Court upholds validity of deposit requirement in Real Estate Act to protect allottees' interests.

The court upheld the validity of Sub-section (5) of Section 43 of the Real Estate (Regulation and Development) Act, 2016, which requires the deposit of the total amount of compensation before entertaining an appeal. The court found that this provision is designed to protect the interests of allottees and prevent exploitation by promoters. It held that the pre-condition is not onerous and does not render the right of appeal illusory. The court declared the provision as valid, stating that it does not violate the petitioner's fundamental rights. The writ petition was disposed of in favor of upholding the provision.

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Issues Involved:
1. Validity of Sub-section (5) of Section 43 of the Real Estate (Regulation and Development) Act, 2016.
2. Whether the pre-condition of depositing the total amount of compensation before entertaining an appeal is onerous.
3. Violation of Articles 14 and 19(1)(g) of the Constitution of India.
4. First opportunity to contest the matter on merits.
5. Discretionary power of the Appellate Tribunal to waive the pre-deposit requirement.

Issue-wise Detailed Analysis:

1. Validity of Sub-section (5) of Section 43 of the Real Estate (Regulation and Development) Act, 2016:
The petitioner challenged the validity of Sub-section (5) of Section 43, arguing that it imposes an onerous condition by requiring the deposit of the total amount of compensation before an appeal can be entertained. The court examined the language of the provision, which states, "it shall not be entertained" without the promoter first depositing the amount. The court found that this phrase clearly indicates that the appeal cannot be entertained or even presented without fulfilling this pre-condition. The court upheld the provision, stating that it is designed to protect the interests of allottees and prevent exploitation by promoters.

2. Whether the pre-condition of depositing the total amount of compensation before entertaining an appeal is onerous:
The petitioner argued that the pre-condition makes the right of appeal illusory and burdensome, especially if multiple complaints result in awards of compensation. The court noted that the provision aims to secure the investments of allottees and compensate them for any default by the promoter. The court found that the provision is not unreasonable, as it ensures that the allottee's investment is protected and that promoters are deterred from withholding money unfairly. The court held that the provision is a reasonable restriction and does not render the right of appeal illusory.

3. Violation of Articles 14 and 19(1)(g) of the Constitution of India:
The petitioner contended that the pre-condition violates Article 14 (right to equality) and Article 19(1)(g) (right to practice any profession) of the Constitution. The court referred to previous judgments, including Shyam Kishore vs. Municipal Corporation of Delhi, which held that the legislature can impose reasonable conditions on the right of appeal. The court found that the provision does not violate Article 14, as it applies equally to all promoters, and does not violate Article 19(1)(g), as it is a reasonable restriction to protect the interests of allottees.

4. First opportunity to contest the matter on merits:
The petitioner argued that the right of appeal under Section 71 is the first opportunity to contest the matter on merits, as the Adjudicatory Officer has limited powers and is appointed by the State Government. The court found that the Adjudicatory Officer, being of the rank of a District Judge, has ample powers to adjudicate the matter, and the appeal provision is the second stage of adjudication. Therefore, the court held that the appeal provision does not violate the petitioner's fundamental rights.

5. Discretionary power of the Appellate Tribunal to waive the pre-deposit requirement:
The petitioner argued that the absence of a discretionary power for the Appellate Tribunal to waive the pre-deposit requirement makes the provision unreasonable. The court referred to the judgment in M/s. Tecnimont Pvt. Ltd. vs. State of Punjab, which held that in cases of extreme hardship, a writ petition could be an appropriate remedy. The court noted that the petitioner had not demonstrated any financial distress or indigency to justify a waiver of the pre-deposit requirement. The court held that the absence of a discretionary power does not render the provision unreasonable, as the purpose is to protect the interests of allottees.

Conclusion:
The court held that the provision is intra vires and does not violate the petitioner's fundamental rights. The court declared that the appellate forum is not illusory, and the condition of pre-deposit is not onerous. The writ petition was disposed of, and the provision was upheld as valid.

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