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
2025:KER:5724
MSA Nos.7 & 13 of 2024
:2:
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:
2025:KER:5724
MSA Nos.7 & 13 of 2024
:3:
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:
2025:KER:5724
MSA Nos.7 & 13 of 2024
:4:
"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 2025:KER:5724 MSA Nos.7 & 13 of 2024 :5: 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 :6: 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 :7: 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 :8: 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 :9: 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 10 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 11 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 12 : 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. & 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 13 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 14 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 15 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 16 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 17 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 18 : 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, 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 19 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 20 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 21 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 22 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 23 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 24 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 25 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 26 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 27 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 28 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 29 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 30 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 31 : 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 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 32 : 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.
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VIJU ABRAHAM JUDGE sm/ (Contd...................) 2025:KER:5724 MSA Nos.7 & 13 of 2024 : 33 : 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.
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DEPUTY REGISTRAR