M/S Software Engineers And ... vs The Karnataka Real Estate ...
2023 Latest Caselaw 3306 Kant

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                                                        NC: 2023:KHC:20735
                                                         RERA.A No. 23 of 2023




                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU
                            DATED THIS THE 15TH DAY OF JUNE, 2023
                                            PRESENT
                             THE HON'BLE MR JUSTICE G.NARENDAR
                                              AND
                            THE HON'BLE MR JUSTICE C.M. POONACHA
                                  RERA APPEAL NO. 23 OF 2023


                   BETWEEN:

                   1.    M/S SOFTWARE ENGINEERS AND DOCTORS
                         HOUSING CO-OPERATIVE SOCIETY LTD.,
                         (A SOCIETY REGISTERED
                         UNDER THE KARNATAKA
                         CO-OPERTIVE SOCIETIES ACT, 1959),
                         EARLIER AT NO.514,
                         2ND CROSS, 5TH MAIN,
                         AMARJYOTHI LAYOUT,
                         (WEST WING), DOMLUR,
                         BANGALORE - 560071.

Digitally signed         PRESENTLY HAVING ITS
by NANDINI D             OFFICE AT NO.422, 1ST FLOOR,
Location: High           5TH MAIN, AMARJYOTHI LAYOUT,
Court of                 (WEST WING), DOMLUR,
Karnataka                BANGALORE-560071,
                         REP. BY ITS SECRETARY
                         SRI. G.C. NAGARAJA.

                   2.    K. HARIKRISHNA,
                         SON OF LATE SRI. K.C. DEVE GOWDA,
                         AGED ABOUT 50 YEARS,

                   3.    G.C. NAGARAJA,
                         SON OF SRI CHIKKAPPA G.B.,
                         AGED ABOUT 40 YEARS,
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                                    NC: 2023:KHC:20735
                                       RERA.A No. 23 of 2023




4.   SMT. CHARULATHA JAIN,
     WIFE OF LATE SRI P. SANJEEV,
     AGED ABOUT 53 YEARS,

5.   K.V. SRINADHA VARMA,
     SON OF SRI K. VENKATESHWARA RAJU,
     AGED ABOUT 46 YEARS,

     2 TO 5 EARLIER AT NO.514,
     2ND CROSS, 5TH MAIN,
     AMARJYOTHI LAYOUT,
     (WEST WING), DOMLUR,
     BANGALORE - 560071.

     PRESENT ADDRESS:
     NO.422, 1ST FLOOR, 5TH MAIN,
     AMARJYOTHI LAYOUT,
     (WEST WING), DOMLUR,
     BANGALORE - 560071.
                                               ...APPELLANTS


(BY SRI. C G GOPALASWAMY., ADVOCATE)


AND:

1.   THE KARNATAKA REAL ESTATE
     REGULATORY AUTHORITY,
     OFFICE AT: NO.1/14, 2ND FLOOR,
     SILVER JUBILEE BLOCK,
     UNITY BUILDING BACKSIDE,
     CSI COMPOUND,
     3RD CROSS, MISSION ROAD,
     BENGALURU-560027.
     REPRESENTED BY ITS SECRETARY.

2.   AJAY KUMAR,
     SON OF LATE SRI P.V.SIVAN NAIR,
     AGED ABOUT 53 YEARS,
     RESIDING AT 485 B,
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                                        NC: 2023:KHC:20735
                                         RERA.A No. 23 of 2023




      16TH CROSS, IDEAL HOMES TOWNSHIP,
      RAJARAJESHWARINAGAR,
      BANGALORE-560098.
                                               ...RESPONDENTS
(BY SRI. DEVAIAH I S., ADV. FOR R1,
 SRI. R.ANIL KUMAR, ADV. FOR R2.)

     THIS RERA.A IS FILED UNDER SECTION 58 (1) OF THE
REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016,
PRAYING TO CALL FOR RECORDS IN APPEAL NO. FR NO. (K-
REAT) 31/2023 IN THE REAL ESTATE APPELLATE TRIBUNAL AT
BENGALURU AND SET ASIDE THE ORDER DATED FEBRUARY
10, 2023, IN APPEAL NO. FR NO. (K-REAT) 31/2023 IN THE
REAL ESTATE APPELLATE TRIBUNAL AT BENGALURU ETC.

     THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
G.NARENDAR J., DELIVERED THE FOLLOWING:

                          JUDGMENT

Heard the learned counsel for the appellants, learned

counsel for the Karnataka Real Estate Regulatory Authority

and the learned counsel for private respondent.

2. The appeal is canvassed on a short point that

the appellate authority i.e., Karnataka Real Estate

Appellate Tribunal, Bengaluru, erred in rejecting the

appeal preferred by the appellants, for non-deposit of the

entire sum ordered by way of refund, interest and

compensation, questioning the correctness of the order of

the regulatory authority.

NC: 2023:KHC:20735 RERA.A No. 23 of 2023

3. Learned counsel for the appellants would

contend that in terms of sub-section (5) of Section 43 of

the Real Estate (Regulation and Development) Act, 2016,

(hereinafter referred to as 'the Act, 2016' for short), it

would suffice and meet the rigors of law if the promoter

deposits 30% of the penalty amount or such higher

amount as may be directed by authority.

4. Per contra, learned counsel for the private

respondent would contend that in terms of the judgment

rendered in the case of 'NEWTECH PROMOTERS AND

DEVELOPERS PVT. LTD. Vs. STATE OF UP AND

OTHERS1, the Hon'ble Apex Court has laid down the law

that insofar as the penalty alone, a discretion is vested in

the authority to entertain an appeal on deposit of 30% of

the amount imposed as penalty or such higher sum as

may be determined by the authority. On the other hand,

he would contend that in the event, there is an order to

refund the consideration amount deposited by the allottee

2021 SCC ONLINE SC 1044

NC: 2023:KHC:20735 RERA.A No. 23 of 2023

then in such a circumstance, the promoter is required to

deposit the entire amount ordered to be refunded

including the interest and compensation that may also be

awarded. In this regard, he would place reliance on the

ruling of the Hon'ble Apex Court in the case of Newtech

Promoters and Developers Pvt. Ltd. (supra).

5. In the above background, the question that

arises for our consideration is "whether the authority

under the Act, 2016, has a discretion to waive the deposit

of the entire sum ordered to be refunded or whether the

authority under the Act, 2016, has discretion to order

deposit of a sum lesser then the sum directed to be

refunded, including interest and compensation ?".

6. The answer to the above issues is not very far

to seek. Paragraph Nos.122, 127 and 128 of the judgment

rendered by the Hon'ble Apex Court clearly obviates any

discussion on the issue. Paragraph No.122 reads as

under:-

NC: 2023:KHC:20735 RERA.A No. 23 of 2023

"122. Before we examine the challenge to the proviso to Section 43(5) of the Act of making pre-deposit for entertaining an appeal before the Tribunal, it may be apposite to take note of Section 43(5) of the Act, 2016. Section 43(5) reads as follows:--

            "43.    Establishment       of    Real   Estate
          Appellate Tribunal-
            .......

(5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:

Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal at least thirty per cent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard.

Explanation - For the purpose of this sub- section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force."

7. Proceeding further, the Hon'ble Apex Court has

also reasoned the object behind the rigor of the provisions

of sub-section (5) of Section 43 of the Act. On a plain

reading, it is apparent that the Tribunal is vested with the

jurisdiction to partially waive the pre-deposit of the

NC: 2023:KHC:20735 RERA.A No. 23 of 2023

amount imposed on the promoter by way of penalty only.

Insofar as the amounts made due from the promoter

under the head of refund of the consideration received,

delay compensation and interest, if any awarded, the

same is required to be made by way of pre-deposit in

order to enable the authority to hear any appeal by the

promoter and the issues are answered accordingly.

8. Learned counsel for the promoter would submit

that the claim itself is not maintainable in view of the fact

that the claimant is a member of the society. In other

words, being a member of the society and the project

envisaged by the Society being for the members, including

claimant-respondent, could not have maintained a claim

for compensation as the fact remains that any amounts

made payable is to be paid out of the funds of the Society

and he would submit that the complaint itself is not

maintainable.

9. That apart, he would also point out the conduct

of the claimant and would submit that the claimant, who is

NC: 2023:KHC:20735 RERA.A No. 23 of 2023

comfortable with the price originally fixed and when the

allotment prices were sought to be revised in 2014, the

respondent has defaulted and ultimately three years

thereafter, attempted to wriggle out of the contract and

the award of interest from 2009 also is impermissible and

illegal. These are issues that relate to the merit of the

appeal, which we do not intend to enter upon and

adjudicate at the present stage and the same is let to be

adjudicated by the competent forum. In view of the above,

appeal stands dismissed as not maintainable.

10. Learned counsel for the appellants brings to our

notice that the private respondent/claimant have been

parallelly maintaining proceedings before the consumer

forum despite the authority having granted relief and is

continuing prosecuting the same. In our considered

opinion, the same amounts to abuse of the due process.

The proceedings result in consequences and it is settled

law that a party cannot maintain proceedings parallelly for

a similar relief. It is high time that parties should be made

NC: 2023:KHC:20735 RERA.A No. 23 of 2023

known that such abuse of the process would not be

condoned by the Courts and the same is liable to be

visited with an iron hand.

11. It is fairly submitted that the proceedings

before the Consumer Forum were initiated prior to the

proceedings before the RERA. The proviso to sub-section

(1) of Section 71 of the Act, 2016 mandates that it is

permissible for a complainant to initiate proceedings

before the RERA subject to him withdrawing the complaint.

The pendency of the complaint goes to the very root of the

matter, which the authority appears to have glossed over

and lost sight of. The very maintainability falls into

question. It is unfortunate that the authority has lost sight

of such a fundamental issue. Accordingly, the issues are

left open to be considered by the appropriate forum.

Sd/-

JUDGE

Sd/-

JUDGE