Allahabad High Court
M/S Supertech Ltd. vs Subrat Sen on 1 October, 2018
Bench: Pankaj Mithal
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Case :- SECOND APPEAL DEFECTIVE No. - 341 of 2018
Appellant :- M/S Supertech Ltd.
Respondent :- Subrat Sen
Counsel for Appellant :- Rohan Gupta,Akshay Mohiley
Hon'ble Pankaj Mithal,J.
This is a reference under Section 5 of the Court Fees Act, 1870 (hereinafter the Act) arising in an appeal under Section 58 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the R.E.R.A.).
The appellant is a real estate promoter that has launched a group housing project Renessa (later renamed as Romano) in Sector-119, Noida in the year 2012. The respondent Subrat Sen appears to have booked an apartment in the aforesaid project of the appellant. He made a complaint on 28.12.2017 before the U.P. Real Estate Regulatory Authority under Section 31 of the R.E.R.A. against the appellant.
The complaint on contest was decided on 15.03.2018 and the appellant was directed to refund the entire principal amount of Rs.14,12,402/- with 2% interest and to pay compensation of Rs.3,20,000/- to the respondent.
The aforesaid order of the R.E.R.A. was challenged by the appellant by filing an appeal under Section 44 of the R.E.R.A. before the Real Estate Appellate Tribunal (Appellate Tribunal). The appeal was filed with the delay of 3 days. The explanation furnished for condoning the delay in filing the appeal was not accepted and hence the appeal was dismissed vide order dated 06.07.2018 as barred by time.
The appellant has thus preferred this appeal under Section 58 of the R.E.R.A. which allows filing of appeal against any decision or order of the Appellate Tribunal in the High Court on one or more of the grounds specified in Section 100 of the Code of Civil Procedure (C.P.C.).
The appellant presented the memo of appeal by affixing court fees of Rs.5/ only. On an appeal being so presented the office of the Stamp Reporter reported deficiency of Rs.1,30,340/- in court fees on the valuation of the appeal as given by the appellant.
The appellant took objection to the above report contending that though it is a statutory appeal but not a Second Appeal. Therefore, court fees as payable on a Second Appeal cannot be demanded. The proceedings of R.E.R.A. are of a summary nature to which the provisions of Code of Civil Procedure are not applicable. The order of Appellate Tribunal is not a decree under Section 2(2) of the C.P.C. and since the R.E.R.A. do not provide for any court fees on such an appeal, the court fees as prescribed in Article 11 of Schedule II to the Act alone is payable thereof.
The Taxing Officer by an order dated 21.08.2018 overruled the objections and held that the appeal is a Second Appeal as has also been described by the appellant and since the appellant himself has valued the appeal at Rs.17,32,402/-, he is liable to pay ad-valorem court fee as per Article 1 of Schedule I to the Act.
The appellant was not satisfied by the rejection of his objections and the report to pay ad-valorem court fees. He questioned the report as well as the order of the Taxing Officer before the Judge of the High Court, before whom the memorandum of appeal was placed for consideration.
The learned Judge in view of Section 5 of the Act by the order dated 10.09.2018 referred the matter to the Taxing Judge nominated by the Chief Justice.
Accordingly, the appeal has been placed before me as a Taxing Judge nominated by the Chief Justice as the question is said to be one of general importance which has cropped up for the first time as this appears to be the appeal under Section 58 of the R.E.R.A. coming up for the first time in the High Court.
I have heard Sri Rohan Gupta, learned counsel for the appellant and the Taxing Officer/Presenting Officer.
The contention is that this appeal though described as a Second Appeal is not a second appeal in real sense as contemplated by Section 100 C.P.C. It do not arise from a decree of a court. Since R.E.R.A. do not prescribe for any court fees, a fixed court fees of Rs.5/- as prescribed under Article 11 of Schedule II of the Act is payable.
On the other hand the Taxing Officer/Presenting Officer submits that the appeal is basically a Second Appeal as provided under Section 100 C.P.C. inasmuch as every order of the Appellate Tribunal is executable as a decree. Therefore, in view of Section 4 read with Article 1 of Schedule 1 to the Act ad-valorem court fees on the valuation of the appeal is payable.
On the basis of the rival submissions so advanced, the following substantial question of law of general importance do arises for consideration:-
Whether on the memo of appeal filed in the High Court under Section 58 of R.E.R.A., court fees as provided under Article 1 Schedule I to the Act would be payable or it would be governed by Article 11 of Schedule II to the Act?
R.E.R.A. is a special enactment which provides for the regulation and promotion of the real estate by promoting sale of real estate in an efficient and transparent manner; to protect the interest of purchaser of the real estate; and to provide speedy adjudicating mechanism of the disputes in matters connecting thereof.
In substance while promoting real estate it envisages to protect and safeguard the interest of the investors in the real estate. It is therefore, a kind of beneficial legislation for the protection of the investor/purchaser of the real estate.
Section 58 of the R.E.R.A. provides for an appeal to the High Court on the grounds specified under Section 100 C.P.C. against any decision or order of the Appellate Tribunal.
Section 58 of the R.E.R.A. is reproduced herein below:-
"58. Appeal to High Court-(1) Any person aggrieved by any decision or order of the Appellate Tribunal, may, file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in Section 100 of the Code of Civil Procedure, 1908:
Provided that the High Court may entertain the appeal after the expiry of the said period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.
Explanation-The expression "High Court" means the High Court of a State or Union territory where the real estate project is situated.
(2) No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties."
A bare reading of the aforesaid provision clearly establishes that it provides for an appeal against the decision or order of the Appellate Tribunal but unlike Code of Civil Procedure it does not use the words "second appeal" as are used in Section 100 of the C.P.C. It only provides that the appeal can be preferred on any of the grounds mentioned in Section 100 C.P.C. which does not make the appeal to be a second appeal in spite of the fact that it is an appeal against an appellate decision or order and in the sense is virtually a second appeal.
Section 100 C.P.C. reads as under:
"100. Second appeal-(1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law."
Section 100 C.P.C. provides for an appeal to the High Court against a decree passed in appeal by courts subordinate to the High Court. Therefore, for maintaining a second appeal thereunder it is essential that it should arise out of a decree passed in appeal and that too by any court subordinate to the High Court. The Appellate Tribunal is not a court subordinate to the High Court and the decision or the order of the Appellate Tribunal is not a decree. The appeal under Section 58 of the R.E.R.A. to the High Court is thus not an appeal against any decree of any court subordinate to the High Court. Therefore, it cannot be recognised as a second appeal as contemplated by Section 100 C.P.C.
The 'decree' has been defined under Section 2(2) C.P.C. to mean a formal expression of an adjudication which conclusive determines the rights of the parties with regard to all or of any of the matters in controversy in the suit.
Section 2(2) of the C.P.C. is as under:
"decree" means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include-
(a) any adjudication from which an appeal lies as an appeal from an order, or
(b) any order of dismissal for default.
Explanation-A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final;
In the definition of the 'decree' three words are important namely adjudication, court and suit. The use of the said words conclusively show that adjudication by the court in a suit only results in a decree. It is also necessary to note that the suit commences with a plaint and ends when a judgement and order is pronounced which culminates into a decree. The decision or the order of the Appellate Tribunal or that of R.E.R.A. do not conform to any of the above requirements of a decree as defined in Section 2(2) C.P.C.
The definition of a 'decree' contained in the above provision brings-forth the three essential conditions viz.
(i) the adjudication must be in a suit;
(ii) the suit must start with a plaint and end in a decree; and
(iii) the adjudication must be formal and final by the court.
The proceedings before the R.E.R.A. are not in the nature of a suit instituted by filing a plaint rather on a complaint. Accordingly, proceedings before the R.E.R.A. cannot be termed as a suit. Thus the decision or order of R.E.R.A. or by the Appellate Tribunal on an appeal arising out of such proceedings would not be a decree within the meaning of Section 2(2) C.P.C.
As far as Section 57 of the R.E.R.A. is concerned it simply provides that every order of the Appellate Tribunal shall be executable by it as a decree of the civil court and for that purpose only the Appellate Tribunal will have all the powers of the civil court.
Section 57 of the R.E.R.A. is quoted below:-
"57.Orders passed by Appellate Tribunal to be executable as a decree-(1) Every order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court, and for this purpose, the Appellate Tribunal shall have all the powers of a civil court.
(2) Notwithstanding anything contained in sub-section (1), the Appellate Tribunal may transmit any order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by the court."
A reading of the aforesaid provision itself makes it clear that by creating a legal fiction, the order of the Appellate Tribunal has been recognised to be a decree only for limited purpose of execution but not for the purposes of filing an appeal against it. It is settled law that in applying legal fiction one should not travel beyond the limits for which it has been created. In Paramjeet Singh Patheja Vs. ICDS Ltd. JT 2006 (10) SC 41 the Supreme Court in paragraph 36 of the above decision observed that a legal fiction must be limited to the purpose for which it was created. Therefore, for the purposes of appeal under Section 58 of the R.E.R.A. the decision or order of the Appellate Tribunal would remain to be an order simplicitor and would not be a decree within the meaning of Section 2(2) of the C.P.C.
In view of the aforesaid discussion, I am of the opinion that the order passed by the Appellate Tribunal is not a decree for the purposes of filing an appeal under Section 58 of the R.E.R.A. before the High Court. Therefore, any appeal so preferred before the High Court under Section 58 of the R.E.R.A. stand on a similar footing as are the Income Tax Appeals filed under Section 260 of the Income Tax Act, 1961 and such appeals are not to be categorised as Second Appeal even if they are arising out of an appellate order but under a distinct category as R.E.R.A. appeal.
There is no dispute that the R.E.R.A. do not provide for any court fees that may be payable either on the complaint or on the memo of appeal preferred before the Appellate Tribunal or the High Court. It is completely silent on the above aspect.
The Court Fees Act, 1870 vide Section 4 of the Act specifically provides that no document of any kind which has been specified in Schedule I and II to the Act shall be filed or furnished in the High Court in any case unless the court fees as chargeable is paid on it.
The relevant portion of Section 4 of the Act is reproduced hereinbelow:-
"4. Fees on documents filed etc., in High Courts in their ordinary or extraordinary jurisdiction- No document of any of the kinds specified in the first or second schedule to this act annexed, as chargeable with fees, shall be filed, exhibited or recorded in or shall be received or furnished by [the High Court of Judicature of Allahabad] in any case coming before such Court in exercise of its [ordinary or] extraordinary original civil jurisdiction."
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"unless in respect of such document there be paid a fee of an amount not less than than indicated by either of the said Schedules as the proper fee for such document."
In other words all documents filed before the High Court have to be charged with court fees as may be provided in Schedule I or II to the Act meaning thereby that the memo of appeal under the R.E.R.A. would therefore, be also governed by the said Act, if filed before the High Court.
Schedule I of the Act provides for payment of Ad-valorem court on the valuation and Article 1 of it mentions the plaint, written statement, pleading a set-off or counter-claim or memorandum of appeal not otherwise provided for in the Act, presented to any Civil or Revenue Court. Therefore, ex facie memorandum of appeal is also covered under the aforesaid Article for the payment of Ad-valorem court fees provided it is presented to Civil or Revenue Court and subject to the further condition it may not otherwise be provided in the Act.
In Article 11 of Schedule II of the Act it has been provided that if a memorandum of appeal which is not against a decree or an order having a force of a decree, is presented to the High Court a fixed court fees of Rs.5/- only is payable.
It is well recognised in law that the legislature in enacting the Act used the term 'decree' in the same sense as it is used it in Section 2(2) of C.P.C. Moreover, as the word 'decree' has not been defined under the Act or even the General Clauses Act it is safe to assume that it has been used in the Act in the same sense as in C.P.C.
In view of the aforesaid, Article 1 of Schedule I of the Act would stand excluded in its applicability to the memorandum of appeals which are not against a decree or an order having the force of a decree and are not presented to any civil or revenue court but before the High Court.
For the sake of convenience the relevant portions of Article 1 of Schedule I and Article 11 of Schedule II of the Act are reproduced hereinbelow so as to bring forth to clear distinction between the memorandum of appeals refereed to in those Articles.
SCHEDULE I
1. Plaint, written statement, pleading a set-off or counter-claim or memorandum of appeal 1(not otherwise provided for in the Act), presented to any Civil or Revenue Court except those mentioned in Section 3.
When the Amount or value of the subject mater in dispute.
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(vii) exceeds ten thousand rupees.
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On ten thousand rupees the fee payable under clause (vi),and on the remainder, thirty seven rupees and fifty naye paise for every five hundred rupees or part thereof.
SCHEDULE II
11. Memorandum of appeal 2when the appeal is not from a decree or an order having the force of a decree and is presented.
(a)...........................
(b)..........................
(c) To a High Court or to a Chief Controlling Executive or Revenue Authority.
Five rupees.
A comparison of both the Articles would reveal that Article 1 of Schedule I covers all memorandum of appeals presented before civil or revenue court excluding those which are otherwise provided under the Act.
Article 11 of Schedule II covers all memorandum of appeals including those presented before High Court but excluding those arising from a decree or an order having the force of decree. The order of the Appellate Tribunal is not a decree otherwise then for a limited purpose of its execution by the Appellate Tribunal itself. Therefore, the memorandum of appeal against the order of Appellate Tribunal would squarely fall under Article 11 of Schedule II to the Act. Since it has been provided under the aforesaid entry it would be stand excluded from Article 1 of Schedule I of the Act. Thus, it would not be amenable to payment of ad-valorem court fees.
With reference to AIR 1957 SC 657, A.V. Fernandez Vs. State of Kerala, and AIR 1964 SC 457 State of Maharashtra Vs. Mishri Lal Tarachand it could be said that the matter is settled that a provision of fiscal statute must be strictly interpreted giving every benefit of doubt to the assessee so as to lighten the burden of the assessee.
In Diwan Brothers Vs. Central Bank of India, Bombay and others AIR 1976 SC 1503 the court was ceased with a matter of payment of court fees in an appeal before the High Court arising from the order of the Tribunal appointed under the Displaced Persons (Debts Adjustment) Act 1951.In the said case also the question that fell for consideration was whether or not the decision given by the Tribunal under the aforesaid Act could be said to be a decree within the meaning of Article 11 of Schedule II to the Act for the purposes of payment of court fee.
The court observed that the Tribunal under the Act cannot be called a court as there is clear distinction between a Tribunal and the Court. The proceedings before the Tribunal do not start with a plaint and as such would not culminate into a decree.
The mere description of the decision of the Tribunal to be a decree for the limited purpose would not make the decision a decree within the meaning of Section 2(2) of the C.P.C.
The court held that the term decree used in Article 11 of Schedule II to the Act is referable to a decree as defined under Section 2(2) of C.P.C. and the decision of the Tribunal does not fulfill the requirements of the decree. Therefore, the memorandum of appeal filed before the High Court squarely falls within the ambit of Article 11 of Schedule II of the Act and the ad valorem court fees under Article 1 of Schedule II of the Act is not payable.
The court also held that where an adjudication given by the Tribunal could fall within two provisions of the Act, one which is onerous for the litigation and the other more liberal, the court would apply the provision which is beneficial to the litigation.
In view of the aforesaid facts and circumstances, the objection of the learned counsel for the appellant that only a fixed court fees of Rs.5/- as prescribed under Article 11 of Schedule II of the Act is payable on the memorandum of appeal filed before the High Court under Section 58 of the R.E.R.A. is sustained and the order of the Taxing Officer dated 21.08.2018 and the report of the Stamp Reporter directing for payment of ad-valorem court fees in accordance with Article 1 of Schedule 1 to the Act are held to be incorrect.
Accordingly, question referred and arising in the matter is answered in favour of the appellant. The appeal is not deficient in court fees.
Office is directed to create a special category of appeals which are preferred under Section 58 of the R.E.R.A. and not to register them as Second Appeal but as R.E.R.A. Appeals.
Let the appeal be placed before the appropriate Court, as a fresh case as soon as a jurisdiction in this regard is created by the Chief Justice.
Date- 01.10.2018 (Pankaj Mithal)
Taxing Judge
