TaxTMI 
TaxTMI 
2021 (12) TMI 892
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....han, Adv., Mr. Anupam Chaudhary, Adv., Ms. Savita Devi, Adv., Mr. Prateek K Chadha, AOR, Ms. Vanshaja Shukla, AOR, Mr. Shekhar Kumar, AOR, Mr. Tarun Gupta, AOR For the Respondent : Ms. Madhavi Divan, ASG, Mr. Devadatt Kamat, Sr. Adv., Mr. Pai Amit, AOR, Ms. Komal Mundhra, Adv., Mr. Saurabh Agrawal, Adv., Mr. Shantanu Singh, Adv., Mr. Rajesh Inamdar, Adv., Mr. Aniket Bhattacharya, Adv., Ms. Pankhuri Bhardwaj, Adv., Mr. Sahil Monga, Adv., Ms. Aishani Narain, Adv., M/S. VKC Law Offices, AOR, Mr. Aman Gupta, AOR, Mr. Rajeev Kumar Dubey, Adv.,Mr. Ashiwan Mishra, Adv., Mr. Kamlendra Mishra, AOR, Mr. Sumit R. Sharma, AOR, Ms. Diksha Sharma, Adv. JUDGMENT Rastogi, J. 1. Leave granted. 2. The present batch of appeals are filed at the instance of promoter/real estate developer assailing the common issues and certain provisions of The Real Estate(Regulation and Development) Act, 2016(hereinafter being referred to as "the Act"), The Uttar Pradesh Real Estate(Regulation and Development) Rules, 2016 (hereinafter referred to as "the Rules") and the functioning of the Uttar Pradesh Real Estate Regulatory Authority (hereinafter referred to as "the Authority"), although being decided ....
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..... Over the past two decades, with the growth of population and the attraction of the people to shift towards urbanization, the demand for housing increased manifold. 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. 7. 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 home buyers in the real estate sector but the experience shows that this mechanism was inadequate to address the needs of the home buyers and promote....
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....action 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 fast­track dispute resolution mechanism. It also proposes to induct professionalism and standardization in the sector, thus paving the way for accelerated growth and investments in the long run. 11. Some of the relevant Statement of 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; (iii) to ensure compliance of the obligations cast upon the promoters, the allotees an....
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....iance to the mandate of law. In addition, any project which is approved under the Act, 2016 helps the promoter in raising funds from banks and statistics shows that buyers express their satisfaction in approved projects which is beneficial not only to the home buyers but to the promoters and real estate agents as well. 15. Chapter II of the Act relates to the registration of real estate projects. Section 3 mandates prior registration of real estate projects including ongoing projects with the Real Estate Regulatory Authority. Section 4 prescribes the ingredients of application by the promotor for registration of real estate projects. In particular, the promotor is required to state in the application under subsection 2(L)(c ) of Section 4, the timelines for completion of the project. Section 5 relates to the grant of registration by the authority and inter alia states that no application shall be rejected unless the applicant has been given an opportunity of being heard in the matter. As per Section 5(3) of the Act, the registration is coterminus with the completion of the project. Under Section 6, the authority can extend registration based on the facts of each case or the occu....
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....n 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 sub­sections (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) provi....
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....owers and functions of the authority regarding compliance of its regulations cast upon the promoters, allottee or the real estate agents and to appoint one or more persons to make an inquiry into the affairs of any promoter, allottee or the real estate agent and to pass any interim orders, if the promoter, allottee or real estate agent is failing in discharging of its functions under the Act, rules or regulations, and to issue directions from time to time to the promoter, allottee or real estate agents, if considered necessary can impose penalty or interest if failed to carry out its obligations. 28. At the same time, Chapter VIII of the Act talks about offences, penalties and adjudication. Various kinds of penalties are set out in Sections 59 to 68. Each of these provisions clearly states that the penalty thereunder is required to be determined by the authority. 29. We are concerned with Section 71 of the Act titled 'power to adjudicate' which is specific to the adjudicating officer. Subsection(1) of Section 71 opens with the words "for the purpose of adjudging compensation under Sections 12, 14, 18 and 19", the Authority has to appoint in consultation with the appropriate G....
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.... of the Constitution of India? 32. The issue concerns the retroactive application of the provisions of the Act 2016 particularly, with reference to the ongoing projects. If we take note of the objects and reasons and the scheme of the Act, it manifests that the Parliament in its wisdom after holding extensive deliberation on the subject thought it necessary to have a central legislation in the paramount interest for effective consumer protection, uniformity and standardisation of business practices and transactions in the real estate sector, to ensure greater accountability towards consumers, to overcome frauds and delays and also the higher transaction costs, and accordingly intended to balance the interests of consumers and promoters by imposing certain duties and responsibilities on both. The deliberation on the subject was going on since 2013 but finally the Act was enacted in the year 2016 with effect from 25th March, 2016. 33. Under Chapter II of the Act 2016, registration of real estate projects became mandatory and to make the statute applicable and to take its place under sub­Section (1) of Section 3, it was made statutory that without registering the real estate....
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....e Association for maintenance. (iii) where all development work have been completed and sale/lease deeds of sixty percent of the apartment/houses/plots have been executed. (iv) where all development works have been completed and application has been filed with the competent authority for issue of completion certificate." 36. The expression "completion certification" has been defined under Section 2(q) and "occupancy certificate" under Section 2(zf) of the Act which reads as under:­ "2(q) "completion certificate" means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws; 2(zf) "occupancy certificate" means the occupancy certificate, or such other certificate, by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;" 37. Looking to the sche....
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....implication, ex­facie and without any ambiguity, means and includes those projects which were ongoing and in cases where only issuance of completion certificate remained pending, legislature intended that even those projects have to be registered under the Act. Therefore, the ambit of Act is to bring all projects under its fold, provided that completion certificate has not been issued. The case of the appellant is based on "occupancy certificate" and not of "completion certificate". In this context, learned counsel submits that the said proviso ought to be read with Section 3(2)(b), which specifically excludes projects where completion certificate has been received prior to the commencement of the Act. Thus, those projects under Section 3(2) need not be registered under the Act and, therefore, the intent of the Act hinges on whether or not a project has received a completion certificate on the date of commencement of the Act. 41. The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible, i.e., the legislature consciously enacted a retroactive statute to en....
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....promoter and allottee, it was badly felt that such of the ongoing projects to which completion certificate has not been issued must be brought within the fold of the Act 2016 in securing the interests of allottees, promoters, real estate agents in its best possible way obviously, within the parameters of law. Merely because enactment as prayed is made retroactive in its operation, it cannot be said to be either violative of Articles 14 or 19(1)(g) of the Constitution of India. To the contrary, the Parliament indeed has the power to legislate even retrospectively to take into its fold the pre­existing contract and rights executed between the parties in the larger public interest. 46. The consequences for breach of such obligations under the Act are prospective in operation and in case ongoing project, of which completion certificate is not obtained, are not to be covered under the Act, there is every likelihood of classifications in respect of underdeveloped ongoing project and the new project to be commenced. 47. The legislative power to make the law with prospective/retrospective effect is well recognized and it would not be permissible for the appellants/promoters to sa....
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....not operate retrospectively. It operates in futuro. However, its operation is based upon the character or status that arose earlier. Characteristic or event which happened in the past or requisites which had been drawn from antecedent events. Under the amended Section 6, since the right is given by birth, that is, an antecedent event, and the provisions operate concerning claiming rights on and from the date of the Amendment Act." 51. Thus, it is clear that the statute is not retrospective merely because it affects existing rights or its retrospection because a part of the requisites for its action is drawn from a time antecedent to its passing, at the same time, retroactive statute means a statute which creates a new obligation on transactions or considerations already passed or destroys or impairs vested rights. 52. The Parliament intended to bring within the fold of the statute the ongoing real estate projects in its wide amplitude used the term "converting and existing building or a part thereof into apartments" including every kind of developmental activity either existing or upcoming in future under Section 3(1) of the Act, the intention of the legislature by necessary ....
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.... contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, at the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:" Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act." 57. Section 14 relates to adherence to sanctioned plans and project specifications by the promoter. Section 14(3) empowers the allottee to receive compensation in the event there is any structural defect or any other defect in workmanship etc. Section 14(3) reads as under: "(3) In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development....
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....phasis supplied) 59. Chapter IV deals with the rights and duties of the allottees and in particular, Section 19(4) entitles the allottees to a refund of the amount paid. Section 19(4) reads as follows:­ "(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 give possession 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." 60. Section 31 relates to the filing of complaints to the authority and reads as follows: Filing of complaints with the Authority or the adjudicating officer- (1) Any aggrieved person may file a complaint with the Authority orthe adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder, against an....
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....inquiry, he is satisfied that the person has failed to comply with the provisions of any of the sections specified in sub­section (1), he may direct to pay such compensation or interest, as the case any be, as he thinks fit in accordance with the provisions of any of those sections. 62. The broad factors to be considered while adjudging compensation have been provided under Section 72 which reads as under:­ "72. While adjudging the quantum of compensation or interest, as the case may be, under section 71, the adjudicating officer shall have due regard to the following factors, namely:- (a) the amount of disproportionate gain or unfairadvantage, wherever quantifiable, made as a result of the default; (b) the amount of loss caused as a result of thedefault; (c) the repetitive nature of the default; (d) such other factors which the adjudicating officerconsiders necessary to the case in furtherance of justice." 63. The Uttar Pradesh Real Estate Regulatory Authority in exercise of its power under Section 85 of the Act 2016 has framed its regulations on 27th February, 2019 called as Uttar Pradesh Real Estate Regulatory Authority(....
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....ows:­ " 33(1) Any aggrieved person may file a complaint with the regulatory authority for any violation under the Act or the rules and regulations made thereunder, save as those provided to be adjudicated by the adjudicating officer, in Form 'M' which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank in favour of regulatory authority and payable at the main branch of that bank at the station where the seat of the said regulatory authority is situated. Explanation:­ For the purpose of this sub­rule "person" shall include the association of allottees or any voluntary consumer association registered under any law or the time being in force. 34(1) Any aggrieved person may file a complaint with the adjudicating officer for compensation under Sections 12, 14, 18 and 19 in Form N which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank in favour of regulatory authority and payable at the main branch of that bank at the station where the rest of the said regulatory authority is situated." (emphasis supplied) 67. Rule 33(2....
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....ts that the Act provides distinct remedies, i.e., 'return of amount/investment' on the one hand and 'compensation' on the other, to be determined separately. According to her, the right to refund on demand is a statutory right, fundamentally, contextually and conceptually distinct from the right to receive compensation. While the right to refund emanates from the Legislature's recognition of the fact that homebuyers are "out of pocket" financial creditors, the right to compensation seeks to make amends for injury or loss. 72. Thus, refund and compensation are two distinct rights under the Act and cannot be conflated. The manner in which the two are to be determined would require a different process and involve different considerations. According to her, the determination of compensation involves a full­fledged adjudicatory process which is more complex than that involved in determining refund. To do so, it would tantamount to regressing into the very malaise that the legislature intended to liberate the allottees­homebuyers. The result of conflating the rights and/or relegating the allottees to the adjudicating officer would amount to a compromise of the timeliness of th....
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....diction of the adjudicating officer to adjudge compensation under Sections 12, 14, 18 and 19 after holding enquiry under Section 71(3) of the Act keeping in view the broad contours referred to under Section 72 of the Act. 76. The submission made by learned counsel for the appellants that the proviso under Section 71(1) empowers the adjudicating officer to examine the complaints made under Sections 12, 14, 18 and 19 pending before the Consumer Disputes Redressal Forum/Commission is in different context and it was one time mechanism to provide a window to the consumers whose composite claims are pending before the Consumer Forum/Commission to avail the benevolent provision of the Act 2016 for the reason that under the Consumer Protection Act, there is no distinction as to whether the complaint is for refund of the amount or for compensation as defined under Section 71(1) of the Act, but after the Act 2016 has come into force, if any person aggrieved wants to make complaint for refund against the promotor or real estate agent other than compensation, it is to be lodged to the regulatory authority and for adjudging compensation to the adjudicating officer, and the delineation has be....
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....able 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 supplied) 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 pre­deposit 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 m....
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....ore the regulatory authority. The submission may not hold good for the reason that there is a complete delineation of the jurisdiction vested with the regulatory authority and the adjudicating officer. If there is any breach or violation of the provisions of Sections 12, 14, 18 and 19 of the Act by the promoter, such a complaint straightaway has to be filed before the regulatory authority. What is being referable to the adjudicating officer is for adjudging compensation, as reflected under Section 71 of the Act and accordingly rules and regulations have been framed by the authority for streamlining the complaints which are made by the aggrieved person either on account of violation of the provisions of Sections 12, 14, 18 and 19 or for adjudging compensation and there appears no question of any inconsistency being made, in the given circumstances, either by the regulatory authority or the adjudicating officer. 83. So far as the single complaint is filed seeking a combination of reliefs, it is suffice to say, that after the rules have been framed, the aggrieved person has to file complaint in a separate format. If there is a violation of the provisions of Sections 12, 14, 18 and ....
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....ading of Section 71 read with Section 72 of the Act. If the adjudication under Sections 12, 14, 18 and 19 other than compensation as envisaged, if extended to the adjudicating officer as prayed that, in our view, may intend to expand the ambit and scope of the powers and functions of the adjudicating officer under Section 71 and that would be against the mandate of the Act 2016. Question no. 3: Whether Section 81 of the Act authorizes the authority to delegate its powers to a single member of the authority to hear complaints instituted under Section 31 of the Act? 87. It is the specific stand of the respondent Authority of the State of Uttar Pradesh that the power has been delegated under Section 81 to the single member of the authority only for hearing complaints under Section 31 of the Act. To meet out the exigency, the authority in its meeting held on 14th August 2018, had earlier decided to delegate the hearing of complaints to the benches comprising of two members each but later looking into the volume of complaints which were filed by the home buyers which rose to about 36,826 complaints, the authority in its later meeting held on 5th December, 2018 empowered the single....
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....judicating officer for any violation or breach or contravention to the provisions of the Act or the rules and regulations made thereunder and this being a quasi­judicial power to be exercised by the authority could not be delegated to a single member of the authority under the guise of Section 81 of the Act, that apart, there are certain provisions where authority alone holds power to initiate action or make inquiries like Sections 35(1), 35(2), 36 or 38, the powers are exclusively exercised by the authority and the tests for determining whether an action is quasi­judicial or not are laid down in Province of Bombay Vs. Kushaldas S Advani and Others 1950 SCR 621 which has been consistently followed by the Constitution Bench in its decision in Shivji Nathubhai Vs. Union of India and Others 1960(2) SCR 775; Harinagar Sugar Mills Limited Vs. Shyam Sunder Jhunjhunwala and Others 1962(2) SCR 339. 92. Learned counsel further submits that according to him, the powers which have been exercised by the authority under Sections 12, 14, 18 and 19 of the Act have the trappings of the judicial function which in no manner can be delegated without being expressly bestowed. Placing relian....
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....or functions of the authority under Sections 32 or 33 have been delegated to a single member of the authority. 97. Learned counsel further submits that the question is not whether the delegation per se to a single member is bad, but the question is whether the power to hear complaints in reference to Sections 12,14,18 and 19 delegated to a single member is permissible under the law. It may be noticed that the authority has been vested with several other powers and functions under the Act, which the authority has consciously not delegated to a single member. 98. Learned counsel further submits that pursuant to the delegation of power under Section 81 by the special order dated 5th December, 2018 read with Regulation 24, a single member has been authorized by the authority to hear the matters related to refund of the amount under Section 31 of the Act. 99. Learned counsel further submits that almost in a pari materia scheme, Section 29­A of the SEBI Act gives the power to delegate and Section 19 of the SEBI Act empowers the board to delegate its power to any member of the Board has been examined by this Court in Saurashtra Kutch Stock Exchange Ltd. Vs. Securities and Exc....
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....'application' and there is no reference to any 'complaints' as indicated in Section 31 of the Act. 102. To examine the scheme of the Act it may be relevant to take note of certain provisions add infra:­ "21. The Authority shall consist of a Chairperson and not less than two whole time Members to be appointed by the appropriate Government. 29. (1) The Authority shall meet at such places and times, and shall follow such rules of procedure in regard to the transaction of business at its meetings, (including quorum at such meetings), as may be specified by the regulations made by the Authority. (2) If the Chairperson for any reason, is unable to attend a meetingof the Authority, any other Member chosen by the Members present amongst themselves at the meeting, shall preside at the meeting. (3) All questions which come up before any meeting of theAuthority shall be decided by a majority of votes by the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the person presiding shall have a second or casting vote. (4) The questions which come up before the Authority shall bedealt with as ....
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....e authority is mandated to discharge under the Act. It may be noticed that Sections 32 and 33 are in the nature of policy/regulatory directions which the authority is mandated to be discharged indisputably have to be undertaken by the authority while functioning as a whole body under Section 29 of the Act. 106. To add it further, Section 29(3) and (4) of the Act talks about the questions before the authority which are to be disposed of within 60 days on receiving the applications. It may be noticed that there is no reference to any complaint referred to under Section 31 of the Act. To buttress it further, Section 29 and Section 81 of the Act are not in derogation to each other. To the contrary, both operate in different fields. Section 29 deals with the meetings of the authority to be held for taking policy/regulatory decisions in the interest of the stake holders and does not envisage in its fold quasijudicial functions which the Act casts upon the authority. The legislative intention as reflected from Section 29 is a recognition of the rationale that policy matters ought to be considered and decided by the entire strength of the authority so that the policy decisions reflect t....
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.... Gazette, direct that the powers (except the power under Section 30) exercisable by it under any provision of this Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the order, be exercisable also by the Securities and Exchange Board of India or Reserve Bank of India constituted under Section 3 of the Reserve Bank of India Act, 1934 (2 of 1934).' Notification dated 13­9­1994 issued by the Central Government reads as under: 'In exercise of powers conferred by Section 29­A of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Central Government hereby directs that the powers exercisable by it under Section 3, sub­sections (1), (2), (3) and (4) of Section 4, Section 5, sub­section (2) of Section 7­A, Section 13, sub­section (2) of Section 18, Section 22 and sub­section (2) of Section 28 of the Act shall also be exercisable by the Securities and Exchange Board of India.' Section 19 of the SEBI Act, 1992 reads as under: '19. Delegation.-The Board may, by general or special order in writing delegate to any member, officer of the Board or any other person s....
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.... if being exercised by a single member cannot be said to be dehors the provisions of the Act. 111. In Heinz India Private Limited and Another(supra), the revisional powers were conferred upon the State Agricultural Market Board under Section 32 of the state law to examine the orders passed by the market committee. Section 33 thereof empowered the Board to delegate its powers to the Director. In the facts of the case, an objection was taken to the exercise of revisional powers not by the Director himself but by some officer lower in the hierarchy. This Court, while taking note of the definition of 'Director' as provided in Section 2(h) to include "any other officer authorized by the Director to perform all or any of his functions under this Act" held as under:­ "34. Now, it is true that the stakes involved in the present batch of cases are substantial and those called upon to satisfy the demands raised against them would like their cases to be heard by a senior officer or a committee of officers to be nominated by the Board. But in the absence of any data as to the number of cases that arise for consideration involving a challenge to the demands raised by the Market ....
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....ly to policy matters and cannot be read in derogation to Section 81 of the Act and the interpretation as argued by learned counsel for the promoters if to be accepted, the very mandate of Section 81 itself will become otiose and nugatory. 115. It is a well­established principle of interpretation of law that the court should read the section in literal sense and cannot rewrite it to suit its convenience; nor does any canon of construction permit the court to read the section in such a manner as to render it to some extent otiose. Section 81 of the Act positively empowers the authority to delegate such of its powers and functions to any member by a general or a special order with an exception to make regulations under Section 85 of the Act. As a consequence, except the power to make regulations under Section 85 of the Act, other powers and functions of the authority, by a general or special order, if delegated to a single member of the authority is indeed within the fold of Section 81 of the Act. 116. The further submission made by learned counsel for the promoters that Section 81 of the Act empowers even delegation to any officer of the authority or any other person, it is....
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....;builtmechanism and any order passed on a complaint by the authority under Section 31 is appealable before the tribunal under Section 43(5) and further in appeal to the High Court under Section 58 of the Act on one or more ground specified under Section 100 of the Code of Civil Procedure, 1908, if any manifest error is left by the authority either in computation or in the amount refundable to the allottee/home buyer, is open to be considered at the appellate stage on the complaint made by the person aggrieved. 120. In view of the remedial mechanism provided under the scheme of the Act 2016, in our considered view, the power of delegation under Section 81 of the Act by the authority to one of its member for deciding applications/complaints under Section 31 of the Act is not only well defined but expressly permissible and that cannot be said to be dehors the mandate of law. Question no. 4:­ Whether the condition of pre­deposit under proviso to Section 43(5) of the Act for entertaining substantive right of appeal is sustainable in law? 121. Before we examine the challenge to the proviso to Section 43(5) of the Act of making pre­deposit for entertaining an appeal b....
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....holders as defined under the provisions of the Act. 124. Learned counsel further submits that if the entire sum as has been computed either by the Authority or adjudicating officer, is to be deposited including 30 per cent of the penalty in the first place, the remedy of appeal provided by one hand is being taken away by the other since the promoter is financially under distress and incapable to deposit the full computed amount by the authority/adjudicating officer. The right of appreciation of his defence at appellate stage which is made available to him under the statute became nugatory because of the onerous mandatory requirement of pre­deposit in entertaining the appeal only on the promoter who intends to prefer under Section 43(5) of the Act which according to him is in the given facts and circumstances of this case is unconstitutional and violative of Article 14 of the Constitution of India. 125. The submission in the first blush appears to be attractive but is not sustainable in law for the reason that a perusal of scheme of the Act makes it clear that the limited rights and duties are provided on the shoulders of the allottees under Section 19 of the Act at a give....
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....feels that there is some manifest material irregularity being committed or his defence has not been properly appreciated at the first stage, would prefer an appeal for re­appraisal of the evidence on record provided substantive compliance of the condition of pre­deposit is made over, the rights of the parties inter se could easily be saved for adjudication at the appellate stage. 129. There are multiple statutes which provide a condition of predeposit of a stipulated statutory amount to be deposited before an appeal is entertained by an appellate forum/tribunal for reappraisal of facts and law at the appellate stage and it has been examined by this Court as well. Proviso to Section 18 of SARFAESI Act, 2002 of the Act which provides pre­deposit is as follows:­ "18. Appeal to Appellate Tribunal ....... Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less: Provided also that the Appellate Tribunal may, for the reasons to ....
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....stering officer under the proviso to Section 47­A alleging that the determination made is arbitrary and/or based on extraneous considerations, and in that case it is always open to the High Court, if it is satisfied that the allegation is correct, to set aside such exorbitant demand under the proviso to Section 47­A of the Stamp Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution vide Maneka Gandhi v. Union of India [(1978) 1 SCC 248] . Hence, the party is not remediless in this situation." 132. At the same time, Section 19 of the Consumer Protection Act, 1986 prescribes a condition for pre­deposit which provides that an appeal shall not be entertained unless 50 per cent of the amount awarded by the State Commission or Rs. 35,000/­ whichever is less is deposited before the National Consumer Disputes Redressal Commission(NCDRC). This Court while placing reliance on State of Haryana Vs. Maruti Udyog Ltd. and Others 2000(7) SCC 348 ; in Shreenath Corporation and Others Vs. Consumer Education and Research Society and Others 2014(8) SCC 657 held that such a condition is imposed to avoid frivolous appeals....
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....ro and Small Enterprises Facilitation Council or by any institution or center providing alternate dispute resolution services to which a reference is made by the Council. Section 19 reads as follows:­ "19. Application for setting aside decree, award or order.-No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any court unless the appellant (not being a supplier) has deposited with it seventy­five per cent. of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such court: Provided that pending disposal of the application to set aside the decree, award or order, the court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case, subject to such conditions as it deems necessary to impose." 134. Similarly, the condition of pre­deposit has been examined recently by this Court in Tecnimont Pvt. Ltd. (Formerly Known As Tecn....
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.... to be recovered as arrears of land revenue, and reads as under:­ 40. Recovery of interest or penalty or compensation and enforcement of order, etc.- (1) If a promoter or an allottee or a real estate agent, as the casemay be, fails to pay any interest or penalty or compensation imposed on him, by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder, it shall be recoverable from such promoter or allottee or real estate agent, in such manner as may be prescribed as an arrears of land revenue. (2) If any adjudicating officer or the Regulatory Authority or theAppellate Tribunal, as the case may be, issues any order or directs any person to do any act, or refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder, then in case of failure by any person to comply with such order or direction, the same shall be enforced, in such manner as may be prescribed." 139. The submission of the appellants/promoters is that under Section 40(1) of the Act only the interest or penalty imposed by the authorit....