Karnataka High Court
M/S Mangal Reality vs Nandkumar on 25 September, 2025
Author: H.P.Sandesh
Bench: H.P.Sandesh
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RERA.A No. 200001 of 2025
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IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 25TH DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. JUSTICE H.P.SANDESH
AND
THE HON'BLE MR. JUSTICE T.M.NADAF
RERA APPEALS NO.200001 OF 2025
BETWEEN:
M/S MANGAL REALITY,
REPRESENTED BY ITS MANAGING DIRECTOR,
HAVING ITS REGISTERED OFFICE AT A2 AND A3,
SHIVASHARAN SANKIRAN,
KHUBA PLOT,
COURT ROAD,
KALABURAGI-585 103.
...APPELLANT
Digitally signed
by
BASALINGAPPA (BY SRI. PREETAM DEULGAONKAR, ADVOCATE)
SHIVARAJ
DHUTTARGAON
Location: HIGH
COURT OF
KARNATAKA
AND:
NANDKUMAR S/O LATE SHARANAPPA NAREL,
AGED ABOUT 45 YEARS,
OCC: SOFTWARE ENGINEER,
R/O. FLAT No. G-11,
SRI SAI ENCLAVE,
4TH CROSS, THULASI LAYOUT,
KASAVANAHALLI, BENGALURU-560 035.
...RESPONDENT
(RESPONDENT NANDKUMAR - SERVED)
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RERA.A No. 200001 of 2025
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THIS RERA APPEAL IS FILED U/S. 58 OF THE KARNATAKA
REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016,
PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER
DATED 28.01.2025 PASSED BY THE KARNATAKA REAL ESTATE
APPELLATE TRIBUNAL BANGALORE IN APPEAL (K-REAT)
NO.42/2023 AND CONFIRM THE ORDER DATED 19.12.2022
PASSED BY THE KARNATAKA REAL ESTATE REGULATORY
AUTHORITY IN COMPLAINT NUMBER CMP/190104/0001825, IN
THE INTEREST OF JUSTICE AND SUBSEQUENTLY DISMISS THE
COMPLAINT OF THE FIRST RESPONDENT. KINDLY GRANT ANY
OTHER RELIEF TO THE APPELLANT IN CONSIDERATION OF THE
FACTS AND CIRCUMSTANCES OF THE PRESENT CASE.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 23.08.2025 AND COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT', THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
AND
HON'BLE MR. JUSTICE T.M.NADAF
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE T.M.NADAF)
This second appeal is filed by the Promoter under
Section 58 of the Real Estate (Regulation and
Development), 2016 (for short, 'the Act, 2016') calling in
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question the order dated 28.01.2025 in Appeal (K-REAT)
No.42/2023 passed by the Karnataka Real Estate
Appellate Tribunal, Bengaluru, whereby the appeal filed by
the allottee comes to be allowed setting aside the
judgment dismissing the complaint being
CMP/190104/0001825 dated 19.12.2022 by the
Adjudicating Authority.
2. Though this appeal is listed for admission, with
the consent of learned counsel for the appellant as the
respondent is served and unrepresented, taken up for final
disposal.
3. The brief outline of fact leading to the filing of
this second appeal are as under:
The respondent/allottee (hereinafter referred to as
'allottee') had booked a plot bearing No.75, measuring
4000 sq. ft. in a Real Estate Project, known as 'Gita
Nagar', developed by the appellant - M/s. Mangal Reality
(hereinafter referred to as 'Promoter'). Both the parties
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have entered into an agreement dated 02.01.2012,
wherein sale consideration was fixed at Rs.14,20,000/-,
payable in 59 monthly installments, commencing from
03.01.2012. The allottee has paid a sum of Rs.10,05,000/.
As there was delay on the part of the Promoter in
executing the Project within the time stipulated, the
allottee did not paid the subsequent EMIs towards sale
consideration, subsequently, offered a plot measuring
3874 sq. ft. lesser than the one for which the agreement
was executed. That apart, the Promoter sought extra
payment and additional amount. Accordingly, the allottee
filed a complaint before the Regulatory Authority seeking a
direction to hand over the possession of the plot and
interest on delayed period and direction to complete the
Project.
4. Subsequent to registering the complaint, in
response to the notice, the promoter appeared through its
counsel before the Regulatory Authority and filed
statement of objections admitting the fact that there was
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an agreement dated 02.01.2012 for sale of plot No.75
(New No.91) in the Project namely, 'Gita Nagar'. In the
agreement itself, it was made clear by the promoter to the
allottee, that in addition to payment of sale consideration,
he will have to pay additional sum towards Government
levies and development charges etc. for the said plot. The
allottee required to pay all the installments in timely
manner, however he has defaulted. Vide communication
dated 09.08.2013, when the same was demanded along
with delay charges, but, the allottee has failed to pay
remaining installments even after repeated reminders.
5. The plot No.75 earlier allotted for which the
agreement was entered. In the agreement, the
measurement of the said plot was shown as 4000 sq. ft.
i.e., prior to the sanction of the layout plan. However, as
per the sanctioned layout plan, the measurement of the
plot had been reduced to 3877 sq. ft. which the Promoter
taken into consideration, proportionately reduced the total
price by Rs.355/- per sq. ft. and reduced the sum to an
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extent of Rs.44,730/- out of Rs.14,20,000/-, fixed under
the agreement. As per the Promoter, the Urban
Development Authority, Kalaburagi on 07.10.2015
sanctioned the layout plan for the development of halted
development Project consisting 329 sites of various
dimensions and 40% of the said sites i.e., 132 sites were
released for sale. The EMI commenced from the date of
agreement and ended on 02.01.2017 i.e., after the
completion of 59th month. The release of plot bearing
No.91 to the allottee had been obtained as on 31.12.2016
and duly intimated to the allottee. As per Clause-12 of the
Agreement, the allottee required to pay Government levies
to an extent of Rs.44,955/-. Since there is delay in
payment and additional charges towards Government levy,
the Promoter issued a legal notice on 08.07.2022
canceling the plot allotted to the allottee for non-
adherence to payment conditions, which is in terms of
Clause No.8 contained in the Agreement. The Clause No.8
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is reproduced by us as depicted in para No.11 of the
Appellate Court judgment, reads as under:
"8. That, it is agreed if the Second party fails to pay
three installments his membership will be Cancelled
and the installments already paid by Second Party
stands forfeited to the First Party as damages for
breach of contract as Second Party failed to make the
payment in time as agreed."
6. Upon submission of pleadings, the Karnataka
Real Estate Regulatory Authority proceeded to hear the
parties and subsequently passed the judgment, whereby
dismissed the petition holding that the allottee is not
entitled for the relief claimed. The Regulating Authority
further observed that the relief of compensation for mental
agony does not come under the purview of the Regulating
Authority. The allottee required to file complaint before
the Adjudicating Officer, RERA for claiming such relief.
Accordingly, proceeded to dismiss the complaint.
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7. Feeling aggrieved by the said judgment, the
allottee preferred an appeal under Section 44 of the Act,
2016 before the Karnataka Real Estate Appellate Tribunal,
Bengaluru (for short, 'the Appellate Tribunal'). Before the
Appellate Tribunal, the allottee has contended that in view
of delay in Project and offering the site which is lesser in
dimensions than the one under the agreement entered
into, though the allottee has paid more than 75% of the
amount towards sale consideration. In view of delay, the
allottee on several occasion intimated the Promoter the
reason for delayed payment and had also stated that there
is default committed by both the parties i.e., allottee as
well as the Promoter. The reason for non-payment is
delayed execution of Project work and allotment of site in
plot No.91 instead of plot No.75 in a reduced
measurement i.e., 3875 sq. ft. instead of 4000 sq. ft. and
the Promoter had demanded additional payments under
the guise of Government levy. When the plot was
demanded along with interest, the same was unilaterally
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cancelled by the Promoter invoking Clause No.8 of the
agreement without there being any reason for forfeiting
the amount, paid towards the sale consideration. This
aspect of the matter has not been properly considered by
the Regulatory Authority which has resulted in dismissing
the complaint causing miscarriage of justice to the
allottee, who had made payments of nearly 75% of total
sale consideration.
8. The Promoter refuted the submissions of the
learned counsel for the allottee before the Appellate
Tribunal contending that the Regulatory Authority having
considered the materials placed before it and in view of
breach of Clause No.8 comes to a right conclusion that
there is fault committed by the allottee in making the
regular payments and accordingly held that he is not
entitled for any relief at the hands of Regulatory Authority
and for the complaint of compensation for mental agony
and other as contended by the allottee, relegated him to
file necessary application before the Adjudicating Authority
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as contemplated under the provisions of the Act, 2016.
The said judgment does not call for any interference at the
hands of the Appellate Authority as the same is well
reasoned and sought to dismiss the appeal.
9. The Appellate Tribunal after hearing both sides,
formed a point for consideration as to whether the
Appellant/allottee proves that the Authority was not
justified in dismissing the complaint and answered the
point No.1 partly in affirmative holding that the dismissal
of the complaint is unjustified, whereby allowed the
appeal, setting aside the judgment passed by the
Regulatory Authority dated 19.12.2022 stated supra and
modified the impugned order, directing the respondent/
Promoter to execute the full-fledged sale deed in favour of
the allottee receiving a sum of Rs.4,15,225/- which
includes Rs.3,70,270/- towards the sale consideration and
Rs.44,955/- towards Government levy within a period of
three months from the date of receipt of copy of the
judgment.
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10. Calling in question this order passed by the
Appellate Tribunal, the Promoter is before this Court in this
second appeal.
11. Heard Sri Preetam Deulgaonkar, learned
counsel appearing for the appellant. Respondent though
served unrepresented.
12. Sri Preetam Deulgaonkar vehemently submitted
that the Appellate Tribunal failed to consider well reasoned
judgment of the Regulatory Authority, wherein the
Regulatory Authority considering Clause No.8, which
clearly prescribes that in the event any default in paying
three installments by the member, the agreement would
be cancelled and all the installments already paid stands
forfeited in favour of the Promoter as damages for breach
of contract in view of failure on the part of second party to
make payment in time as agreed, dismissed the
complaint. There is no delay caused by the
appellant/Promoter as alleged. The Promoter in terms of
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law, got sanctioned the plan, however in view of changed
plan, there is reduction in the measurement of the site
which he has intimated to the allottee and also agreed to
deduct the amount towards reduced measurement to an
extent of Rs.355/- per sq.ft. and re-fixed the sale
consideration only to the extent 3875 sq. fq. instead of
4000 sq. ft. He has given intimation subsequent to
change of sanction plan. There is a delay on the part of
the allottee in payment of regular installments. Despite
several reminders, there is no payment. Since February
2016, there is total stoppage of installments. The Project
was completed as agreed in the agreement within the
stipulated time. It is the allottee who has defaulted in
making the proper payments. This in terms of Clause-8
amounts to a breach of conditions and failure on the part
of the allottee, entitling the Promoter to cancel the
allotment as well as forfeiting the amounts already paid
towards sale consideration. This aspect of the matter has
not been properly considered by the Appellate Tribunal.
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The Appellate Tribunal swayed, on the aspect that the
RERA Act is a social legislation enacted to protect the
interest of home buyers and promote transparency,
accountability in the real estate sector and this aspect has
been failed to consider by the Regulatory Authority. That
apart, the reason for the Appellate Tribunal to consider the
case of the allottee is the e-mail sent on 05.11.2018,
wherein the allottee has stated that the Project was
supposed to get completed by January, 2017 was actually
completed in March, 2018. There was delay of 13 months
from January, 2017 and the allottee has further stated
that he has paid Rs.10,05,000/- towards the sale
consideration, he has also stated in the said e-mail that
the delay charges on Rs.10,05,000/- be adjusted towards
the delay charges for the remaining amount to be paid by
him and after re-calculating the said sums to the plot, he
is ready to pay the amount. This has taken the Appellate
Tribunal to hold that the order passed by the Regulatory
Authority dismissing the appeal as unjustified. Further, to
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hold that the cancellation by the Promoter and forfeiture of
the amount is highly arbitrary when considerable amount
towards the sale deed has already been paid. Accordingly
sought that the appeal deserves to be allowed setting
aside the judgment passed by the Appellate Tribunal.
13. To buttress his argument, the learned counsel
appearing for the appellant relied on the judgment of the
Hon'ble Apex Court in the case of M/s. Newtech
Promoters and Developers Pvt. Ltd. Vs. State of U.P.
and Others etc.1 and stressed on para No.80, which we
reproduce as under:
"80. The further submission made by learned
counsel for the appellants that if the allottee
has defaulted the terms of the agreement and
still refund is claimed which can be possible,
to be determined by the adjudicating officer.
The submission appears to be attractive but is
not supported with legislative intent for the
reason that if the allottee has made a default
either in making installments or made any
C.A.No.6745-6749 of 2021
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breach of the agreement, the promoter has a
right to cancel the allotment in terms of
Section 11(5) of the Act and proviso to sub-
section 5 of Section 11 enables the allottee to
approach the regulatory authority to question
the termination or cancellation of the
agreement by the promoter and thus, the
interest of the promoter is equally
safeguarded."
14. Having heard the learned counsel for the
appellant, perused the entire appeal papers, the only
question that would arise for consideration is:
Whether the appellant has made out any
case to consider the appeal on any
substantial question of law to answer even
to admit the appeal to answer his claims?
15. Our answer to the above point for consideration
is in 'Negative' for the following:
REASONS
16. Before dwelling on the point for consideration, it
is profitable to answer on the power under Section 58 of
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the Act, 2016. As per Section 58 of the Act, 2016, to
maintain an appeal before this Court which is as good as a
regular second appeal within the meaning of Section 100
of CPC, the appeal must contain substantial question of
law, involved in the case. For easy reference, we
reproduce Section 58 of the Act, 2016, which reads as
under:
"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 (5 of 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.
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(2) No appeal shall lie against any decision or
order made by the Appellate Tribunal with the
consent of the parties."
17. To the query of Court's question, the appellant
has submitted that he has raised point for consideration
totally seven in number and same be read as substantial
question of law.
18. As could be seen from the records, it is clear
that there was an agreement dated 02.01.2012 between
the allottee and the Promoter for allotment of a site
bearing No.75, measuring 4000 sq. ft. and sale
consideration was fixed at Rs.14,20,000/- which is to be
paid in 59 equal monthly installments by the allottee to
the Promoter. As per Clause-12 of the Agreement, the
allottee apart from paying sale consideration is required to
make good the Government levy, if any, to be paid as
agreed in the said agreement.
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19. It is also on record and not disputed by the
Promoter, that a sum of Rs.10,05,000/- paid towards sale
consideration. It is also not in dispute that earlier site
No.75 being changed to site No.91 as also the
measurement of the same reduced to 3875 sq. ft. from
4000 sq. ft. It is also not in dispute that the balance to be
paid towards the sale consideration after deducting the
amount towards the measurement reduced would be
Rs.3,70,270/-. It is also not in dispute that the allottee is
required to pay additional sum of Rs.44,955/- towards
Government levy. The e-mail sent by the allottee which
has been reproduced by the Appellate Tribunal in para
No.15 clearly states that there is a delay in executing the
project within the stipulated time and non-disclosers of
particulars sought by the Promoter; so also there is delay
on the part of the allottee to pay the installments agreed
by him. The fact remains that a considerable amount
nearly to 75% has already been paid by the allottee
towards the sale consideration for the site allotted in his
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favour. In view of changed circumstances, the allottee is
required to pay reduced amount towards the sale
consideration. The balance payable by him is only
Rs.3,70,270/- along with Government levy which is fixed
at Rs.44,955/-. The clause which has been referred by the
Appellate Tribunal in paragraph No.11 clearly states that if
there is a failure to make three installments, the
membership will be cancelled and the installments already
paid would be forfeited as damages for breach of contract
for the failure of the allottee to pay the installments.
20. In the peculiar facts and circumstances of the
case where 75% of sale consideration has been paid, the
rest is withheld only for the reason that there is delay in
completing the project. As per the agreement, the project
required to be completed on or before, January, 2017.
The shortcomings pointed by the allottee towards
Promoter is, he has not supplied the required particulars in
terms of Section 11 of the Act, 2016 and Rule 15 of the
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Karnataka Real Estate (Regulation and Development)
Rules, 2017 (hereinafter referred to as the Rules, 2017)
21. In view of the same, since there is shortfall
attributable to both the parties, none of the parties are
entitled for any interest as contemplated under Sections
16 and 17 of the Act, 2016. The allottee by his e-mail has
clearly stated the reason for delayed payment and also
has requested to adjust the delayed charges on
installment towards the delay charges payable to the
Promoter by him for delay in handing over the possession.
The agreement was entered in the year 2012, whereas the
plan was sanctioned in the year 2015. The plot agreed to
be allotted was bearing No.75, measuring 4000 sq. ft. that
has been reduced to 3875 sq. ft. and entire plot has been
changed to plot No.91 though the promoter has now
agreed for reduced rate than the one fixed earlier and
nothing is placed by the Promoter to say that the entire
project has been completed without there being any
shortfalls on the part of the Promoter. This aspect of the
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matter has been missed by the Regulating Authority which
has been considered by the Appellate Authority.
22. No doubt, it is true that the Act, 2016 is
enacted with the object to safeguard the interest of both
the parties and give a transparency in the transaction and
security to both the parties. The paragraph No.80 in M/s
M/s. New Tech Promoters (supra), relied on by the
appellant clearly shows that the Promoter under the
provisions has a right to cancel allotment owing to default
attributable to allottee in terms of the agreement towards
the payment and the allottee can approach the Regulatory
Authority to question the termination or cancellation of
agreement by the Promoter. Accordingly, in this context
the Hon'ble Apex Court has observed that under the Act,
2016, the interest of the Promoter is equally safeguarded,
but the same cannot be construed as the allottee bound to
pay interest on the delayed payment as argued by the
learned counsel Sri Preetham.
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23. The appellant has not placed any material on
record to show that he has made any application seeking
for interest as contemplated under Section 16 of the Act,
2016. Even there is nothing on record, to suggest that
there is an order by the Regulatory Authority, that the
appellant is entitled for interest on the delayed payment.
The Appellate Tribunal safeguarded the interest of both
parties taking into consideration the default committed by
both the parties in directing the appellant to execute the
full-fledged sale deed after receipt of entire amount stated
in the order including the Government levy by the allottee
within three months from the date of receipt of copy of the
order.
24. The Hon'ble Apex Court in M/s. New Tech
Promoters (supra) extensively considered the object and
provisions of the Act of 2016 in Paragraph Nos.9 to 37.
The object with which the Act, 2016, enacted indicates
that primary position of the Regulatory Authority is to
regulate the real estate sector having jurisdiction to
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ensure compliance with the obligation cast upon on the
Promoters. The opening statement of objects and reasons
with which the Act enacted reads as under:
" The real estate sector plays a catalytic
role in fulfilling the need and demand for housing
and infrastructure in the country. While this
sector has grown significantly in recent years, it
has been largely unregulated, with absence of
professionalism and standardisation and lack of
adequate consumer protection. Though the
Consumer Protection Act, 1986 is available as a
forum to the buyers in the real estate market,
the recourse is only curative and is not adequate
to address all the concerns of buyers and
promoters in that sector. The lack of
standardisation, has been a constraint to the
healthy and orderly growth of industry.
Therefore, the need to regulating the sector has
been emphasised in various forums.
2. In view of the above, it becomes necessary to
have a Central legislation, namely, the Real
Estate (Regulation and Development) Bill, 2013,
in the interest of the effective consumer
protection, uniformity and standardisation of
business practices and transactions in the real
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estate sector. The proposed Bill provides for the
establishment of the Real estate Regulatory
Authority (the Authority) for regulation and
promotion of real estate sector and to ensure
sale of plot, apartment or building, as the case
may be, in an efficient and transparent manner
and to protect the interest of consumers in real
estate sector and establish the Real Estate
Appellate Tribunal to hear appeals from the
decisions, directions or orders of the Authority."
25. As such, it is clear from the statement of object
and reasons, the Act was introduced with an object to
ensure greater accountability towards consumers, to
significantly reduce frauds and delays and also the current
high transaction costs, and to balance the interests of
consumers and promoters by imposing certain
responsibilities on both, and to bring transparency of the
contractual conditions, set minimum standards of
accountability and a fast-track dispute resolution
mechanism. It also proposes to induct professionalism
and standardization in the sector, thus paving the way for
accelerated growth and investments in the long run.
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Some of the important objects and reasons stated to
impose, relevant to mention here are:
"4. xxxxx.
d) to impose liability upon the promoter to
pay such compensation to the allottees, in
the manner as provided under the proposed
legislation, in case if he fails to discharge any
obligations imposes on him under the
proposed legislation.
(f) the functions of the Authority shall, inter
alia, include - (i) to render service to the
appropriate Government in matters relating
to the development of real estate sector; (ii)
to publish and maintain a website of records
of all real estate projects for which
registration has been given, with such details
as may be prescribed; (iii) to ensure
compliance of the obligations cast upon the
promoters, the allotees and the real estate
agents under the proposed legislation.
xxx
(i) to appoint an adjudicating officer by the
Authority for adjudging compensation under
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sections 12, 14 and 16 of the proposed
legislation."
26. Now looking to the point for consideration
raised in the appeal as per the appellant are the
substantial question of law involved in this appeal, we find
all the points for consideration framed by the appellant are
on facts. None of the points for consideration raised by
him suggest involving any substantial question of law.
27. The finding of the Appellate Tribunal is on
material fact placed before it. The clause No.8 as
contended by the appellant cannot be stretched too far to
make unjust enrichment in a case where 75% of amount
of sale consideration has been paid and balance withheld
for short of execution of the Project in time and non-
furnishing of particulars sought by the allottee. As there is
no substantial question of law involved in the appeal, the
same deserves to be dismissed. We find no reasons to
interference with the judgment passed by the Appellate
Tribunal which has properly considered the case put-forth
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by the parties even taking into consideration the Clause-8
as well as Clause No.12 in the agreement so also Section
11 of the Act, 2016. We find no infirmities in the order
passed by the Appellate Tribunal.
28. The learned counsel Sri Preetam Deulgaonkar
while arguing the matter had submitted that the direction
issued is with regard to payment of amount by the allottee
within three months and thereafter the appellant to
execute the sale deed. However, the allottee without
making payment approached the Appellate Tribunal and
keeping the Promoter exparte, the Appellate Tribunal
directed the party to approach Civil Court to execute the
Award and in terms of such direction, execution notice has
been issued by the Civil Court executing the order passed
by the Appellate Court. The allottee is duty bound to
make the payment first to seek for execution of sale deed,
sought that and this requires clarification.
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29. For the foregoing reasons, we find no
substantial question of law involved in the appeal, the
same sans merits, accordingly dismissed, however, with
an observation that in terms of the order passed by the
Appellate Tribunal for the Promoter to execute the sale
deed within the time bound period, the allottee required to
make the balance amount stated in the order i.e., in total
Rs.4,15,225/- first, which includes a sum of Rs.3,70,270/-
towards balance sale consideration and Rs.44,955/-
towards Government levy.
With the above observations, the appeal stands
dismissed.
Sd/-
(H.P.SANDESH)
JUDGE
Sd/-
(T.M.NADAF)
JUDGE
BL
CT: AK
