2024 (11) TMI 787 - HC - Indian Laws

Appellate Tribunal's interest order set aside for entertaining appeal without proper clarification from Regulatory Authority

Bombay HC set aside the Appellate Tribunal's order that granted interest to allottees on payments from 2018 until possession handover. The court found ... Levy of interest to the allottees on the amount paid by them at the rate of SBI’s Highest Marginal Costs of Lending Rate (MCLR) plus 2% with effect from 1 January 2018 till the date of handing over possession of subject apartments to the Respondents. Petitioner is also directed to pay costs of Rs. 10,000/- to the Respondents - whether Respondents could have filed an Appeal challenging the order of the Regulatory Authority, which according to the Appellant, is obtained on concession? - permissibility for the Appellate Tribunal to grant relief over and above the alleged concession made by Respondents before the Regulatory Authority. HELD THAT:- Respondents clearly made a concession before the Regulatory Authority that they were willing to accept interest only on amounts paid after implementation of the RERA. However, before the Appellate Authority, Respondents insisted that no such concession was applied by them before the Regulatory Authority. If this was the position, proper course of action for the Respondents was to invite the attention of the Regulatory Authority by filing an application that their concession was erroneously recorded. However, admittedly no such application was filed by the Respondents. Instead, they were advised to challenge the order of the Regulatory Authority by filing the Appeal under section 44 of the Act before the Appellate Tribunal. The Appeal was apparently filed on 27 January 2021 before the Appellate Tribunal. During gap between 25 November 2020 and 27 January 2021, the Respondents did not complain before the Regulatory Authority that their concession was erroneously recorded in paragraph 9 of the order. Thus Respondents neither filed an application before the Regulatory Authority complaining about erroneous recording of the concession in paragraph 9 of the order nor they did raise any specific ground in the Appeal about erroneous recording of such concession. Thus, the Appellate Authority did not have before it any pleading to the effect that the order was not obtained by Respondents by consent. It therefore really became questionable as to how the Appellate Authority could have entertained the Appeal filed by the Respondents. It is only when the Appeal was argued before the Appellate Tribunal, that Respondents sought to retract from the concession made before the Regulatory Authority. The first reason recorded by the Appellate Tribunal for believing that Respondents did not make any concession is the absence of any whisper in para 6 of the Order about project facing any financial crisis. Since the plea of the Advocate of the Appellant about project facing financial crisis is not noticed by the Appellate Tribunal in paragraph 6 of the Regulatory Authority’s order, it has held that the assumption on the part of the Regulatory Authority about liquidity crisis was erroneous. The second reason recorded by the Appellate Tribunal for believing the plea of Respondents about not making concession is nonaudibility of Appellant’s advocate during the course of hearing due to technical glitches and she making her submissions subsequently vide email dated 24 November 2020. The Appellate Tribunal has therefore assumed that at the time when the Appeal was actually heard, the advocate of Appellant was not even audible and there was no occasion for the Authority to know any plea of project facing liquidity crisis. Appellate Tribunal has therefore held that since Regulatory Authority itself was not appraised about any liquidity crisis, there was no occasion for it to give any explanation to Respondents - even the second reason of the recording by the Appellate Authority for believing the plea of the Respondents about not making concession before the Regulatory Authority is totally perverse. The judgment and order passed by the Appellate Authority suffers from palpable error. It has committed a jurisdictional error in entertaining the Appeal filed by the Respondents without they first moving Regulatory Authority to seek a clarification in respect of the concession recorded in paragraph 9 of the order. The second error committed by the Appellate Tribunal is in entertaining oral plea of not making concession before Regulatory Authority in absence of the pleading in the Appeal Memo. The judgment and order passed by the Appellate Tribunal is indefensible and is liable to be set aside. The Appeal accordingly succeeds. Issues Involved:1. Whether a litigant who obtains orders by making a concession before the RERA Authority is permitted to seek relief over and above the concession so made in an appeal filed before the RERA Appellate Authority.2. In the absence of a specific ground being raised in the Appeal Memo about not having made a concession before the RERA Appellate Authority, whether the RERA Appellate Tribunal is justified in holding that the Respondents did not make such a concession.Issue-wise Detailed Analysis:1. Concession and Relief Beyond Concession:The primary issue revolves around whether the Respondents, having made a concession before the Regulatory Authority, could seek additional relief in their appeal to the Appellate Tribunal. The Regulatory Authority recorded that the Respondents initially sought interest on the entire amount collected without executing and registering agreements for sale. However, after being informed about the project's liquidity crisis, they purportedly agreed to interest only on amounts collected post-RERA implementation. The Appellate Tribunal, however, entertained the Respondents' appeal for interest on the entire amount, which the High Court found improper. The High Court emphasized that the Respondents should have first sought a review or clarification from the Regulatory Authority if they believed the concession was erroneously recorded. The judgment underscores that a concession recorded by a judicial authority is considered conclusive unless corrected by the same authority, not by an appellate body.2. Absence of Specific Grounds in Appeal Memo:The second issue addresses whether the Appellate Tribunal was justified in considering the Respondents' oral plea that no concession was made, despite the absence of such a claim in their Appeal Memo. The High Court noted that the Appeal Memo lacked any assertion that the concession was erroneously recorded. The Appellate Tribunal's decision to entertain this oral plea without supporting pleadings was deemed a jurisdictional error. The High Court cited established legal principles that judicial records are conclusive and should not be contradicted by oral statements or affidavits unless corrected by the authority that made the record. The High Court concluded that the Appellate Tribunal erred in accepting the Respondents' plea without a formal application or specific grounds in the Appeal Memo.Conclusion:The High Court set aside the Appellate Tribunal's judgment, reinstating the Regulatory Authority's order. It emphasized the importance of procedural propriety and the finality of judicial records, reiterating that any perceived errors in recording concessions should be addressed through appropriate channels, not directly in appellate proceedings. The decision reinforces the principle that concessions made and recorded in judicial proceedings hold significant weight and cannot be casually disputed in appeals without formal procedural steps.