Bombay High Court
The Bombay Dyeing And ... vs Ashok Narang And Anr on 30 August, 2021
Bench: C.V. Bhadang
sast-4996-2020 & group
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
SECOND APPEAL (ST) NO.4996 OF 2020
WITH
INTERIM APPLICATION NO.3383 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Ashok Narang
2. Rajkumar Sharma
302, Coste Belle, 687,
Perry Cross Road, Bandra (West),
Mumbai - 400 050. ..Respondents
WITH
SECOND APPEAL (ST) NO.4931 OF 2020
WITH
INTERIM APPLICATION NO.3343 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Paresh Harilal Sutaria
901, Shatrunjay, Neelkanth Valley,
Rajawadi, Ghatkopar (East),
Mumbai - 400 077.
2. Chetna Paresh Sutaria
901, Shatrunjay, Neelkanth Valley,
Rajawadi, Ghatkopar (East),
Mumbai - 400 077.
3. Pratham Paresh Sutaria
901, Shatrunjay, Neelkanth Valley,
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Rajawadi, Ghatkopar (East),
Mumbai - 400 077. ..Respondents
WITH
SECOND APPEAL (ST) NO.4985 OF 2020
WITH
INTERIM APPLICATION NO.3370 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Deepak Kumar Gaddhyan
IRIS-1102, The Verandas
Golf Course Road, Sector 54,
Gurgaon - 122 002.
2. Rekha Gaddhyan
IRIS-1102, The Verandas
Golf Course Road, Sector 54,
Gurgaon - 122 002. ..Respondents
WITH
SECOND APPEAL (ST) NO.4986 OF 2020
WITH
INTERIM APPLICATION NO.3375 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Srinath Srinivasan
2. Jyothsna Srinath
1103, Raheja Empress,
Veer Savarkar Marg, Prabhadevi,
Mumbai - 400 025. ..Respondents
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WITH
SECOND APPEAL (ST) NO.4990 OF 2020
WITH
INTERIM APPLICATION NO.3379 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Kersi Homi Patel
2. Sunnu Kersi Patel
Garden Home Building,
Apartment-114, Oud Metha Street 1,
P. O. Box 113723, Dubai,
United Arab Emirates. ..Respondents
WITH
SECOND APPEAL (ST) NO.4993 OF 2020
WITH
INTERIM APPLICATION NO.3380 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Narayanan Venkitraman
2. Mahalaxmi Narayanan
Flat No.401, 'B' Wing,
Riddhi Siddhi, 5th Road, Chembur,
Mumbai - 400 071. ..Respondents
WITH
SECOND APPEAL (ST) NO.4998 OF 2020
WITH
INTERIM APPLICATION NO.3385 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
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C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Dinesh Lodha
2. Nidhi Dinesh Lodha
3C/204, Whispering Palms,
Lokhandwala Township
Mumbai - 400 101. ..Respondents
WITH
SECOND APPEAL (ST) NO.5000 OF 2020
WITH
INTERIM APPLICATION NO.3387 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Rajkumar Sharma
2. Meenakshi Sharma
801, Vastu Building,
52 Pali Hill Road, Bandra (West),
Mumbai - 400 050. ..Respondents
WITH
SECOND APPEAL (ST) NO.5003 OF 2020
WITH
INTERIM APPLICATION NO.3389 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
Rohit Chawla
1102, Snow Flama,
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Dosti Flamingos, T. J. Road,
Sewri, Mumbai - 400 015. ..Respondent
WITH
SECOND APPEAL (ST) NO.5005 OF 2020
WITH
INTERIM APPLICATION NO.3391 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1. Surendra Kumar Jalan
2. Mrs. Anjali Jalan
G-1204, Royal Classique,
New Link Road, Andheri (W),
Mumbai - 400 053. ..Respondents
WITH
SECOND APPEAL (ST) NO.5009 OF 2020
WITH
INTERIM APPLICATION NO.3393 OF 2020
The Bombay Dyeing & Manufacturing
Company Limited
C-1, Wadia International Centre
(Bombay Dyeing), Pandurang Budhkar
Marg, Worli, Mumbai-400 025. ..Appellant
Vs.
1.Vishnukumar Poddar
2. Anuj Vishnukumar Poddar
201, Martins Nest, 9,
Central Avenue, Mumbai - 400 054. ..Respondents
----
Mr. Dinyar Madon, Senior Advocate a/w. Mr. Ziyad Mandon, Ms.
Niyathi Kalra and Ms.Rujuta Patil i/b Negandhi, Shah &
Himayatullah for the Appellants in IAST 93279 of 2020 in SAST
4996 of 2020.
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Mr. J. P. Sen, Senior Counsel a/w. Mr. Vaibhav Ghogare, Ms. Niyathi
Kalra, Ms. Sonu Bhasi and Ms. Rutuja Patil i/b. Negandhi, Shah &
Himayatullah for the Appellants in IAST 93270 of 2020 in SAST
4985 of 2020.
Mr. Shiraz Rustomjee, Senior Counsel a/w. Mr. Jai Chhabria, Ms.
Aradhana Bhansali, Ms. Aarti Jumani and Ms. Mansi Padwalkar i/b.
Rajani Associates for the Respondents in SAST No.4931/2020 with
IA No.3343/2020 with IAST No. 93269/2020, SAST No.4986/2020
with IA No.3375/2020, SAST No.4993/2020 with IA No.3380/2020,
SAST No.4996/2020 with IA No.3383/2020 with IAST
No.93279/2020, SAST No.5000/2020 with IA No.3387/2020, SAST
No.5003/2020 with IA No.3389/2020 and SAST No.5009/2020
with IA No.3393/2020 for the Respondents.
Mr. Shiraz Rustomjee, Senior Counsel a/w. Jai Chhabria, Ms. Suta
Kapadia, Ms. Anusha and Ms. Tushi Pant i/b. Keystone Partners for
the Respondents in SAST No.4998/2020, SAST No.5005/2020,
SAST No.4985/2020 & SAST No.4990/2020.
Ms. Niyathi Kalra and Ms. Rutuja Patil i/b. Negandhi, Shah &
Himayatullah for the Appellants / Applicants in remaining matters.
----
CORAM : C.V. BHADANG, J.
RESERVED ON : 11th MARCH 2021
PRONOUNCED ON : 30 AUGUST 2021
COMMON JUDGMENT:
. These are second appeals under section 58 of the Real
Estate (Regulation and Development) Act 2016 ('Act of 2016', for
short) challenging the common judgment and order dated 31
December 2019 passed by the Maharashtra Real Estate Appellate
Tribunal ('Appellate Tribunal', for short) in a group of first appeals.
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The appeals involve common and connected questions of law and
facts. As such they are being disposed of by this common judgment.
2. The Bombay Dyeing and manufacturing Company Ltd
(the appellant), is the promoter and builder while the respondents
are the buyers/allottees of the flats. The appellants had floated a
project at Spring Mills Compound Wadala Mumbai. Phase II of the
project consists of two towers ICC Tower one and ICC Tower two.
The project was publicised and marketed as an ultra luxurious
project with state of the art amenities. According to the respondents
on the basis of the representation made in the advertisement,
prospectus and brochure, the respondents booked flats in the two
towers in the year 2012-13 and submitted booking application forms
which incorporated the terms and conditions. The appellant issued
confirmation letters and allotment letters. According to the
respondents the appellant had expressly represented to deliver
possession of the flats by 2017. The flats were allotted under the
20:80 scheme under which 80% consideration was to be paid at the
time of delivery of possession. The respondents have paid
approximately 20 % of the consideration that is about 2 crores in the
year 1012-13 alongwith service tax and premium.
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3. The Act of 2016 came into force on 1 May 2017 and the
project was registered being an ongoing project under the said Act
of 2016. According to the respondents at the time of registration the
appellants unilaterally extended the completion date as 31 August
2018 and the revised date as 31 August 2019.
4. As the appellant failed to deliver possession of the flats
as agreed the respondents filed separate complaints under section
31 of the Act of 2016 before the Maharashtra Real Estate Authority.
('Authority', for short) It was contended that the appellant has
committed breach of section 12 read with section 18 of the Act of
2016. The respondents therefore sought cancellation of the
allotment and refund of the amount paid with interest. The
Authority by a common judgment dated 9 January 2020 and 25
January 2020 disposed of the complaints, advising the parties to
execute and register the agreement of sale as per section 13 of the
Act of 2016. Alternatively the Authority stipulated that in the event
the respondents intend to withdraw from the project the same
would be governed by the terms and conditions of the allotment.
The Authority referring to the decision of this court in the case of
Neelkamal Realtors Suburban Private Limited and Anr. Vs. Union of
India & Ors.1 found that section 12 not being retrospective in
1Writ Petition No.2737/2017 dated 6/12/2017
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operation would not apply in this case. The Authority did not pass
any order regarding refund of the amount with interest as prayed.
5. Feeling aggrieved, the respondents/allottees challenged
the same before the Appellate Tribunal in separate appeals. The
Appellate Authority framed the following points for determination.
1 Whether Section 12 of the RERA applies prospectively
or retrospectively or retroactively ?
2 Whether promoter committed breach of Section 12 and
Section 18 of the RERA Act ?
3 Whether allottees are entitled for refund along with
interest and compensation from the promoter, if yes what is the rate
of interest ?
4 What order ?
6. The Appellate Tribunal found that section 12 of the Act
of 2016 has a retroactive operation. On facts, it was found that the
appellant had committed breach of section 12 and 18 of the Act of
2016. In the face of the findings as above, the Appellate Tribunal by
a judgment and order dated 31 December 2019 partly allowed the
appeals thereby setting aside the order passed by Authority. The
Appellate Tribunal cancelled the allotments and directed return of
the amount with service tax and MVAT etc with interest. A charge of
the amount has been kept on the respective flat. Feeling aggrieved
the appellants are before this court.
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7. On 19 January 2021, these appeals were admitted on
the following substantial questions of law.
(i) Whether Sections 12 and 18 of RERA Act are
substantive in nature and not merely procedural ?
(ii) Whether Sections 12 and 18 of RERA Act are not
declaratory of previous law but enact new law that affect
substantive rights ?
(iii) Whether Section 12 of RERA Act, applies only to
such representations as are made after the coming into
force of the said Act of 2016 ?
(iv) Whether Section 18 of the RERA Act, would apply
only to Agreements entered into after the coming into
force of the said Act of 2016 ?
(v) Whether the first proviso to Section 3(1) of the Act
of 2016 read along with Section 4(2)(l)(c) of RERA Act
requires the Promoter to obtain the consent of the flat
purchasers prior to notifying the date of completion of the
Project while registering an ongoing Project ?
(vi) Whether a Promoter having notified a date of
completion of an ongoing project under Section 4 of RERA
Act is nevertheless bound to complete the Project by any
earlier date indicated in any prior brochure/
advertisement/ agreement ?
(vii) Whether a refusal to remand a matter which has
been decided solely on the ground of maintainability
without any adjudication on the merits is a proper and
legal exercise of power by an Appellate Authority ?
(viii) Whether a failure by an Appellate Authority to
afford an opportunity to a party who has succeeded in the
trial court on a point of maintainability to make its case on
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the merits before the Trial Court constitutes a denial of
natural justice ?
(ix) Whether an application for refund and for
compensation under Section 18 of RERA Act can be filed
only on the basis of a proper Agreement for sale, which
records all material terms and conditions of the bargain
including inter alia, the date for completion of the
construction/project ?
(x) Whether the project completion date, originally
notified at the time of registration under RERA Act, can be
termed as the date specified in the agreement for sale for
the purposes of an application for refund and for
compensation made under Section 18 of the said Act of
2016 ?
8. I have heard the learned counsel for the parties on the
aforesaid substantial questions of law. The parties have also filed
synopsis of their submissions and I have gone through the same.
The appeals were taken up for final disposal, as urged on behalf of
the parties, in as much as the allotment pertains to the year 2012-13
and as the dispute is pending since long. The appeals are
accordingly being disposed of finally by consent of parties.
9. Mr. Madan, the learned Senior Advocate for the
appellants made following submissions.
(i) That the date of completion was stipulated as 31
August 2019 and the part occupation certificate for the two
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buildings / relevant flats was obtained much before that date. Thus,
there is no breach of any representation as regards the date of
completion nor there is any breach on account of any changes
effected to the layout or the amenities as agreed.
(ii) That the appellant had succeeded on the point of
maintainability before the Authority which rightly held that the
provisions of the Act of 2016 were prospective and the complaints
were not maintainable. The respondents failed to comply with the
order dated 9 January 2019 passed by the Authority and declined to
complete the transaction. That the complaints before the Authority
were only contested on account of preliminary objection as to
maintainability and the merits of the complaints were not addressed
nor the appellant had filed any affidavit in reply touching to the
merits of the complaints. The Authority having upheld the
contention on maintainability, in the appeal, the Appellate Tribunal
was not justified in going into the merits of the complaints and at
the highest in the event the Appellate Authority was not inclined to
accept the preliminary ground of maintainability, the complaints
ought to have been remanded back.
(iii) Even if the complaints were held to be
maintainable, the proper course was to remand the matter for
consideration on merits by the Adjudicating Authority under Section
71(1) of the Act of 2016.
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(iv) That the provisions of Section 12 and 18 of the
Act of 2016 are prospective in operation and no complaint could
have been filed under either of these sections in respect of
representations made or agreements entered into prior to the
coming into force of the Act of 2016.
In order to elaborate the submission, reliance is placed
on the decision of the Supreme Court in Hitendra Vishnu Thakur &
Ors. Vs. State of Maharashtra and Ors. 2 , R. Rajagopal Reddy Vs.
Padmini Chandrasekharan3 , Commissioner of Income Tax Vs. Vatika
Township Private Limited 4 , Union of India Vs. M/s. Indusind Bank
Limited 5 , G. J. Raja Vs. Tejraj Surana6 , Shanti Conductors (P) Ltd.
& Anr. Vs. Assam State Electricity Board & Ors. 7 and Purbanchal
Cables and Conductors Private Limited Vs. Assam State Electricity
Board 8, in order to submit that the provisions of Section 12 and 18
have to held to be prospective in operation.
It is pointed out that in the case of Neelkamal Realtors,
the constitutional validity of certain provisions of the said Act of
2016 including Section 18 was challenged. However, there was no
2(1994) 4 SCC 602
3(1995) 2 SCC 630
4(2015) 1 SCC 1
52016 (9) SCC 720
62019 SCC Online SC 989
72019 SCC Online SC 68
8(2012) 7 SCC 462
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challenge to the vires of section 12 of the said Act of 2016 in the
case of Neelkamal Realtors. It is submitted that this Court in the
case of Neelkamal Realtors has held that the provisions of the Act of
2016 are quasi-retroactive in operation. It is submitted that retro-
activity envisages that it is triggered by events that have transpired
prior to coming into force of the Act of 2016. It is submitted that
even the project that has commenced prior to the Act of 2016 in
respect of which an occupation certificate has not yet been issued is
required to be registered under the Act of 2016. However, this
retro-activity does not affect any rights / liabilities that have already
accrued / incurred, prior to coming into force of the Act of 2016. It
is pointed out that the Act of 2016 thus cannot impose any new
liabilities which did not exist prior thereto. It is submitted that
reading of paragraph 256 of the judgment in Neelkamal Realtors
would indicate that the Act of 2016 does not in any way modify the
rights / liabilities of the respective parties under agreements,
entered into prior to coming into force of the Act of 2016. In short,
according to the learned Counsel, Section 12 and 18 of the Act of
2016 will not apply to the representations made and agreements
entered into before coming into force of the said Act of 2016.
(v) In any event, the complaint under Section 18 of
the Act of 2016 would lie only on the basis of stipulation regarding
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the date of delivery in an 'Agreement for Sale' entered into between
the parties.
(vi) It is submitted that Section 71(1) of the Act of
2016, cannot be read to hold that provisions of Section 12 and 18
have retrospective operation. It is submitted that the proviso to
Section 71(1) of the Act of 2016, which envisages transfer of the
complaints pending under the Consumer Protection Act to the
Authority, are not an indication about the retrospective operation of
the Act which would be clear from paragraph 255 of Neelkamal
Realtors (supra) in which this Court held that, reference to pending
cases, is obviously a reference to claims for interest and / or
compensation pending when the RERA came into force. It is
submitted that however, the prospective operation of Section 12 and
18 would not deprive either contracting parties of any preexisting
contractual or statutory rights, arising under the terms of an
agreement or allotment letter or a statute such as the Maharashtra
Ownership Flats (Regulation of Promotion of Construction, Sale,
Management and Transfer) Act, 1963 which govern the relationship
between the parties.
(vii) It is submitted that even in respect of cause of
action accruing prior to the coming into force of the Act,
proceedings can be filed before the Authority, so long as the
occupation certificate has not yet been issued in respect of the
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project and consequently, the project is liable to be registered under
the provisions of the said Act of 2016. However, in such a case, the
complaints (on the basis of such preexisting cause of action) would
be determined in accordance with the preexisting contractual and
statutory rights of the parties and not as per the provisions of the
said Act of 2016.
(viii) The learned Counsel has referred to the decision
of the Delhi Bench of the Authority in Santosh Kumar Maheshwar
(HUF) Vs. M/s. Umang Realtech Private Limited 9 and Shikha
Bansal Vs. M/s. Umang Realtech Private Limited 10 in order to
submit that the authority placing reliance on the decision of this
Court in Neelkamal Realtors has held that Section 18 would be
inapplicable to the agreements that are entered into prior to the
coming into force of the Act of 2016. The orders of the Authority in
the submission of the learned counsel though not binding have a
persuasive value.
(ix) It is submitted that the reliance placed by the
Appellate Tribunal on its earlier decisions is misplaced as in those
decisions the Appellate Authority had no occasion to consider the
law laid down by the Supreme Court on the retrospective operation
of the statutes or the findings in Neelkamal Realtors. It is submitted
9Complaint No.7/2017 Order dated 19/4/2018 (RERA, Delhi)
10Complaint No.11/2017 (RERA, Delhi)
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that the conjoint reading of Section 4 and 18 would show that the
provisions of Section 18 are prospective in operation.
(x) It is submitted that the existence of an agreement
is a necessary pre-requisite under Section 18 of the said Act of 2016
and in the absence of an agreement in writing as defined under
Section 2(c) of the said Act of 2016, no liability can arise under
Section 18 of the Act of 2016. For this purpose, reliance is placed on
Section 13 read with Rule 10 of the Maharashtra Real Estate
(Regulation and Development)(Registration of real estate projects,
Registration of real estate agents, rates of interest and disclosures on
website) Rules, 2017 ('Rules', for short) which requires the
agreement to be in accordance with the model form at Annexure A.
It is submitted that in this case admittedly there is no such
agreement entered / executed between the parties, as a result of the
refusal on the part of the respondents to execute agreement, despite
requests by the appellant. It is submitted that thus the complaint,
brought on the basis of the purported representation made in
brochure is not maintainable much less when the relevant sections
are not retrospective in operation.
(xi) That the Appellate Authority pronounced only the
operative portion on 31 December 2019 without any supporting
reasons which is illegal and has been repeatedly deprecated by the
Supreme Court, including in the case of (i) Balaji Baliram Mupade &
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Anr. Vs. State of Maharashtra and Ors. 11, (ii) Anil Rai Vs. State of
Bihar12, (iii) Bhagwandas Fatehchand Daswani and Ors. Vs. HPA
International and Ors.13 and (iv) R. C. Sharma Vs. Union of India 14.
The reasons were supplied on 13 March 2020 which, in the
submission of learned counsel tantamounts to two separate orders,
which is not acceptable.
10. On the contrary, it is submitted by the learned Senior
Counsel for the respondents that the issue about the operation of
Section 12 and 18 is no longer res-integra as it is covered by
decision in Neelkamal Realtors. It is submitted that the contention
that Section 12 would not apply to statements / representations
made prior to the coming into force of the Act of 2016 and Section
18 would apply only with reference to the date of completion as
mentioned by the promoter at the time of the registration of the
project under Section 3 of the Act of 2016, cannot be accepted. It is
submitted that this Court has already held that the application of the
Act of 2016 to an ongoing project would indicate that the provisions
are quasi retroactive in operation. It is submitted that although
Section 12 was not under challenge in Neelkamal Realtors, the
11Civil Appeal No.3564/2020 dated 29/10/2020 Supreme Court
12(2001) 7 SCC 318
13(2000) 2 SCC 13
14(1976) 3 SCC 574.
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findings in so far as Section 18 of the Act of 2016 are concerned
would apply mutatis mutandis even to the application of Section 12
of the Act of 2016 which provides for refund of the amount paid by
the allottees. It is submitted that it would be incongruous and
illogical to assume that although Section 18 applies to matters that
have transpired before coming into force of the Act of 2016, Section
12 would not apply. It is submitted that there are inherent
indications in the Act of 2016 in the form of the first proviso to
Section 3 and the first proviso to Section 71(1) of the Act of 2016
which would indicate that Act of 2016 applies to representations /
agreements prior to the coming into force of the said Act of 2016.
11. It is submitted that Section 3 and 4 of the Act of 2016
have to be read harmoniously with Section 18 of the said Act of
2016.
12. It is alternatively submitted that the delay in completion
and handing over of possession continued even after the Act of 2016
came into force on 1 May 2017 in as much as the appellants
obtained the commencement certificate on or about 16 March 2017
and first part occupation certificate in March 2019. In short,
according to the learned counsel, it is a continuing wrong / default
on the part of the appellants even after the Act of 2016 came into
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force. Reliance is placed on the decision of the Supreme Court in
M/s Imperia Structures Ltd. vs Anil Patni and Ors. 15 and the
decision of the Allahabad High Court in Habitech Infrastructure Ltd.
Vs. State of Uttar Pradesh and Ors. Writ Petition (C) No.9120 of
202016 and that of the Punjab and Haryana High Court in Experion
Developers Pvt. Ltd. Vs. State of Haryana and Ors. CWP No.38144
of 201817
13. It is submitted that paragraph 18 of the impugned
judgment cannot be read in isolation as the Appellate Tribunal was
conscious of the fact that Section 12 was not under challenge in
Neelkamal Realtors. It is submitted that the submission based on
paragraph 39 of the impugned judgment that there is misquoting of
paragraphs of Neelkamal Realtors is also incorrect which according
to the learned counsel is an obvious typographical error. The
learned counsel pointed out that paragraph 28 are the Appellate
Tribunal's own findings.
14. It is submitted that the contention about requirement of
a 'written agreement' was not raised before the Authority. It is
submitted that the respondents/ allottees submitted before the
15(2020)10 SCC 783
16Writ Petition (C) No.9120 of 2020
17CWP No.38144 of 2018
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Appellate Tribunal that Section 18 applies even in the absence of a
formal written agreement. In reply thereto, it was contended on
behalf of the appellant in the written submission dated 22 October
2019 that this question was not germane and did not arise in the
appeals. It is submitted that thus the Appellate Tribunal has not
rendered and was not called upon to render a finding on the same.
It is pointed out that the findings by the Appellate Tribunal in
paragraph 35, 73 and 78 are recorded in a different context and not
in the context of whether Section 18 could apply in the absence of a
formal written agreement. It is submitted that therefore the
appellant cannot be allowed to raise said contention for the first
time in second appeal for which reliance is placed on the decision in
the case of Maharaj Singh And Ors. vs Hukum Singh18. It is
alternatively submitted that appellants by their conduct have waived
its right to raise the said question / issue. Reliance in this regard is
placed on the decision in Mumbai International Airport Pvt. Ltd. Vs
Golden Chariot Airport & Anr.19 , Suzuki Parasrampuria Suitings Pvt.
Ltd. Vs. Official Liquidator of Mahendra Petrochemicals Ltd. 20 and
Amritlal N. Shah Vs. Alla Annapurnamma 21.
18AIR 1964 Allahabad 136
19(2010) 10 SCC 422
20(2018) 10 SCC 707
21AIR 1959 AP 9
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15. It is submitted that even otherwise Section 18 is
applicable where there is a contractual understanding or agreement,
absence of formal written agreement for sale, not notwithstanding.
It is submitted that the agreement for sale as defined under Section
2(c) of the Act of 2016, has to be liberally construed to include not
only a formal written agreement for sale but any other form of
agreement or contractual understanding. It is submitted that in this
case the brochures, booking application, forms / confirmation
letters, allotment letters and the correspondence, exchanged
between the parties, clearly lead to a contractual understanding,
sufficient to satisfy the requirement of an agreement for sale, within
the meaning of Section 18 of the said Act of 2016. It is pointed out
that in the brochure and several other documents the date of
completion was stipulated as 16 March 2017.
16. The rival contentions now fall for determination.
Notwithstanding the extensive narration of the facts and the
submissions, the dispute falls in a narrow compass and belies the
weight of the record. The dispute essentially is that according to the
respondents the project was not completed within the time agreed
and there were changes effected in the layout and the amenities
which is in breach of section 12 and 18 of the said Act of 2016. The
respondents therefore sought cancellation of the allotment and
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refund with interest. On the contrary according to the appellant
section 12 and 18 are inapplicable, those sections not being
retrospective in operation. It is submitted that year 2017 was never
the time agreed for completion and section 18 would not otherwise
apply in the absence of a written agreement which in fact could not
be executed on account of the lapse of the respondents. Incidentally
there is also an issue whether the Appellate Tribunal could have
dealt with the merits of the matter or was required to remand the
complaints to the authority or the adjudicating officer under section
71(1) of the Act of 2016.
17. I would now propose to deal with the various questions
framed ad seriatim.
Question Nos.(i) to (iv)
18. These questions can be taken up together. The question
atleast in so far as section 18 is concerned is no longer res-integra.
The constitutional validity of the said section amongst others was
subject matter of challenge in Neelkamal Realtors. The Division
bench of this Court has noted that the challenge to various
provisions was interalia on the ground of retrospective/retroactive
application of certain provisions and unreasonable restrictions
placed by certain provisions, contrary to Article 19(1)(g) and in
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violation of Article 14 of the Constitution of India. This Court held
that the provisions of Section 18 are not retrospective in nature.
They may to some extent be having retroactive or quasi retroactive
effect. It was held that on that ground the validity of the provisions
cannot be challenged. In para 142 the Division Bench held that the
Act of 2016 was enacted to protect the interest of consumers in the
real estate sector. It has been held that the Act of 2016 was enacted
in Public Interest.
19. In my considered view, it is neither necessary nor
permissible to revisit these provisions in order to examine their
nature. It hardly needs to be stated that I am bound by the decision
in Neelkamal Realtors. It needs to be stated that the Act of 2016 was
enacted for regulation and promotion of the real estate sector and to
ensure sale of plots, apartments, flats etc in an efficient and
transparent manner and to protect the interest of consumers in the
real estate Sector. To that extent it is predominantly a beneficial
piece of legislation. It is true that the Act of 2016 contains provisions
which aim at balancing the rights of the builders/developers That is
bound to be so, as else otherwise the same shall not stand the
scrutiny of Article 14 of the Constitution of India.
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20. Coming to Section 12 it provides for the obligation of
promoter regarding veracity of the advertisement or prospectus. It
provides that if any person making an advance or deposit on the
basis of the information contained in the notice, advertisement or
prospectus or on the basis of any model apartment etc, sustains any
loss or damage by reason of any incorrect false statement included
therein, shall be entitled to compensation from the promoter. The
proviso entitles the person affected by such incorrect, false
statement to withdraw from the project and to get the refund with
interest and compensation. A comparison of section 12 and section
18 would show that even section 18 provides for return of the
amount with interest and compensation 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
as the case may be, duly completed by the date specified therein or
due to discontinuance of the business etc with which we are not
presently concerned. Incidentally section 18 also gives an option to
the allotee to withdraw from the project. Subsection 3 of section 18
is relevant for the purpose and reads thus-
18(3) - If the promoter fails to discharge any other
obligations imposed on him under this Act or the rules
and 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
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the allottees, in the manner as provided under this
Act.
It can thus be seen that under subsection 3 of Section
18 the promoter is obliged to discharge any other obligation
imposed under the Act of 2016 or the rules or regulations made
thereunder (which would include the obligation under section 12)
and in the event of failure thereto would be liable to pay
compensation. Thus in my humble opinion section 12 cannot be
read in isolation and has to be read with section 18 of the Act of
2016. To put it differently both section 12 and section 18 of the Act
of 2016 provide for an option to the allottee to withdraw from the
project and to get refund alongwith interest and compensation
determined in accordance with the provisions of the Act of 2016.
While under section 12 the liability of the promoter arises on
account of the allottee sustaining any loss or damage on account of
any incorrect or false statement contained in the notice,
advertisement or prospectus under section 18 it is interalia on
account of the failure of the promoter to complete or to give
possession in accordance with the terms of the agreement for sale or
as the case may be duly completed by the date specified therein.
Thus although the validity of section 12 was not under challenge in
Neelkamal Realtors there is no reason why Section 12 should be
treated differently.
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21. There was a serious debate during the course of the
arguments at bar whether the section 12 and 18 are substantive in
nature or merely procedural and whether they are merely
declaratory in nature of the existing/previous law or enact new law
affecting substantive rights. It was contended on behalf of the
appellant that they are substantive provisions creating new
rights/liabilities and as such cannot apply to transactions
/representations/agreements entered into prior to the coming into
force of the Act of 2016.
22. I have already noticed that we have a binding decision
in Neelkamal Realtors in sofar as nature of the various provisions of
the Act of 2016 including section 18 and it is not possible to revisit
or reexamine the same. Thus it is not necessary to make a detailed
reference to the decisions in Hitendra Vishnu Thakur and Ors. Vs.
State of Maharashtra and Ors. 22, R. Rajagopal Reddy (Dead) by
LRs. & Ors. Vs. Padmini Chandrasekharan (Dead) by LRs. 23,
Commissioner of Income Tax (Central)-I, New Delhi Vs. Vatika
Township Pvt. Ltd.24, Union of India Vs. Indusind Bank Ltd 25,
G.J.Raja Vs. Tejraj Surana 26 and Shanti Conductors (P) Ltd. & Anr.
22(1994) 4 SCC 602
23(1995) 2 SCC 630
24(2015) 1 SCC 1
25 (2016) 9 SCC 720
26(2019) SCC Online SC 989
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Vs. Assam State Electricity Board and Ors. 27 However, all that can
be said is that the provisions have been held to be retroactive or
quasi retroactive in nature. I also find that no different
considerations can arise even in respect of section 12 of the Act of
2016. It is necessary to note that section 3 of the Act of 2016 obliges
the promoter to register the ongoing project and the project for
which completion certificate has not been issued. Within three
months of the coming into force of the said Act of 2016.
23. A brief reference may be made at this stage to the
decision of the Full bench of this Court in Badrinarayan Shankar
Bhandari in which it is held thus in para 38 of the Judgment
38. (i) A prospective statute operates forwards from
the date of its enactment conferring new rights on
parties without reference to any anterior event, status
or characteristic;
(ii) Retrospective statute, on the other hand, operates
backwards, attaches new consequences, though for
the future, but to an event that took place before the
statute was enacted. It takes away vested rights.
Substantive benefits which were already obtained by a
party are sought to be taken away because of
legislation being given effect to from a date prior to its
enactment. The rules of interpretation of statute raise
a presumption against such retrospective effect to a
legislation. In other words, if the Legislature has not
expressly or by necessary implication given effect to a
272019 SCC Online SC 68
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statute from a date prior to its enactment, the Court
will not allow retrospective effect being given to a
legislation so as to take away the vested rights.
Statutes enacted for regulating succession are
ordinarily not applicable to successions which had
already opened, as otherwise the effect will be to
divest the estate from persons in whom it had vested
prior to coming into force of the new statutes.
Muhammed Abdus Samad Vs. Qurban Hussain, ILR.26
Allahabad 119 (129) P.C.
(iii) There is the intermediate category called
"Retroactive Statute" which does not operate
backwards and does not take away vested rights.
Though it operates forwards, it is brought into
operation by a characteristic or status that arose
before it was enacted. For example, a provision of an
Act brought into force on January, 2014, the Act
applies to a person who was employed on 1 January,
2014 has two elements:
(a) that the person concerned took employment on 1
January, 2014 - an event;
(b) that the person referred to was an employee on
that day - a characteristic or status which he had
acquired before 1 January 2014. Insofar as the Act
applies to a person who took employment on 1
January 2014, the Act is prospective. Insofar as the
Act applies to a person who had taken employment
before 1 January 2014, the Act is retroactive.
The Section 12 & 18 are quasi retroactive in nature
and would apply to representation made and
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agreements entered into prior to the coming into force
of the Act.
It can thus be seen that a retroactive statute or
provision would trigger itself on the basis of some event, status or
characteristics prior to the coming into force of the statute. The
points are answered accordingly
24. Question No.(v) - The first proviso to Section 3(1) of
the Act of 2016 requires an ongoing project that is a project for
which a completion certificate has not been issued to be registered
under the Act of 2016. The promoter is enjoined to make an
application, in respect of an ongoing project, within three months of
the date of commencement of the Act of 2016. It is a matter of
record that the Appellant has got the project registered as an
ongoing project by stipulating the date of completion as 31 August
2018 and revised date as 31 August 2019. Section 4(2)(l)C) of Act
of 2016 requires the promoter to submit a declaration supported by
affidavit stating the time period within which he undertakes to
complete the project or phase thereof as the case may be. Nothing
has been brought to my notice that before stipulation of the revised
date, at the time of the registration of an ongoing project, the
promoter is required to obtain consent of the flat
purchasers/allottees. The point is answered accordingly.
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25. Question No.(vi) - Although the parties had advanced
their submissions on the point I find that the said issue is also
covered by the decision in Neelkamal Realtors. The Division Bench
has held thus in para 305.
Section 4(2)(l)(C) enables the promoter to revise the
date of completion of project and hand over
possession. The provisions of RERA, however, do not
rewrite the clause of completion or handling over
possession in agreement for sale. Section 4(2)(l)(C)
enables the promoter to give fresh time line
independent of the time period stipulated in the
agreements for sale entered into between him and the
allottees so that he is not visited with penal
consequences laid down under RERA. In other words,
by giving opportunity to the promoter to prescribe
fresh time line under Section 4(2)(l)(C) he is not
absolved of the liability under the agreement for sale.
(Emphasis supplied)
26. A meaningful reading of the aforesaid para would
indicate that the Division Bench has found that on one hand the
promoter is entitled to stipulate fresh time line independent of the
time period stipulated in the agreement, so that he is not visited
with penal consequences. However this does not absolve the
promoter of the liability under the agreement for sale. A perusal of
the judgment in Neelkamal Realtors would show that the Division
Bench has made a distinction between the penal provisions and
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provisions leading to or providing for civil consequences and
liabilities. It is necessary to note that the Act of 2016 requires the
promoter to register ongoing projects that is projects where the
completion certificate is not issued. While doing so the Act of 2016
aims at balancing the rights/interest of the promoter by enabling
him to stipulate a fresh timeline so as absolve him of the penal
consequences. However in so far as rights and liabilities of the
parties are concerned the promoter is not absolved of the liability
thereunder. To put it differently, the Division Bench has in terms
held that the stipulation of the fresh/revised date is only to absolve
the promoter of the penal consequences and not otherwise. In the
face of the finding of the Division Bench it is neither necessary nor
possible to dwell independently on the issue. The point is answered
accordingly.
27. Question Nos.(vii) and (viii)- There was a serious
debate during the course of the arguments at the bar, as to whether
the complaint was decided by the Authority only on the basis of the
Preliminary issue of maintainability or otherwise. The parties have
also advanced arguments on the necessity and/or advisability and
propriety of a remand.
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28. A perusal of the order passed by the authority would
show that the Authority has noted the decision in Neelkamal
Realtors. The authority has found that section 12 cannot be applied
retrospectively to transactions that transpired before the Act of 2016
came into force. The authority has essentially refused to grant the
relief of refund with interest on the ground that allowing bulk
withdrawal from the project involving about 520 allottees will
jeopardize the project which was at an advanced stage of
construction where 80% of the super structure was completed. The
Authority has also noted that under section 4(2)(l)(C) of the Act of
2016 read with Rule 4(2) of the Maharashtra Real Estate
(Regulation and Development) etc Rules 2017 (Rules for short) the
promoter was entitled to prescribe fresh timeline which in the
instant case, was stated to be August 2019. The Authority has noted
that the parties were at an advanced stage of negotiations and the
draft agreement for sale was exchanged between the parties post the
enforcement of the Act of 2016. It is in these circumstances that the
Authority has disposed of the complaints by "advising" the parties to
execute and register the agreements of sale as per section 13 of the
Act of 2016. The authority has also alternatively stipulated that if
the complainants intend to withdraw from the project then such
withdrawal shall be guided by the terms and conditions of the
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allotment letters. Significantly there is no reference to section 18 of
the Act of 2016 in the order of the authority.
29. On a perusal of the order passed by the authority it is
not possible to accept that it is passed purely on the basis of the
preliminary objection. What appears to have weighed with the
authority is that the project involving about 520 allottees and which
was at an advanced stage of construction would be jeopardized
requiring withdrawal of amount from the separate account under
section 4(2)(l)(D) of the Act of 2016, if bulk withdrawal is
permitted. A perusal of the order would further show that specific
submissions were made before the authority that the appellants are
willing to execute and register the agreement of sale, that the
project is at an advanced stage of development as per the sanctioned
plans and approvals which were disclosed at the time of registration
of the project under the Act of 2016. It was also contended that
there are no changes made which would amount to violation of
section 14 of the Act of 2016. The appellant also expressed
commitment to execute and register the agreement strictly as per
the provisions of the Act of 2016 and the rules and regulations
framed thereunder and to deliver possession as per the revised
timeline. The order also records that multiple opportunities were
given to the parties to settle the matter amicably. Thus it is not
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possible to accept that the authority has refused to entertain the
complaint solely by upholding the preliminary objection. Quite to
the contrary the Authority has alternatively indicated that if the
complainants intend to withdraw from the project the same shall be
governed by the conditions of the allotment letter.
30. Both the learned members of the Appellate Tribunal
have separately dealt with the issue of remand. The Tribunal has
found that there was neither a request for framing of a preliminary
issue nor any such issue was framed by the authority. It has also
been noticed that in spite of an opportunity granted by the Tribunal
by order dated 10/22 April 2019 for filing additional pleadings no
defense on merits was filed.
31. In any event I find that the Appellate Tribunal( which
would be final fact finding authority) has extensively considered the
rival contentions both on law and on facts. The findings cannot be
said to be infirm or perverse, so as to give rise to any substantial
question of law. It is necessary to note that the Appellate Tribunal
has not granted any compensation. Thus there was no occasion for
a remand to the adjudicating officer under Section 71(1) of the Act
of 2016. In any event I do not find that the Tribunal was in error in
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refusing to remand the complaints nor a case for remand is made
out in these appeals.
32. It is undisputed that the provisions of the Code of Civil
Procedure do not apply to the authorities under the said Act of
2016. Normally the Court would be slow in directing a remand
unless it is necessary for compelling reasons and in the facts and
circumstances of the case. Once it is found on the perusal of the
impugned order passed by the authorities that the same was not
purely based on the preliminary objection about maintainability and
further having found that the Appellate Tribunal has extensively
gone into the contentions both on facts and in law, in my considered
view, the order of remand is not justified in this case. The point is
answered accordingly.
33. Question Nos. (ix) and (x) - These questions can be
taken up together for consideration. The issue is short whether
operation of section 18 requires a written agreement for sale. On
behalf of the appellant, reliance is placed on Section 2(c) of the Act
of 2016 which defines an agreement for sale alongwith Section 13
and Rule 10 of the 2017 Rules. It is submitted that as per Rule 10 of
the 2017 Rules, for the purpose of Subsection 2 of Section 13, an
agreement for sale, shall be in conformity with the provisions and
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rules and regulations made thereunder and shall be in accordance
with the model form of agreement at Annexure A. It is thus
submitted that the complaints could not have been brought under
Section 18 in the absence of the agreement for sale and only on the
basis of alleged representations made in a brochure.
34. On the contrary, it is contended on behalf of
Respondents that the contention as sought to be raised in the appeal
was not raised before the Authority or the Appellate Tribunal. It is
pointed out that quite to the contrary, in the written submissions
dated 22 October 2019, it was claimed on behalf of respondents that
this question was not germane and did not arise in the appeals. It is
submitted that in such circumstances, the Appellate Tribunal has not
rendered a finding on said issue. Thus, the appellants cannot be
allowed to raise the contention for the first time in the second
appeal. Reliance is placed on the decision in Maharaj Singh and
Others Vs. Hukum Singh28 in this regard. It is submitted that the
appellants by their conduct has waived their right to raise this issue
and the appellants cannot be permitted to approbate and reprobate.
35. It is submitted that Section 2(c) defines an 'Agreement
for Sale' and does not specifically refer to a formal "written
agreement for sale", unlike in Section 13 of the said Act of 2016
28AIR 1964 ALL 136
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which makes a specific reference to a written agreement for sale. It
is submitted that Section 13 is in the context of a prohibition against
the promoter from accepting the sum more than 10% of the cost of
apartment, without first entering into an agreement for sale. It is
thus submitted that the object of Section 13 is limited and Section
13 cannot be used or relied upon to reckon the definition of an
agreement for sale as defined in Section 2(c) of the Act of 2016. It
is submitted that there are several sections such as Section 11, 12,
14, 15, 19, 31, 32 and 71 which refer to the rights of the allottees
which is defined under Section 2(d) of the Act of 2016 and none of
these provisions set out a requirement of a formal written agreement
for sale in order to enable the allottees to enforce the rights. It is
submitted that Section 8 of the Maharashtra Ownership Flats
(Regulation of the Promotion of Construction, Sale, Management
and Transfer) Act of 2016, 1963 ('MOFA', for short) also casts an
obligation on the promoter to refund amount received with interest,
in the event of failure to give possession in accordance with the
terms of the agreement. It is submitted that Section 18 of the Act of
2016 is similar to Section 8 of MOFA. Reliance is placed on the
decision in G. Swaminathan Vs. Shivram Co-operative Housing
Society and Ors.29 and Neena Sudarshan Wadia Vs. M/s. Venus
Enterprises30 in order to submit that in similar provisions under the
29Writ Petition No.1869 of 1982 decided on 24/2/1983 & 25/2/1983
30(1984) 2 Bom.C.R. 505
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MOFA, there is no requirement of a written and registered
agreement as contemplated under Section 4 for invocation of
Section 7 of MOFA.
36. It is submitted that this Court in Neelkamal Realtors has
held RERA Act to be a beneficial legislation devised to protect the
purchasers in the real estate sector who are adversely affected
financially and otherwise by unregulated delays in projects.
Reliance is placed on (i) Lanco Anpara Power Ltd. Vs. State of U.P.
and Ors.31, (ii) Regional Provident Fund Commissioner Vs. Hooghly
Mills Co. Ltd. and Ors.32, (iii) National Insurance Co. Ltd. Vs. Laxmi
Narain Dhut33 in order to submit that the Act of 2016 being a
beneficial legislation to be given due weightage and is free to resort
to historical, contextual and purposive interpretation and not textual
one. Reliance is also placed on a decision of this Court in Lavasa
Corporation Ltd Vs. Jitendra Jagdish Tulsiani and Anr. 34. It is
submitted that in the absence of a specific date, a reasonable period
should be applied as held by the Supreme Court in Fortune
Infrastructure & Anr. Vs. Trevor D'lima and Ors. 35 and Kolkata West
International City Pvt. Ltd. Vs. Devasis Rudra 36. Reliance is also
312016 10 SCC 329
322012 2 SCC 489
332007 3 SCC 700
34(2018) 6 Bom. C.R. 172
35(2018) 5 SCC 442
362019 SCC Online SC 438
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placed on the decision of the Supreme Court in Pioneer Urban Land
and Infrastructure Ltd. Vs. Govindan Raghavan 37. It is submitted
that the Appellate Tribunal has rightly found that the booking of the
flats being made in year 2012-13, it was reasonable to expect
delivery of possession within three years and in any event not
beyond 2017.
37. That apart from Section 18, the respondents are entitled
to seek refund together with interest even under Section 12 of the
said Act of 2016 based on the false and incorrect representations
made. It is submitted that there is correspondence, in which the
respondents have stated that the possession was agreed to be
delivered by 2017 and said aspect was never controverted.
38. In reply, it is submitted on behalf of the appellants that
there is failure on the part of the respondents to execute the
agreement although the Authority had asked the parties to execute
the agreement inspite of attempts by the appellants to require the
respondents to execute the agreement. It is submitted that the
Appellate Tribunal in paragraph 35, 73 and 78 has recorded a
finding and has dwelt upon the contention about the requirement of
a written agreement for application of Section 12 and thus, the
appellants cannot be precluded from raising the same more so when
37(2019) 5 SCC 725
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the issue goes to the root of the matter. It is submitted that the
respondents cannot place reliance on the authorities under the
MOFA nor support its case for application of Section 12 of the said
Act of 2016. It is submitted that the Tribunal was not right in
finding that there was discrepancy in the matter of the agreement
circulated vis-a-vis the model Annexure A, under the Rules of 2017.
It is submitted that even otherwise the Act of 2016 provides for
appropriate modification and alterations in the model agreement
subject to the condition that they are not in derogation of the
provisions of the Act of 2016 and the rules and regulations framed
thereunder. It is submitted that the decisions relied upon by the
respondents are distinguishable on facts.
39. I have carefully considered the rival submissions made
on the said issue. It is a matter of record that the formal agreements
for sale has not been executed in the present case. It is not
necessary to go into the question of the reasons for such non
execution in as much as the question is whether in the absence of a
written agreement whether the provisions of Section 18 can be
invoked. At the outset, it is necessary to note that in the written
submissions dated 22 October 2019 the appellants claimed that the
only issue which arose in the appeal was whether the complaint was
maintainable under Section 12 and 18 of the said Act of 2016. It
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was specifically claimed that the various contentions raised by the
Respondents namely Section 18 of the Act of 2016 would apply even
in the absence of a registered agreement and are not germane and
do not arise in the Appeal before the Appellate Tribunal. It is on
account of such a stand being taken, it is contended on behalf of the
respondents that the appellants cannot be permitted raise said issue
for the first time in the second appeal. The said aspect is countered
on behalf of the appellants, primarily on two grounds. Firstly that
the Appellate Tribunal has dealt with this aspect and secondly the
issue which goes to the root of the matter can otherwise be allowed
to be raised for the first time in the appeal. It is contended on
behalf of the respondents that the findings in para 35, 73 and 78 of
the impugned judgment are rendered in different context.
40. I have gone through the paragraphs 35, 73 and 78. In
para 35, the Tribunal has noted that in the brochure the date of
possession was shown as 2017. The Tribunal has found that if the
booking is done in the year 2013, it is quite possible and probable
that the possession might have been agreed to be delivered within
reasonable time i.e. by the year 2017. The Tribunal has then
referred to the decision of the Supreme Court in Kolkata West
International City and Fortune Infrastructure (supra) in order to find
that the appellants having failed to give possession in the year 2017,
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it committed breach of Section 18 of the Act of 2016. Even in para
73 and 78, the Tribunal has held that Section 12 and 18 are
applicable to the contractual arrangements between the parties. In
para 35 the Tribunal has found that there is sufficient evidence on
record to substantiate that the promoter had agreed to hand over
possession by 2013 which is a finding of fact. Although there is no
specific reference to the requirement of a written agreement, so as
to attract Section 18 of the Act of 2016, the Appellate Tribunal has
found that on the basis of the contractual arrangement, the
respondents have established the case of breach of Section 18. In
my considered view, apart from aforesaid findings the issue being a
question of law, which goes to the root of the matter, can be allowed
to be raised in the second appeal. It is well settled that normally the
Court would allow a pure question of law, which goes to the root of
the matter to be raised in the second appeal although not
specifically raised earlier. In that view of the matter, it is not
necessary to dwell on the various cases on which reliance is placed
by either of the parties, on the point of the permissibility of the said
ground being raised in the Second Appeal.
41. Section 2(c) defines an agreement for sale entered into
between the promoter and the allottee. It is necessary to note that
Section 2(c) does not say that an agreement has to be in writing
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entered between the promoter and the allottee. Section 13 provides
that no deposit or advance shall be taken by the promoter, without
first entering into the agreement for sale. Thus, the learned counsel
for the respondent is right that Section 13 has to be read in the
context of prohibition against the promoter from accepting the sum
in excess of 10% of the cost of the flat as an advance payment or an
application fee etc. Rule 10 of the 2017 Rules, specifically says that
for the purpose of sub-section (2) of Section 13 of the Act of 2016,
the agreement for sale shall be in conformity with the provisions,
rules and regulations made thereunder and shall be in accordance
with the model form of agreement at Annexure A. Thus, the
requirement of the agreement for sale being in conformity with
Annexure A of the 2017 Rules has also to be read in the context and
for the purposes of Section 13. Thus, there is a considerable force in
the argument on behalf of the respondents that Section 18 read with
Section 2(c) of the Act of 2016 which defines an agreement for sale
in terms do not provide for the requirement of a written agreement
of sale. It is necessary to emphasise that Section 13 which provides
for a prohibition against the promoter from accepting the sum in
excess of 10% of the cost of the apartment in explicit terms refers to
a written agreement for sale read with Rule 10 of 2017 Rules and
also prescribes the model agreement of sale. Had the legislature
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intended the agreement referred to in Section 18 also to be in
writing, nothing prevented it from doing so.
42. Thus, in my considered view, the reliance placed on
Section 13 read with Rule 10 of the 2017 Rules, in order to import
the requirement of a written agreement under Rule 18 read with
Section 2(c) of the Act of 2016 is misplaced. However, I do not
propose to lay down an absolute proposition of binding nature on
the said issue, in as much as the impugned judgment granting
refund of the consideration and interest can otherwise be sustained
on the basis of Section 12 of the said Act of 2016. I have already
held that Section 12 would also apply to the obligation of the
promoter regarding the information given and the representations
made prior to the registration of the project under the Act of 2016 as
ongoing project. Section 12 provides that where any person makes
an advance or a deposit on the basis of the information contained in
the notice, advertisement or prospectus or on the basis of any model
apartment, plot or building, as 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 of 2016. The proviso to Section 12 suggests
that if the person affected by such incorrect, false statement
contained in the notice, advertisement or prospectus, or the model
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apartment, plot or building, as the case may be, intends to withdraw
from the proposed project, he shall be returned his entire investment
alongwith interest at such rate as may be prescribed alongwith
compensation, in the manner provided under this Act of 2016. As
noticed earlier, in the present case, the impugned order only grants
refund of the consideration and interest.
43. In the present case, the Tribunal has found in para 37,
on the basis of the documents filed, that the lay out plan is modified
by the appellants without consent of the allottees and even the
amenities assured to be given at the time of the transaction on the
basis of advertisement, brochures etc. were refused to be given later
on. Thus, the Tribunal has found as a finding of fact that there is
sufficient documentary evidence on record to show that the
promoter has committed breach of Section 12. In para 74 the
Tribunal has found that there is sufficient evidence to substantiate
that the appellant had agreed to handover possession by 2017 and
the brochure of the project mention the date for ready to move in
possession as 2007 in both the towers ICC I and II. The Tribunal has
taken note of communications in which the respondents had
mentioned that the date of possession was 2017 and there was no
denial of the same by the appellants. It is true that there is no date
of possession mentioned in the booking application form / allotment
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letter nor there is an agreement of sale. However, the brochure
indeed mentions the date of possession as 2017. It is necessary to
note that Section 12 makes a reference to a notice, advertisement or
prospectus. The learned counsel for the appellants have referred to
the disclaimer in the brochure which reads thus-
Disclaimer : All specifications, conceptual designs,
dimensions, images, amenities and facilities shown
herein are for the purposes of representation only.
The same are subject to approval and changes without
any notice or intimation and shall not constitute an
offer and/or contract. The terms and conditions of
agreement for sale between the parties shall prevail
and be binding. Tolerance of +/- 3% is possible in
unit areas on account of design and construction
variances.
It is submitted that therefore the date of possession as
mentioned in the brochure which will be subject to the said
disclaimer. It is not possible to accept the said contention, in as
much as, the disclaimer refers to the specifications, conceptual
designs, dimensions, images, amenities and facilities which does not
include the date of possession. It was also contended that the
allottees have given different dates of possession and the
discrepancy would indicate that there was no such agreement. The
said contention also in my considered view cannot be accepted as
none of the allottees have mentioned the date beyond 2017. In my
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considered view, the finding of fact recorded by the Tribunal which
is a final fact finding authority, in the absence of said finding being
shown to be perverse and/or against the weight of record is not
susceptible to interference. In this case, at the time of registration,
the appellants notified the date for possession as 31 August 2018
which was revised to 31 August 2019. Indisputably, the part
occupation certificate (OC) was obtained for the first time in March
2019 and thereafter in June 2019. Thus, the OC was not obtained
even prior to the initial date as mentioned at the time of registration
i.e. 31 August 2018. Looked from any angle, the finding as recorded
by the Appellate Tribunal does not suffer from any infirmity.
44. A brief reference at this stage may be made to the cases
cited. It is true that in Lavasa Corporation Ltd. (supra) there was an
"Agreement to Lease" executed for a period of 999 years and the
learned Single Judge of this Court on facts held that it was really a
transaction of sale. In the case of G. Swaminathan and Neena
Wadia (supra) which arose under the MOFA, the question was
whether the agreement was required to be registered. Thus, both
these cases may not be of any assistance on the question of the
requirement of a written agreement for sale that too under the
provisions of the said Act of 2016.
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45. The cases of (i) Fortune Infrastructure (ii) Pioneer
Urban Land (iii) Kolkata West International City all arose under the
provisions of Consumer Protection Act of 2016. In Pioneer and
Kolkata West International City there were agreements executed
between the parties. However, what is relevant is that in Fortune
Infrastructure, the Supreme Court in the context of the complaint
filed under the Consumer Protection Act, where there was a delay in
delivery of possession and the project was transferred to another
entity has held in para 15 that a person cannot be made to wait
indefinitely for the possession of flats allotted to them. In the case
of Fortune Infrastructure, although there was an agreement
executed between the parties, there was no delivery period
stipulated in the agreement. This is what is held in para 15 of the
judgment.
Moreover, a person cannot be made to wait
indefinitely for the possession of the flats allotted to
them and they are entitled to seek the refund of the
amount paid by them, alongwith compensation.
Although we are aware of the fact that when there
was no delivery period stipulated in the agreement, a
reasonable time has to be taken into consideration. In
the facts and circumstances of this case, a time period
of three years would have been reasonable for
completion of the contract i.e. the possession was
required to be given by last quarter of 2014. Further,
there is no dispute as to the fact that until now there
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is no redevelopment of the property. Hence, in view
of the above discussion, which draws us to an
irresistible conclusion that there is deficiency of
service on the part of the appellants and accordingly
the issue is answered. When once this Court comes to
the conclusion that there is deficiency of services, then
the question is what compensation the respondent
complainants are entitled to ?
46. It is true that the case of Fortune Infrastructure involved
the claim of deficiency of service and compensation under the
Consumer Protection Act. However, as noted earlier, the Supreme
Court has held that the person in such circumstances, cannot be
made to wait indefinitely for the possession of flats allotted to him.
47. This takes me to the last point about the
pronouncement of the operative portion on 31 December 2019
followed by the reasons which were supplied on 13 March 2020. At
the outset, it may be mentioned that the contention on behalf of the
appellants that this amounts to deliver of two judgments / orders
cannot be accepted. However, at the same time, it is true that the
operative portion was pronounced in December 2019 and after two
and half months, the reasons were supplied. The Supreme Court in
the judgments cited have deprecated such practice. However, the
question is whether in the present case, the fact that the reasons
were supplied after two and half months is sufficient to set aside the
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impugned judgment. In the case of Balaji Mupade, the operative
order was pronounced on 21 January 2020 and as per the report of
the registry the reasons were supplied on 9 October 2020 i.e. after a
period of nine months which was much more than what has been
observed to be the maximum time after even pronouncement of
reserved judgment as per the case of Anil Rai. A Special Leave
Petition was filed in the interregnum in March 2020. In the case of
Anil Rai, the Supreme Court after invoking Section 353(1) of Cr.P.C.
noted that judgment in a criminal case has to be pronounced
immediately or at some subsequent time which period cannot
extend beyond six weeks. In R.C.Sharma, there was a delay of eight
months in delivery of the judgment and lastly in Bhagwandas, there
was a delay of nearly five years after the conclusion of the hearing.
In my humble opinion, although the practice of pronouncing of
operative order to be followed by the reasons, has not been
approved, it is only in two cases namely in case of Bhagwandas
(where the delay was of five years) and in Balaji Mupade (where the
delay was of 9 months before which the Petitioner had approached
the Supreme Court) the impugned judgments were set aside on the
sole ground of delay. In my considered view, although there is a
delay in supplying of reasons, which cannot strictly be approved, the
perusal of the judgment shows that the Appellate Tribunal has
considered the relevant aspects and it has not been shown on facts
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that on account of delay certain submissions and grounds which
were urged have not been considered by the Appellate Tribunal. In
that view of the matter, the said contention cannot be accepted in
the facts and circumstances of the present case.
48. Before concluding, I may note that the parties have
relied upon several judgments including the order passed by the
Delhi Authorities and the Appellate Tribunal. I have independently
gone through the judgment of the Division Bench of this Court in
Neelkamal Realtors and has found that the issue about the nature of
Section 18 and operation is no longer res integra and we have to
abide by the finding of the Division Bench in Neelkamal Realtors. I
have also found that Section 12 cannot be interpreted differently. On
behalf of the Appellant reliance is also placed on certain orders
passed by the Appellate Tribunal in other matters to show that in
those cases the Appellate Tribunal has ordered a remand. I am
afraid the said reliance is also misconceived. The question whether
remand is necessary or justified would depend on facts and
circumstance of each case and there are no universal principles
which can be deduced about the circumstances in which such
remand has to be ordered. Some of the judgments relied upon are
much prior in point of time to the enactment of the Act of 2016 and
I do not find it necessary to have a detailed reference to them, lest at
the cost of prolixity.
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49. In the result, the Appeals are hereby dismissed with no
order as to costs. In view of disposal of Second Appeals, the Interim
Applications are disposed of.
50. At this stage, the learned counsel for the Appellants
seeks stay of the impugned order passed by the Appellate Tribunal,
in order to enable the Appellants to take further steps as may be
advised.
51. The prayer is opposed on behalf of the Respondents. It
is pointed out that there was no interim relief operating during the
pendency of these Appeals. Therefore, there is no question of grant
and/or continuation of any interim relief after the dismissal of the
Appeals. The learned Senior counsel has however pointed out that
the Respondents have not as yet filed any proceedings, for execution
of the impugned judgment passed by the Appellate Tribunal.
52. Considering these circumstances and having regard to
the fact that there was no interim relief operating during the
pendency of the Appeal, the prayer for stay is hereby rejected.
C.V. BHADANG, J.
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