere rise
in price rendering the contract more expensive to perform
does not constitute frustration. (See Para 15-158.)
41. Indeed, in England, in the celebrated Sea Angel case
[Edwinton Commercial Corpn. v. Tsavliris Russ
(Worldwide Salvage & Towage) Ltd. (The Sea Angel),
2007 EWCA Civ 547 : (2007) 2 Lloyd’s Rep 517 (CA)] ,
the modern approach to frustration is well put, and the
same reads as under:
“111. In my judgment, the application of the
doctrine of frustration requires a multi-factorial
approach. Among the factors which have to be
considered are the terms of the contract itself, its
matrix or context, the parties’ knowledge,215
SA 251.2022.doc 29.12expectations, assumptions and contemplations, in
particular as to risk, as at the time of the contract,
at any rate so far as these can be ascribed
mutually and objectively, and then the nature of
the supervening event, and the parties’ reasonable
and objectively ascertainable calculations as to
the possibilities of future performance in the new
circumstances. Since the subject-matter of the
doctrine of frustration is contract, and contracts
are about the allocation of risk, and since the
allocation and assumption of risk is not simply a
matter of express or implied provision but may
also depend on less easily defined matters such as
“the contemplation of the parties”, the application
of the doctrine can often be a difficult one. In
such circumstances, the test of “radically
different” is important: it tells us that the doctrine
is not to be lightly invoked; that mere incidence of
expense or delay or onerousness is not sufficient;
and that there has to be as it were a break in
identity between the contract as provided for and
contemplated and its performance in the new
circumstances.”
(emphasis in original)
42. It is clear from the above that the doctrine of
frustration cannot apply to these cases as the fundamental
basis of the PPAs remains unaltered. Nowhere do the PPAs
state that coal is to be procured only from Indonesia at a
particular price. In fact, it is clear on a reading of the PPA
as a whole that the price payable for the supply of coal is
entirely for the person who sets up the power plant to
bear. The fact that the fuel supply agreement has to be
appended to the PPA is only to indicate that the raw
material for the working of the plant is there and is in
order. It is clear that an unexpected rise in the price of coal
will not absolve the generating companies from
performing their part of the contract for the very good
216
SA 251.2022.doc 29.12
reason that when they submitted their bids, this was a risk
they knowingly took. We are of the view that the mere fact
that the bid may be non-escalable does not mean that the
respondents are precluded from raising the plea of
frustration, if otherwise it is available in law and can be
pleaded by them. But the fact that a non-escalable tariff
has been paid for, for example, in the Adani case, is a
factor which may be taken into account only to show that
the risk of supplying electricity at the tariff indicated was
upon the generating company.
….
47. We are, therefore, of the view that neither was the
fundamental basis of the contract dislodged nor was any
frustrating event, except for a rise in the price of coal,
excluded by Clause 12.4, pointed out. Alternative modes
of performance were available, albeit at a higher price.
This does not lead to the contract, as a whole, being
frustrated. Consequently, we are of the view that neither
Clause 12.3 nor 12.7, referable to Section 32 of the
Contract Act, will apply so as to enable the grant of
compensatory tariff to the respondents. Dr Singhvi,
however, argued that even if Clause 12 is held
inapplicable, the law laid down on frustration under
Section 56 will apply so as to give the respondents the
necessary relief on the ground of force majeure. Having
once held that Clause 12.4 applies as a result of which rise
in the price of fuel cannot be regarded as a force majeure
event contractually, it is difficult to appreciate a
submission that in the alternative Section 56 will apply. As
has been held in particular, in Satyabrata Ghose case
[Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR
310 : (1953) 2 SCC 437 : AIR 1954 SC 44], when a
contract contains a force majeure clause which on
construction by the Court is held attracted to the facts of
the case, Section 56 can have no application. On this short
ground, this alternative submission stands disposed of.”
(Emphasis added)
145. An analysis of Section 56 of Indian Contract Act as also the
217
SA 251.2022.doc 29.12
above decisions of the Supreme Court in the cases of Satyabrata
Ghose (supra) and Energy Watchdog (supra) lay down following
principles :
i. Something which is impossible inherently or by its very
nature, and no one can obviously be directed to perform
such an act.
ii. The second paragraph enunciates the law relating to
discharge of contract by reason of supervening impossibility
or illegality of the act agreed to be done.
iii. This much is clear that the word “impossible” has not
been used here in the sense of physical or literal
impossibility. The performance of an act may not be
literally impossible but it may be impracticable and useless
from the point of view of the object and purpose which the
parties had in view; and if an untoward event or change of
circumstances totally upsets the very foundation upon
which the parties rested their bargain, it can very well be
said that the promissor finds it impossible to do the act
which he promised to do.
iv. Essential idea upon which the doctrine is based is that
of impossibility of performance of the contract; in fact
impossibility and frustration are often used as
218
SA 251.2022.doc 29.12interchangeable expressions. The changed circumstances, it
is said, make the performance of the contract impossible
and the parties are absolved from the further performance
of it as they did not promise to perform an impossibility.
v. The doctrine of frustration comes into play when a
contract becomes impossible of performance, after it is
made, on account of circumstances beyond the control of
the parties. The doctrine is a special case of impossibility
and as such comes under Section 56 of the Contract Act.
vi. The Act does not enable a party to a contract to ignore
the express covenants thereof and to claim payment of
consideration, for performance of the contract at rates
different from the stipulated rates, on a vague plea of
equity. Parties to an executable contract are often faced, in
the course of carrying it out, with a turn of events which
they did not at all anticipate, for example, a wholly
abnormal rise or fall in prices which is an unexpected
obstacle to execution. This does not in itself get rid of the
bargain they have made. It is only when a consideration of
the terms of the contract, in the light of the circumstances
existing when it was made, showed that they never agreed
to be bound in a fundamentally different situation which
219
SA 251.2022.doc 29.12had unexpectedly emerged, that the contract ceases to
bind.
vii. The performance of a contract is never discharged
merely because it may become onerous to one of the
parties.
viii. Ultimately, the Supreme Court concluded that a
contract is not frustrated merely because the
circumstances in which it was made are altered. The
courts have no general power to absolve a party from the
performance of its part of the contract merely because its
performance has become onerous on account of an
unforeseen turn of events.
ix. The contract had become more onerous to perform, it
was not fundamentally altered. Where performance is
otherwise possible, it is clear that a mere rise in freight
price would not allow one of the parties to say that the
contract was discharged by impossibility of performance.
x. A force majeure clause will not normally be construed
to apply where the contract provides for an alternative
mode of performance. It is clear that a more onerous
method of performance by itself would not amount to a
frustrating event.
220
SA 251.2022.doc 29.12
xi. The application of the doctrine of frustration requires
a multi-factorial approach. Among the factors which have
to be considered are the terms of the contract itself, its
matrix or context, the parties’ knowledge, expectations,
assumptions and contemplations, in particular as to risk,
as at the time of the contract, at any rate so far as these
can be ascribed mutually and objectively, and then the
nature of the supervening event, and the parties’
reasonable and objectively ascertainable calculations as to
the possibilities of future performance in the new
circumstances.
xii. The doctrine is not to be lightly invoked; that mere
incidence of expense or delay or onerousness is not
sufficient; and that there has to be as it were a break in
identity between the contract as provided for and
contemplated and its performance in the new
circumstances.
146. Thus, it is clear that the doctrine of frustration comes into
play when a contract becomes impossible of performance, after it is
made, on account of circumstances beyond the control of the parties.
The doctrine is a special case of impossibility and as such comes
under Section 56 of the Contract Act. However, the performance of a
221
SA 251.2022.doc 29.12
contract is never discharged merely because it may become onerous
to one of the parties. It is settled legal position that this doctrine is not
to be lightly invoked; that mere incidence of expense or delay or
onerousness is not sufficient; and that there has to be as it were a
break in identity between the contract as provided for and
contemplated and its performance in the new circumstances.
147. Thus, on the touchstone of above principles it is necessary
to consider the present case.
148. As noted herein above the Appellants have relied on
opinion dated 3rd April 2019 of Mahimtura Consultants Private
Limited. The said opinion inter alia states that the measures to be
employed for retrofitting will require 10 to 12 months and the
balance building can only be constructed after retrofitting. It is further
stated that the work of retrofitting will have to be undertaken by a
specialized contractor and will require prohibitive costs. These
reasons inter alia set out in said opinion dated 3rd April 2019 clearly
shows that case for invocation of Section 56 of the Contract Act is not
made out. As per the settled legal position the performance of a
contract is never discharged merely because it may become onerous
to one of the parties and that this doctrine is not to be lightly invoked;
that mere incidence of expense or delay or onerousness is not
sufficient; and that there has to be as it were a break in identity
222
SA 251.2022.doc 29.12
between the contract as provided for and contemplated and its
performance in the new circumstances. It is required to be noted that
the other two towers namely B1 and B2 in the same layout were
constructed after retrofitting. The said towers are also situated in
same circumstances. It is surprising and shocking that the Appellants
has not invoked the doctrine of frustration with respect to those
towers. In fact, there is substance in the contention raised on behalf of
the Respondents that the said doctrine of frustration is invoked to
garner more benefit and double profit and consumption of complete
layout benefit under DCPR, 2034. It is significant to note that earlier
only 22 floors were to be constructed and now the permission has
been granted to construct 48 floors. Thus, it is very clear that the
Appellant has invoked this clause of frustration just to deprive the
Respondents in Second Appeal No. 253 of 2022 and Second Appeal
No.257 of 2022, their statutory rights and to garner more benefit.
149. It is further significant to note that the Appellants have
obtained permission for demolition of tower C and construction of a
new tower of 48 floors from Municipal Corporation of Greater
Mumbai by giving a declaration dated 19 th February 2019, inter alia
stating as follows:
“9. We further state and declare that the rights of the
existing/ current purchasers of Apartments/ flats/
premises in Building No.C will be safeguarded.”
223
SA 251.2022.doc 29.12
150. It is shocking to note that the Appellants obtained the
permission from MCGM for demolition of Building No. C by playing
fraud as false undertaking has been given stating that the Appellants
would protect and safeguard the rights of the flat purchasers in
Building No.C and after getting approval for construction of 48 floors
and after demolishing Building No.C now the Appellants have
malafidely invoked doctrine of frustration. Thus, these two Second
Appeals namely Second Appeal No. 253 of 2022 and Second Appeal
No. 257 of 2022, are required to be dismissed with exemplary costs of
Rs.1,00,000/- each to be paid by the Appellants to the respective
Respondents.
151. Thus, for the above reasons there is no substance in the
Seventh Substantial Question of Law.
152. Hereinafter, the substantial question of law no.7 framed by
order dated 24th December 2024 shall be taken up for consideration.
The same is now numbered as the Eighth substantial question of law.
EIGHTH SUBSTANTIAL QUESTION OF LAW :
Whether the impugned Judgment and Order is perverse and
unreasoned?
153. At the outset it is required to be noted that while making
oral submissions although the same were advanced in great detail
with respect to all other substantial questions of law, neither of the
parties have advanced any submissions with respect to this substantial
224
SA 251.2022.doc 29.12
question of law. However, in the written arguments certain
submissions with respect to this substantial question of law are
incorporated.
SUBMISSIONS OF THE APPELLANTS CONCERNING EIGHTH
SUBSTANTIAL QUESTION OF LAW:-
154. In the written submissions of the Appellants following
contentions are raised:
i. It is submitted that the impugned Order is unreasoned. It is
evident from the record that elaborate arguments and submissions
were made by the Appellant before the Hon’ble Revenue Tribunal. It is
the duty of every quasi -judicial forum to pass a speaking order which
entails recording all submissions of the Parties, framing questions for
determination and delivering the final decision after dealing with the
all the arguments and submissions made before it.
ii. A perusal of the Impugned Order, including paragraphs 13 to 17
thereof shows that the Hon’ble Revenue Tribunal has not dealt with
all of the arguments of the Appellant, and further, given no reasons
whatsoever in support of its conclusions. This makes the Impugned
Order non – speaking.
iii. Every litigant has the right to know why it’s submissions and
arguments before the Court have been rejected so that it can lay the
foundation of challenge to such order. However, from the Impugned
225
SA 251.2022.doc 29.12Order, it can be seen that all of the arguments and submissions of the
Appellant have not been dealt with by the Revenue Tribunal.
iv. It is well settled that giving of reasons in support of conclusions
and findings is an indispensable part of compliance with the
principles of natural justice.
v. The Appellants have relied on following decisions of the Supreme
Court in support of above contentions:
2. Kranti Associates (P) Ltd. vs. Masood Ahmed Khan52
SUBMISSIONS OF THE RESPONDENTS CONCERNING EIGHTH
SUBSTANTIAL QUESTION OF LAW:-
155. In the written submissions of the Respondents following
contentions are raised:
i. It is respectfully submitted that the impugned oral judgment
dated 01/11/2018 passed by the MahaREAT was well reasoned, based
on a complete appreciation of facts and law, and requires no
interference. The Appellants’ failure to deliver possession within the
stipulated time, despite repeated assurances, letters, and financial
demands between 2005-2008, constitutes a clear breach of statutory
duties under RERA. Even after the expiry of the extended 18 months
granted under the order, possession has not been handed over, and
51 (2010) 13 SCC 427
52 (2010) 9 SCC 496226
SA 251.2022.doc 29.12the allottees continue to suffer grave hardship.
ii. Under Section 18(1) and its proviso, the Respondents, who chose
not to withdraw from the project, are unconditionally entitled to
interest for every month of delay until possession is actually delivered.
The Hon’ble Supreme Court in Imperia Structures Ltd. (supra) and
Newtech (supra) has affirmed that such right is absolute and not
contingent upon contractual clauses or force majeure claims. The
Appellants’ reliance on environmental litigation or subsequent
demolition of Building C is misconceived, as performance remained
legally and physically possible, and their conduct in altering
sanctioned plans, seeking escalation charges, and demolishing
structures to exploit DCPR 2034 benefits demonstrates mala fides
rather than impossibility.
iii. In view of the aforesaid settled legal position, statutory mandate,
and binding judicial precedents, it is humbly prayed that the question
of law No.7 be decided in favour of the respondents holding that the
impugned judgment and order is effective, valid, subsisting and
binding, and cannot be interfered with and the second appeals filed
by the appellant be dismissed forthwith exemplary cost, and the
Respondents be granted the reliefs awarded by the MahaREAT,
together with continuing interest till actual possession is delivered.
iv. The Respondents have also raised various contentions regarding
227
SA 251.2022.doc 29.12
other substantial questions of law while dealing with this substantial
question of law. The same are not relevant.
REASONING CONCERNING EIGHTH SUBSTANTIAL
QUESTION OF LAW:-
156. As already noted herein above, no oral submissions were
raised with respect to this substantial question of law. In fact the
written submissions of the Appellants except general contentions, do
not make any reference to the particulars i.e. the point which is
argued and not considered by the learned designated Appellate
Tribunal.
157. As already noted herein above, the learned designated
Appellate Tribunal has passed the impugned order by giving detailed
reasons. In fact, while considering various aspects as set out in
paragraph No.13 to 17, which are already set out in earlier part of
this judgment, the learned designated Appellate Tribunal has granted
interest to the allottees w.e.f. 1st February 2014, although the
possession date as per the agreements executed with allottees were of
the year 2008-2010.
158. It is correct that Supreme Court in various decisions has
held that giving of reasons in support of conclusions and findings is
an indispensable part of compliance with the principles of natural
justice. However, in this particular case, detailed reasons are given by
228
SA 251.2022.doc 29.12
the learned designated Appellate Tribunal. Apart from that, no
particulars are pointed out to this Court with respect to this aspect.
159. Thus, there is no substance in the contentions raised by the
Appellants.
160. Thus, for the above reasons there is no substance in the
Eighth Substantial Question of Law.
FINAL ORDER:
161. For the above reasons, there is no substance in any of the
Substantial Questions of Law raised by the Appellants.
162. Accordingly, all the Second Appeals are dismissed with
costs.
163. Second Appeal No.251 of 2022, Second Appeal No.254 of
2022, Second Appeal No.255 of 2022, Second Appeal No.256 of
2022, Second Appeal No.258 of 2022, Second Appeal No.259 of
2022, Second Appeal No.260 of 2022 and Second Appeal No.261 of
2022 are dismissed with costs of Rs.10,000/- in each of the Second
Appeals to be paid to the respective Respondents, within a period of
four weeks from today.
164. Second Appeal No. 253 of 2022 and Second Appeal No.
257 of 2022 are dismissed with a cost of Rs.1,00,000/-, to be paid to
the respective Respondents, within a period of four weeks from today.
165. In view of the dismissal of the Second Appeals, nothing
229
SA 251.2022.doc 29.12
survives in the Civil Applications/Interim Applications and the same
are also disposed of.
166. After pronouncement of this judgment, Mr. Kamat, learned
Senior Advocate seeks stay of this judgment and order and
continuation of the interim order dated 4 th December 2018 which was
operating in these Second Appeals. However, the position on record
shows that the Agreement with respective Appellants, i.e., flat
purchasers are of the year 2006-2007. After a period of 20 years,
possession is not handed over to the flat purchasers. As far as Second
Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022 are
concerned, this Court, on the basis of undertaking submitted by the
Appellants, has recorded that the permission from the MCGM for
demolition of Tower C has been obtained by misrepresenting the
MCGM and by playing fraud on MCGM by representing that the flat
purchasers’ interest would be safeguarded and thereafter now
belatedly for the first time at the stage of Second Appeal, contention
is raised regarding frustration of the contract.
167. Accordingly, no case is made out for grant of stay of this
order.
[MADHAV J. JAMDAR, J.]
230
