Kerala High Court
M/S Artech Realtors Private Limited vs Savithri. K on 6 January, 2025
2025:KER:5724
MSA Nos.7 & 13 of 2024
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE VIJU ABRAHAM
MONDAY, THE 6TH DAY OF JANUARY 2025 / 16TH POUSHA, 1946
MSA NO. 7 OF 2024
AGAINST THE ORDER/JUDGMENT DATED 14.02.2024 IN REFA
NO.22 OF 2024 OF KERALA REAL ESTATE APPELLATE TRIBUNAL,
ERNAKULAM ARISING OUT OF THE ORDER/JUDGMENT DATED 28.12.2023
IN CP NO.3 OF 2023 OF KERALA REAL ESTATE REGULATORY AUTHORITY,
THIRUVANANTHAPURAM
APPELLANT/S:
1 M/S ARTECH REALTORS PRIVATE LIMITED
REPRESENTED BY T.S.ASOK, ARTECH HOUSE, T.C NO.
24/2014(1), NEAR TAJ VIVANTA, THYCAUD,
THIRUVANANTHAPURAM, PIN - 695014
2 T.S ASOK
AGED 57 YEARS
ARTECH REALTORS PRIVATE LIMITED, ARTECH HOUSE, T.C
NO. 24/2014(1), NEAR TAJ VIVANTA, THYCAUD,
THIRUVANANTHAPURAM, PIN - 695014
3 LEKHA THANKAMONY AMMA
AGED 49 YEARS
T.C NO. 24/2014(1), ARTECH HOUSE, THYCAUD P.O,
THIRUVANANTHAPURAM, PIN - 695014
BY ADV K.M.SATHYANATHA MENON
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MSA Nos.7 & 13 of 2024
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RESPONDENT:
SAVITHRI. K
W/O SALAHUDEEN, DOOR NO 7A, ARTECH EMPIRE FLATS,
PATTOOR JN, VANCHIYOOR, THIRUVANANTHAPURAM, PIN -
695035
BY ADVS.
H.VISHNUDAS
O.V.RADHAKRISHNAN (SR.)
PATHIRIPALLY S.KRISHNAKUMARI
REVATHY R NAIR
OTHER PRESENT:
SC- C M NAZAR
THIS MISC. SECOND APPEAL HAVING BEEN FINALLY HEARD ON
19.11.2024, ALONG WITH MSA.13/2024, THE COURT ON 06.01.2025
DELIVERED THE FOLLOWING:
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MSA Nos.7 & 13 of 2024
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE VIJU ABRAHAM
MONDAY, THE 6TH DAY OF JANUARY 2025 / 16TH POUSHA, 1946
MSA NO. 13 OF 2024
AGAINST THE ORDER/JUDGMENT DATED 26.03.2024 IN REFA NO.22 OF
2024 OF KERALA REAL ESTATE APPELLATE TRIBUNAL, ERNAKULAM
APPELLANTS:
1 M/S ARTECH REALTORS PRIVATE LIMITED,
REPRESENTED BY T.S.ASOK, T.C NO. 24/2014(1), ARTECH HOUSE,
THYCAUD PO, THIRUVANANTHAPURAM,, PIN - 695014
2 T.S ASOK
ARTECH REALTORS PRIVATE LIMITED, T.C NO. 24/2014(1),
ARTECH HOUSE, THYCAUD PO, THIRUVANANTHAPURAM, PIN - 695014
3 LEKHA THANKAMONY AMMA
T.C NO. 24/2014(1), ARTECH HOUSE, THYCAUD PO,
THIRUVANANTHAPURAM, PIN - 695014
BY ADV K.M.SATHYANATHA MENON
RESPONDENT:
SAVITHRI. K,
W/O SALAHUDEEN, RESIDING AT DOOR NO 7A, ARTECH EMPIRE
FLATS, PATTOOR JN, VANCHIYOOR PO, THIRUVANANTHAPURAM, PIN
- 695035
BY ADVS.
H.VISHNUDAS
PATHIRIPALLY S.KRISHNAKUMARI
O.V.RADHAKRISHNAN (SR.)
THIS MISC. SECOND APPEAL HAVING BEEN FINALLY HEARD ON
19.11.2024, ALONG WITH MSA.7/2024, THE COURT ON 06.01.2025 DELIVERED
THE FOLLOWING:
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"CR"
VIJU ABRAHAM, J.
-- -- -- -- -- -- -- -- -- -- -- -- --
MSA Nos.7 & 13 of 2024
-- -- -- -- -- -- -- -- -- -- -- -- --
Dated this the 6th day of January, 2025
JUDGMENT
Since a common issue is involved in these appeals, both are
heard and disposed by this common judgment.
2.Brief facts necessary for the disposal of these appeals are as
follows:
Appellants are the respondents in CCP No.3/2023 on the files
of the Real Estate Regulatory Authority, Thiruvananthapuram, filed
by the respondent herein under section 31 read with section 71 of
the Real Estate [Regulation and Development] Act 2016, [for short
'the Act 2016'], claiming compensation against the respondents
therein. The respondent is an allotee of a flat constructed by the
appellants and she has applied to purchase residential apartment
No.11C and 11D in "Artech The Address" at Kuravankonam,
Trivandrum. Thereafter, appellants 1 and 2 anticipating delay in
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MSA Nos.7 & 13 of 2024
completing the project, made an alternative offer to sell residential
apartment No.7A having 3200 sq. ft. along with 1.22 cents
undivided share and a car park for a total amount of
Rs.1,77,00,000/- in "Artech Empire" apartment complex with the
assurance to give possession and transfer the said apartment
within 20 months of signing the construction agreement and
respondent agreed for the same. There occured a delay in handing
over the possession and title of the building and land. Thereupon a
claim petition as CCP No.3/2023 was preferred. The Adjudicating
officer framed the following points for consideration:
(i) Whether the complainant is entitled to get Rs.26,55,000/-
compensation under the head of loss suffered by her for the
delay in 18 months as prayed?
(ii) Whether the complainant is entitled to get Rs.10,80,000/-
for the loss of rental income at the rate of 30,000/- per
month for 36 months from 27.12.2018 till date since not
registered the sale deed as prayed?
(iii) Whether the complainant is entitled to get compensation
of Rs.1,00,00,000/-(1 crore) as compensation for the
shortage of 1.98 cents of undivided share in A schedule as
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MSA Nos.7 & 13 of 2024
prayed?
(iv)Whether the complainant is entitled to get Rs.5,40,000/-
paid as rent due to the delay of 18 months as prayed?
(v) Whether the complainant is entitled to get Rs.10,00,000/-
for the violations of obligations, concealment and
misrepresentation of factum of construction of mall
encroachment of 10 cents of property and caused
disturbance to the peaceful possession and enjoyment by
blocking free flow of air and sunlight and illegal use of
incinerator on the terrace portion of the mall, 8 th floor,
caused severe sickness to the complainant as prayed?
(vi) Relief and cost
The respondent was examined as CWI through Advocate
commission and Exts. A1 to Ext A22 were marked. From the side of
appellants no oral or documentary evidence were adduced. After
completion of the evidence and hearing the adjudicating officer
found as follows:
i) Point No: 1 against the respondent as without any basis
and not supported by oral or documentary evidence.
ii) Point No: 2 against the appellants finding that there
occurred delay in registration and respondent lost the
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chance of availing loan from financial institution due to non-
registration and accordingly Rs. 5,00,000/- was awarded as
compensation.
iii) Point No: 3 against the respondent as without any basis
and not supported by oral or documentary evidence.
iv) Point No: 4 in favour of the respondent and the
adjudicating officer accepting the rent at the rate of
Rs.30,000/- per month awarded rent for the period from
December 2017 to December 2018 i.e for 13 months
computed at Rs.3,90,000/- with statutory rate of interest.
v) Point No: 5 was found in favor of the respondent and she
was found entitled to Rs.5,00,000/- as compensation for the
inconvenience caused due to the construction of mall above
4 floor.
Thus the adjudicating officer allowed the claim petition and found
that the respondent is entitled for Rs.13,90,000/- as compensation
under the head Point No: 2, Point No: 4 and Point No: 5. The
adjudicating office also awarded interest at the rate of 14.85% from
the date of complaint till realization along with Rs.25,000/- towards
cost of the proceedings. Aggrieved by the order passed by the
Adjudicating officer awarding compensation, interest, and cost an
appeal was preferred by the appellants before the Kerala Real
Estate Appellate Tribunal, Ernakulam as REFA No.22/202
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MSA Nos.7 & 13 of 2024
challenging the order passed by the Real Estate Regulatory
Authority, Thiruvananthapuram. It is contended that along with the
appeal the appellants have also filed I.A.No.43/2024 in REFA
No.22/2024 seeking exemption from depositing the amount as per
proviso to section 43(5) of the Act 2016. The Appellate Tribunal
without properly exercising the discretion, dismissed
I.A.No.43/2024 in REFA No.22/2024 finding that said proviso does
not permit any sort of discretion or relaxation in the matter of
deposit and the appellant was directed to deposit of the entire
amount due under the impugned order by way of fixed deposit for
one year in the name of the Appellate Tribunal, drawn in the
nationalized bank functioning within Ernakulam District and such
deposit shall be made within three weeks. The appellant
challenged the order dated 14.02.2024 in I.A.No.43/2024 in REFA
No.22/2024 on the file of the Kerala Real Estate Tribunal,
Ernakulam before this Court filing MSA No.7/2024 and this Court
has granted an interim order of stay of execution of the order
passed in CCP No.3/2023. After I.A.No.43/2024 in REFA
No.22/2024 was dismissed by the authority, the case was again
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posted and the Advocate Clerk failed to note the posting date and
on 26.03.2024, the appeal was dismissed for non-compliance to
Section 43(5) of the Act, 2016. It is challenging the final order that
MSA No.13 of 2024 is preferred by the appellant.
3. In MSA No.7 of 2024 the following substantial question of
law was formulated,
"whether the appellate tribunal has any discretion in
ordering deposit as contemplated under Section 43(5) of the
Real Estate(Regulation & Development) Act,2016."
whereas, in MSA No.13 of 2024, though various substantial
question of law were raised as in MSA No.7 of 2024, the following
substantial question of law was formulated by the Court.
"Did the appellate tribunal go wrong in dismissing the
appeal when the matter has been stayed by this Court in
MSA No.7/2024".
The learned counsel for the appellants in both the appeals would
contend that the Kerala Real Estate Appellate Tribunal ought to
have allow the application filed as I.A.No.43/2024 in REFA
No.22/2024 seeking exemption from depositing the amount as per
the proviso to Section 43(5) of the Act, 2016. The learned counsel
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for the appellants would further submit that the proviso to Section
43(5) give ample power to the Appellate Tribunal to reduce the
amount to be deposited as a pre-condition for entertaining an
appeal. It is further contended that the discretion granted in the
matter of penalty in Section 43(5) of the Act, 2016 could be
exercised in the case of pre-deposit of compensation and interest
awarded by the authority, but the same was not exercised and no
relaxation was granted to the appellants.
4. The learned Senior Counsel appearing for the respondent
raised various contentions including a contention regarding the
maintainability of these appeals before this Court. It is contended
that what is challenged in MSA No.7 of 2024 is the order passed by
the Real Estate Appellate Authority in I.A.No.43/2024, wherein the
request of the appellants to exempt them from depositing the
compensation amount awarded as a precondition for entertaining
the appeal was rejected, against which no second appeal is
maintainable. It is further contended that Section 58 of the Act,
2016 provides an appeal to the High Court against a decision or
order of the Appellate Tribunal on any one or more of the grounds
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specified in section 100 of the Code of Civil Procedure(CPC), 1908.
On the basis of the same the learned Senior Counsel would contend
that going by Section 100 CPC an appeal shall lie to the High Court
from every decree passed in an appeal by any Court subordinate to
the High Court, and if the Court is satisfied that the case involves a
substantial question of law. On the basis of the same it is
contended that the order under challenge in MSA No.7 of 2024 is
not a decree as defined in Section 2(2) of the CPC and therefore,
the second appeal filed challenging the interim order passed by the
Real Estate Appellate Tribunal is outside the scope of the appellate
jurisdiction of this Court. In support of his contention the learned
Senior Counsel for the respondent relies on judgments in
Muhammadkutty v. Forest Tribunal [1978 KLT 619], Varkey
v. State of Kerala [1980 KLT 632] and Sivaraman v. State of
Kerala [2009 (3) KLT 482]. It is further contended that under
Section 58(1) of the Act, 2016, an appeal shall lie before the High
Court on any one or more of the grounds specified in Section 100
CPC and going by Section 100(5) CPC, an appeal could be heard
only on the substantial question of law formulated, but the
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questions formulated in these appeals does not involve any
substantial question of law. The learned Senior Counsel would
further submit that the questions 'as to whether the Appellate
Tribunal failed to exercise the discretion while directing the
appellants to deposit the entire amount due under the Order of the
Adjudicating Officer with interest' and 'as to whether the Appellate
Tribunal under Section 43(5) of the Act can relax the amount to be
deposited and the compensation imposed on him' are no longer res
integra as the issue has been finally determined by the decision of
the Apex Court in Narayan Chandra Ghosh v. UCO Bank
[(2011) 4 SCC 548] and the decision in M/s.Newtech
Promoters and Developers Pvt. Ltd. v. State of UP & Ors. etc.
[(2021) 18 SCC 1]. It is further contended that if the question is
settled by the highest Court or the general principles to be applied
in determining the questions are well-settled and there is a mere
question of applying these principles or that the plea raised is
palpably absurd, the question would not be a substantial question
of law and to substantiate his contention the learned Senior
Counsel relies on the judgment in Chunilal V. Mehta v. C.S. &
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MSA Nos.7 & 13 of 2024
M. Co. Ltd. [AIR 1962 SC 1314]. The learned Senior counsel
appearing for the respondent also relies on the decision of the Apex
Court in Dwarikesh Sugar Industries Ltd. v. Prem Heavy
Engg. Works (P) Ltd.[(1997) 6 SCC 450] to contend that it
would amount to judicial impropriety for the subordinate courts
including the High Court to ignore the settled decision and then to
pass a judicial order which is clearly contrary to the settled legal
position. The learned Senior Counsel concluded his arguments
contending that the deposit of the compensation and interest
awarded by the authority is a pre-condition for entertaining an
appeal. He would contend that the wording in Sub Section 5 of
Section 43 "it shall not be entertained" should be understood as
"jurisdiction to entertain the appeal" and he relies of the judgment
in Nusli Neville Wadia v. Ivory Properties and Others [(2020)
6 SCC 557] in support of his contention. On the above said
contentions the learned Senior Counsel sought for dismissal of
these appeals.
5. I have heard the rival contentions on both sides.
6. As stated above, MSA No.7 of 2024 is filed challenging the
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order dismissing I.A.No.43/2024 in REFA No.22/2024 seeking
exemption in payment of the pre-deposit as mandated under
Section 43(5) of the Act, 2016, whereas MSA No.13 of 2024 is filed
challenging final order in REFA No.22/2024, whereby the appeal
was dismissed for non compliance of the proviso to Section 43(5) of
the Act, 2016. For a proper adjudication of the issues involved, I
deem it appropriate to refer to the legal provisions regarding
appeal as provided under the Act, 2016.
7. Section 43 of the Act, 2016 deals with 'establishment of
Real Estate Appellate Tribunal', which mandates that 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 and the proviso to Section 43(5) speaks about the pre-
deposit to be made for entertaining the appeal. Section 43(5) of
the Act, 2016 along with the proviso reads as follows:
"43(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
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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 atleast 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."
Section 58 of the Act, 2016 speaks about the right of appeal to the
High Court. As per Section 58, 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(CPC), 1908. Section 58 reads as
follows:
"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
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the grounds specified in section 100 of the Code of Civil
Procedure, 1908 (5 of 1908)"
Going by Section 58, an appeal could be filed only on anyone or
more of the grounds specified in Section 100 CPC. Going by
Section 100 CPC, an appeal shall lie to the High Court from every
decree passed in appeal by any Court subordinate to the High
Court, if the High Court is satisfied that the case involves a
substantial question of law. Therefore, going by Section 43(5) of
the Act, 2016 it is clear that when an appeal is filed by a promoter
with the Appellate Tribunal, it shall not be entertained, without the
promoter first having deposited with the Appellate Tribunal at least
thirty percent 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. Further, Section 58 provides that any person
aggrieved by any decision or order of the Appellate Tribunal, may,
file an appeal to the High Court, on any one or more of the grounds
specified in section 100 CPC, which makes it absolutely clear that
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an appeal could be entertained only if it involves a substantial
question of law.
8. The learned Senior Counsel appearing for the respondents
raised an objection regarding the maintainability of the appeal
itself. Therefore, I will consider the maintainability of the appeal
before this Court, before proceeding to consider the other legal
contentions. The learned Senior Counsel would contend that as per
Section 100 CPC, an appeal will lie from every decree passed in
appeal by any court subordinate to the High Court. The learned
Senior Counsel would submit that the order under challenge in
MSA No.7/2024 is an interim order passed by the Kerala Real
Estate Appellate Tribunal and the same is not a decree as defined
under Section 2(2) of CPC. Further, the Real Estate Appellate
Tribunal established under Section 43(1) of the Act, 2016 is not a
court subordinate to the High Court and therefore, the order under
challenge being not a decree passed in an appeal by a court
subordinate to the High Court, this Miscellaneous Second Appeal is
absolutely not maintainable. It is further contended that the order
under challenge in MSA 7/2024 is an interlocutory order passed by
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the Tribunal and is an order passed prior to reaching the final
decision and the said decision does not resolve or decide in any
manner the dispute raised by the claim and therefore, an appeal is
not maintainable against such an order. To drive home the point
the learned Senior counsel for the respondents relies on the
decision in Muhammadkutty, Varkey and Sivaraman's cases
cited(supra). I have gone through the judgments referred to above
by the learned Senior Counsel and found that Muhammadkutty
and Varkey's cases cited(Supra) are cases coming under the
Private Forests (Vesting and Assignment) Act, 1971, whereas
Sivaraman's case cited(Supra) come under the Kerala Forests
(Vesting and Management of Ecologically Fragile Lands) Act, 2003.
In Muhammadkutty's case cited(Supra) the Court with reference
to the Private Forests (Vesting and Assignment) Act, 1971
especially Section 8A of the said Act which mandates that the
Government or any person objecting to a decision of the Tribunal
may file an appeal against the decision to the High Court,
interpreting the word 'decision' in the statute held that an interim
order passed by the Tribunal prior to reaching a final decision,
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which does not resolve or decide any manner the dispute raised in
the claim is not appealable. A similar view was taken in Varkey's
case cited(Supra). In Sivaraman's case cited(Supra), which was
one dealing with the Kerala Forests (Vesting and Management of
Ecologically Fragile Lands) Act, 2003, especially Section 11, which
deals with appeal to the High Court, specifically mandates that the
Government or person objecting to any decision of the Tribunal
may file an appeal to the High Court and giving a similar
interpretation of the word "decision" took the same view as in
Muhammadkutty and Varkey's cases cited (Supra). The statutes
which were dealt with in these judgments cited supra specifically
mandates that appeal is provided to the High Court only against
any decision of the Tribunal and interpreting the word 'decision' in
the relevant provision, the Court has held that the interlocutory
order passed by the Tribunal is not a final decision in the matter
and therefore, no appeal is provided. I am of the view that the said
decisions cannot apply to the facts and circumstances of the
present case. Section 58 of the Act, 2016 which deals with appeal
to the High Court which provides that any person aggrieved by
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any decision or order of the Appellate Tribunal, could file an appeal
to the High Court on any grounds specified in Section 100 CPC.
Therefore, there is a drastic difference in the provision dealt with
in Muhammadkutty, Varkey and Sivaraman's cases
cited(Supra), wherein the Section speaks only about an appeal
against the decision of the Tribunal whereas in the present statute,
ie., the Real Estate (Regulation and Development) Act, 2016,
appeal to High Court lies against any decision or order of the
Appellate Tribunal. What is under challenge in MSA No.7/2024 is
an order rejecting the request of the appellant herein to waive the
pre-deposit under the proviso to Section 43(5) of the Act, 2016 and
MSA No.13/2024 is filed challenging an order dismissing the
appeal on the ground of non-payment of the pre-deposit. In view of
the specific wording in Section 58 of the Act, 2016, I am of the view
that the appeals are perfectly maintainable before this Court.
9. The next question to be considered is as to whether the
Appellate Tribunal has any discretion in ordering deposit as
contemplated under Section 43(5) of the Act, 2016. The question of
pre-deposit in filing an appeal before the Tribunal find a place in
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proviso to Section 43(5) of the Act, 2016, which has already been
extracted above, which provides that when a promoter files an
appeal with the Appellate Tribunal, it shall not be entertained,
without the promoter first having deposited with the Appellate
Tribunal atleast 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 appeal is heard. Admittedly, the appeal before the
Tribunal was filed by the promoter. The contention taken by the
learned counsel for the appellant is that the provision to Section
43(5) specifically give discretion to the Tribunal in the matter of
pre-deposit in reducing the amount of pre-deposit or in waiving the
payment of the said pre-deposit. I am afraid that the said
contention cannot be accepted at all. Even on a plain reading of the
proviso to Section 43(5) of the Act, 2016, it specifically prevents
entertainment of an appeal filed by the promoter without the
promoter having deposited with the Appellate Tribunal at least
30% of the penalty, or such other higher percentage as may be
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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. Therefore, going by the proviso, the discretion
granted to the Tribunal is not to reduce the 30% of the mandated
pre-deposit, but a discretion for directing payment of a higher
percentage in case of the penalty amount awarded. So, in any case,
the contention of the appellant that the said discretion given in the
proviso is to reduce the amount of pre-deposit or to fully exempt
the payment of pre-deposit cannot be accepted. The Apex Court in
M/s.Newtech Promoters and Developers Pvt. Ltd.'s case cited
supra has considered the above said question in paragraphs 122,
123, 124, 125, 126, 127, 135, 136 and 137 of the said judgment,
which reads as follows:
"122. It may straightaway be noticed that Section 43(5)of
the Act envisages the filing of an appeal before the
appellate tribunal against the order of an authority or the
adjudicating officer by any person aggrieved and where
the promoter intends to appeal against an order of
authority or adjudicating officer against imposition of
penalty, the promoter has to deposit at least 30 per cent
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of the penalty amount or such higher amount as may be
directed by the appellate tribunal. Where the appeal is
against any other order which involves the return of the
amount to the allottee, the promoter is under obligation
to deposit with the appellate tribunal the total amount to
be paid to the allottee which includes interest and
compensation imposed on him, if any, or with both, as the
case may be, before the appeal is to be instituted.
123. The plea advanced by the learned counsel for the
appellants is that substantive right of appeal against an
order of authority/adjudicating officer cannot remain
dependent on fulfillment of predeposit which is otherwise
onerous on the builders alone and only the
builders/promoters who are in appeal are required to
make the predeposit to get the appeal entertained by the
Appellate Tribunal is discriminatory amongst the
stakeholders as defined under the provisions of the Act.
124. Learned counsel further submits that if the entire
sum as has been computed either by the Authority or
adjudicating officer, is to be deposited including 30 per
cent of the penalty in the first place, the remedy of appeal
provided by one hand is being taken away by the other
since the promoter is financially under distress and
incapable to deposit the full computed amount by the
authority / adjudicating officer. The right of appreciation
of his defence at appellate stage which is made available
to him under the statute became nugatory because of the
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onerous mandatory requirement of predeposit in
entertaining the appeal only on the promoter who intends
to prefer under Section 43(5)of the Act which according
to him is in the given facts and circumstances of this case
is unconstitutional and violative of Article 14 of the
Constitution of India.
125. The submission in the first blush appears to be
attractive but is not sustainable in law for the reason that
a perusal of scheme of the Act makes it clear that the
limited rights and duties are provided on the shoulders of
the allottees under Section 19 of the Act at a given time,
several onerous duties and obligations have been imposed
on the promoters i.e. registration, duties of promoters,
obligations of promoters, adherence to sanctioned plans,
insurance of real estate, payment of penalty, interest and
compensation, etc. under Chapters III and VIII of the Act
2016. This classification between consumers and
promoters is based upon the intelligible differentia
between the rights, duties and obligations cast upon the
allottees/home buyers and the promoters and is in
furtherance of the object and purpose of the Act to
protect the interest of the consumers vis-a-viz., the
promoters in the real estate sector. The promoters and
allottees are distinctly identifiable, separate class of
persons having been differently and separately dealt with
under the various provisions of the Act.
126. Therefore, the question of discrimination in the first
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MSA Nos.7 & 13 of 2024
place does not arise which has been alleged as they fall
under distinct and different categories/classes.
127. It may further be noticed that under the present real
estate sector which is now being regulated under the
provisions of the Act 2016, the complaint for refund of the
amount of payment which the allottee/consumer has
deposited with the promoter and at a later stage, when
the promoter is unable to hand over possession in breach
of the conditions of the agreement between the parties,
are being instituted at the instance of the
consumer/allotee demanding for refund of the amount
deposited by them and after the scrutiny of facts being
made based on the contemporaneous documentary
evidence on record made available by the respective
parties, the legislature in its wisdom has intended to
ensure that the money which has been computed by the
authority at least must be safeguarded if the promoter
intends to prefer an appeal before the tribunal and in
case, the appeal fails at a later stage, it becomes difficult
for the consumer/allottee to get the amount recovered
which has been determined by the authority and to avoid
the consumer/allottee to go from pillar to post for
recovery of the amount that has been determined by the
authority in fact, belongs to the allottee at a later stage
could be saved from all the miseries which come forward
against him.
xxx xxx xxx
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MSA Nos.7 & 13 of 2024
xxx xxx xxx
"135.To be noticed, the intention of the instant legislation
appears to be that the promoters ought to show their
bona fides by depositing the amount so contemplated.
136. It is indeed the right of appeal which is a creature of
the statute, without a statutory provision, creating such a
right the person aggrieved is not entitled to file the
appeal. It is neither an 22 AIR 2019 SC 4489 absolute
right nor an ingredient of natural justice, the principles of
which must be followed in all judicial and quasi judicial
litigations and it is always be circumscribed with the
conditions of grant. At the given time, it is open for the
legislature in its wisdom to enact a law that no appeal
shall lie or it may lie on fulfillment of pre condition, if any,
against the order passed by the Authority in question.
137. In our considered view, the obligation cast upon the
promoter of pre deposit under Section 43(5) of the Act,
being a class in itself, and the promoters who are in
receipt of money which is being claimed by the home
buyers/allottees for refund and determined in the first
place by the competent authority, if legislature in its
wisdom intended to ensure that money once determined
by the authority be saved if appeal is to be preferred at
the instance of the promoter after due compliance of pre-
deposit as envisaged under Section 43(5) of the Act, in no
circumstance can be said to be onerous as prayed for or
in violation of Article 14 or 19(1)(g) of the Constitution of
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MSA Nos.7 & 13 of 2024
India."
The Apex Court in Newtech Promoters and Developers Pvt.
Ltd's case cited (Supra) interpreting Section 43(5) of the Act, 2016
held that when the promoter intends to appeal against an order of
authority or adjudicating officer, against imposition of penalty, the
promoter has to deposit at least 30 per cent of the penalty amount
or such higher amount as may be directed by the appellate tribunal
and where the appeal is against any other order which involves the
return of the amount to the allottee, the promoter is under
obligation to deposit with the appellate tribunal the total amount to
be paid to the allottee which includes interest and compensation
imposed on him, if any, or with both, as the case may be, before the
appeal is to be instituted. The learned Senior Counsel also relies on
the judgment in Narayan Chandra Ghosh's case cited (Supra) in
support of his contention. Paragraph 8 of the said judgment reads
as follows:
"8.It is well-settled that when a Statute confers a right of
appeal, while granting the right, the Legislature can
impose conditions for the exercise of such right, so long
as the conditions are not so onerous as to amount to
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MSA Nos.7 & 13 of 2024
unreasonable restrictions, rendering the right almost
illusory. Bearing in mind the object of the Act, the
conditions hedged in the said proviso cannot be said to be
onerous. Thus, we hold that the requirement of pre-
deposit under sub-section (1) of Section 18 of the Act is
mandatory and there is no reason whatsoever for not
giving full effect to the provisions contained in Section 18
of the Act. In that view of the matter, no court, much less
the Appellate Tribunal, a creature of the Act itself, can
refuse to give full effect to the provisions of the Statute.
We have no hesitation in holding that deposit under the
second proviso to Section 18(1) of the Act being a
condition precedent for preferring an appeal under the
said Section, the Appellate Tribunal had erred in law in
entertaining the appeal without directing the appellant to
comply with the said mandatory requirement."
The learned Senior Counsel appearing for the respondents relying
on the judgment in Newtech Promoters and Developers Pvt.
Ltd.'s case cited(Supra) and also the judgment in Narayan
Chandra Ghosh's case cited(Supra) submits that as long as the
liability to make a pre-deposit as mandated under Section 43(5) of
the Act, 2016 has been finally settled by the Apex Court, the
question of law formulated by this Court need not be treated as a
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MSA Nos.7 & 13 of 2024
substantial question of law at all. In support of the said contention
the learned Senior Counsel also relies of the judgment in
Chunilal's case cited(Supra) and submits that if the question is
settled by the highest Court or the general principles to be applied
in determining the question are well settled and there is mere
question of applying those principles or that the plea raised in
palpably absurd, the question need not be a substantial question of
law. Paragraph 6 of the said judgment reads as follows:
"6. We are in general agreement with the view taken by
the Madras High Court and we think that while the view
taken by the Bombay High Court is rather narrow the.
one taken by the former High Court of Nagpur is too
wide. The proper test for determining whether a question
of law raised in the case is substantial would, in our
opinion, be whether it is of general public importance or
whether it directly and substantially affects the rights of
the parties and if so whether it is either an open question
in the sense that it is not finally settled by this Court or
by the Privy Council or by the Federal Court or is not free
from difficulty or calls for discussion of alternative views.
If the question is settled by the highest Court or the
general. principles to be applied in determining the
question are well settled and there is a mere question of
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MSA Nos.7 & 13 of 2024
applying those principles or that the plea raised is
palpably absurd the question would not be a substantial
question of law."
The learned Senior Counsel also relies on the judgment in
Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering
Works(P) Ltd. and Another [(1997) 6 SCC 450]. The Apex
Court in paragraph 32 has held as follows:
"32. When a position, in law, is well settled as a result of
judicial pronouncement of this Court, it would amount to
judicial impropriety to say the least, for the subordinate
courts including the High Courts to ignore the settled
decisions and then to pass a judicial order which is
clearly contrary to the settled legal position. Such judicial
adventurism cannot be permitted and we strongly
deprecate the tendency of the subordinate courts in not
applying the settled principles and in passing whimsical
orders which necessarily has the effect of granting
wrongful and unwarranted relief to one of the parties. It
is time that this tendency stops."
10. Taking into consideration the above facts and
circumstances and the judgments of the Apex Court as stated
above, I am of the view that the pre-deposit as mandated in Section
43(5) of the Act 2016 is a mandatory provision which cannot
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MSA Nos.7 & 13 of 2024
evaded when an appeal is preferred by the promoter and hold that
the Appellate Tribunal has no discretion in ordering deposit as
contemplated under Section 43(5) of the Real Estate [Regulation
and Development] Act 2016, except the discretion of imposing
higher percentage of penalty over and above the 30% provided in
the proviso to Section 43(5) of the Act, 2016. Further, the order
challenging in MSA No.13 of 2024 is one consequential to the
default on the part of the appellants in not making pre-deposit as
provided under Section 43(5) of the Act, 2016, whereby the appeal
preferred by them has been rejected. I find absolutely no illegality
in the order rejecting the appeal which is challenged in MSA No.13
of 2024, as I have already found that the pre-deposit is mandatory.
Further, it is to be noted that the appeal was dismissed on
26.03.2024 and the interim order granted in MSA No.7 of 2024 in
I.A. No.1 of 2024 staying the further proceedings in complaint No.3
of 2023 was only on 30 th July, 2024 and the interim order originally
granted in MSA No.7 of 2024 on 02.04.2024 was only against the
execution of the order passed by the Real Estate Regulatory
Authority in CCP No.3 of 2023. Therefore, none of the contentions
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MSA Nos.7 & 13 of 2024
raised in MSA No.13 of 2024 is also not sustainable.
In view of the above facts and circumstances, I find absolutely
no merits in these appeals and accordingly both the appeals are
dismissed.
Sd/-
VIJU ABRAHAM
JUDGE
sm/
(Contd...................)
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MSA Nos.7 & 13 of 2024
In the Judgment dated 06/01/2025 in MSA No.7 and 13 of 2024, in the 2 nd
line of paragraph 9, the words 'ordering deposit' are replaced with the words
'reducing/exempting pre-deposit' and also, in the 6th line of paragraph 10, the
words 'ordering deposit' are replaced with the words 'reducing/exempting pre-
deposit' as per the order dated 31/01/2025 in MSA No.7 and 13 of 2024.
Sd/-
DEPUTY REGISTRAR
