Allahabad High Court
M/S Ats Reality ... vs U.P.Real Estate Appellate Tribunal ... on 14 December, 2020
Equivalent citations: AIRONLINE 2020 ALL 2714
Bench: Pankaj Mithal, Saurabh Lavania
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 1 Case :- MISC. BENCH No. - 23900 of 2020 Petitioner :- M/S Ats Reality Pvt.Ltd.Thru.Auth.Sign.Mr.Shailendra Kumar Respondent :- U.P.Real Estate Appellate Tribunal Lko. & Ors. Counsel for Petitioner :- Kunwar Sushant Prakash Counsel for Respondent :- C.S.C.,Prashant Kumar,Shobhit Mohan Shukla Hon'ble Pankaj Mithal,J.
Hon'ble Saurabh Lavania,J.
Heard Sri Prashant Chandra, Senior Advocate assisted by Sri Sushant Prakash and Ms. Mahima Pahwa, learned Counsel for the petitioner, Sri Shobhit Mohan Shukla, learned Counsel for respondent Nos.2, Sri Anand Kumar Singh, learned Standing Counsel for respondent No.3/State and Mr. Prashant Kumar, learned Counsel for respondent No.4/Yamuna Expressway Industrial Development Authority.
The petitioner is a Private Limited Company engaged in the promotion of development and construction work. It works as a promoter. In respect of one of it's scheme ATS ALLURE, the petitioner is registered as a promoter with RERA (Real Estate Regulatory Authority). Eight complaints were made by different allottees in connection with the above Scheme alleging delay in possession, charging of interest for the delayed period and claiming charges/compensation on account of inordinate delay in putting allottees in possession.
All the aforesaid complaints were decided by RERA vide judgment and order dated 25.6.2020 wherein apart from other directions, the petitioner was directed to put the allottees in possession of the respective units allotted to them latest by 31.3.2021 and for payment of interest @ MCLR + 1% from 13.11.2017 till the date of offer of the possession excluding the lockdown period 24.3.2020 to 30.9.2020 due to COVID-19 pandemic. The interest amount was directed to be adjusted in the final outstanding balance to be paid by the allottees and in the event, the interest payable exceeds the balance amount, the same was directed to be paid as directed above.
Aggrieved by the aforesaid order dated 25.06.2020, petitioner preferred a statutory appeal before the Real Estate Appellate Tribunal (hereinafter referred to as 'the Tribunal']. Similar appeals were also preferred by the other allottees against the orders passed by RERA in their respective complaints. They all remained defective as the requisite amount required to be paid as a pre-condition for entertaining and hearing the appeals was not deposited by the petitioner but were clubbed together.
All appeals (total 10) were dismissed vide order dated 18.10.2020 as despite several opportunities, the petitioner failed to comply with the mandatory condition contained in 43 (5) of the Real Estate (Regulation and Development) Act, 2016 [hereinafter referred to as the '2016 Act']. The Tribunal held that it has no discretionary power to permit the promoter to deposit only 30% of the total amount directed to be paid as compensation and interest to the allottees.
Sri Prashant Chandra, Senior Counsel appearing for the petitioner submitted that the petitioner had deposited 30% of the amount as contemplated under Section 43 (5) of the 2016 Act and as such, the appeal was competent which could not have been dismissed. The Tribunal has manifestly erred in interpreting Sub-Section (5) of Section 43 of the 2016 Act to hold that the promoter is liable to deposit the whole amount directed to be paid, whereas the condition is only for payment of 30% of the penalty or the total amount including interest and compensation. If the said condition is read otherwise it would make the condition to be unreasonable and onerous and in turn, would render the provision of statutory appeal to be illusory and negatory.
In response to the argument so advanced on behalf of the petitioner, Sri Shobhit Mohan Shukla, learned Counsel for RERA, Sri Anand Kumar Singh, learned Standing Counsel and Sri Prashant Kumar, learned Counsel for respondent No.4 submitted that the language of the proviso to Sub-Section (5) of Section 43 of the 2016 Act is plain and simple. It provides that the appeal shall not be entertained, if the promoter has not deposited with the Tribunal at least 30% of the penalty or the total amount payable to the allottee including interest and compensation, if any, or both as the case may be for hearing of the appeal. It has also been submitted by them that the validity of Sub-Section (5) of Section 43 of 2016 Act has been upheld by various High Courts, including that of Madras, Punjab & Haryana and Allahabad and as such, there is no scope for this Court to interfere in the matter.
Sri Prashant Chandra then submitted that the decisions of Madras High Court and Punjab & Haryana High Court are already under stay by the Apex Court and that he has been informed that SLP has also been filed against the decision of the Allahabad High Court upholding the validity of Section 43 (5) of 2016 Act. He further submitted that such a provision has to be read in harmonious manner so as to make the provision workable, rather than to defeat its object by literary interpretation.
The entire controversy as argued before us revolves around the true and correct interpretation of the proviso to Sub-Section (5) of Section 43 of 2016 Act and if it is arbitrary and bad in law.
It is thus important to reproduce Sub-Section (5) of Section 43 of 2016 Act which reads as under:-
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 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.
Explanation, -- For the purpose of this sub-section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force."
The aforesaid provision on its plain and simple reading provides for an appeal before the Tribunal. The appeal, apart from other persons such as allottees/complainants or any other party aggrieved can also be filed by a promoter. It is in the case of an appeal filed by the promoter that the aforesaid proviso provides that it shall not be entertained unless the promoter deposits
(i) at least thirty percent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or
(ii) the total amount to be paid to the allottee including interest and compensation.
Therefore, for the purposes of entertaining and hearing an appeal filed by the promoter, it is essential for the promoter to make the deposit as contemplated here-in-above.
The argument is that the promoter is only liable to pay thirty percent of the penalty or thirty percent of the total amount to be paid to the allottee including interest and compensation. In other words, according to Sri Chandra, the words 'thirty percent' used therein refers not only to the penalty amount, but also to the total amount to be paid to the allottee including interest and compensation.
To our mind, this is not the correct way of reading the aforesaid proviso. The aforesaid proviso in providing deposit of at least thirty percent qualifies the penalty amount only and not the total amount to be paid to the allottee. This is clear from the use of the word 'or' between the penalty and the total amount. In view of the use of the conjunction 'or', thirty percent only qualifies the penalty and not the total amount. Otherwise, the word 'total' may not have been added before the word 'amount' used therein.
The clause, "or such higher percentage as may be determined by the Appellate Tribunal" appearing after the word 'penalty' in the aforesaid proviso also refers to the penalty only.
In order to make things simpler, the relevant portion of the said proviso may be read as under after omitting the clause for the time being:-
"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 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."
Now, if we see the use of words 'thirty percent' it denotes that it qualifies penalty only and since thereafter the word 'or' is used, it does not qualify the words 'total amount' referred thereafter in the proviso. In short, in its literal interpretation, it means (i) atleast thirty percent of the penalty; or (ii) the total amount to be paid to the allottee including interest and compensation. In this way, it is clear that the amount liable to be deposited by the promoter for entertaining and hearing of his/her appeal is either atleast thirty percent of the penalty or the total amount to be paid to the allottee including interest and compensation. There cannot be any other meaning or interpretation of the aforesaid proviso.
The use of the words 'if any' or with 'both' in the aforesaid proviso is also very relevant and important for the purposes of interpretation of the aforesaid proviso. The legislature appears to be conscious of the fact that the promoter under the orders of RERA, may be required to either deposit penalty or any other amount payable to the allottee including interest and compensation, if any, and in some cases may be both. So in the case where penalty alone has to be paid, the appeal would be competent if atleast thirty percent of it or any higher amount, as may be determined by the Tribunal is deposited, but where any other amount is directed to be paid, the total of the said amount including interest and compensation is also to be deposited as a condition precedent or both of them.
The language coughed/set forth in provision in issue appears to be used after due consideration of other provisions of 2016 Act such as Section 12, which provides for return of entire investment alongwith interest and compensation; Section 14, which provides grant of compensation to allottee; Section 18 (1), as per which the allottee would be entitled to amount deposited by him with promoter alongwith interest as also compensation from promoter if he withdraw himself from the project and if does not intend to withdraw from the project then in that event the allottee is entitled to interest for every month of delay; Section 18 (2) and Section 18 (3), which relate to grant of compensation as allottee, and Section 38, which empowers the authority to impose penalty or interest. In this view also, there appears to be no ambiguity in the proviso in issue, i.e., proviso to Section 43 (5) of 2016 Act and the provision in issue has to be read in the light of provisions referred to here-in-above. It is important to read the relevant provisions of the 2016 Act conjointly. Accordingly, if only penalty is awarded then at least thirty percent of same has to be deposited before the appellate authority. For the rest, such as on amount related to interest or compensation or amount which was deposited by allottee and ordered to be returned, the expression "thirty percent" would not apply.
In view of the aforesaid discussion, we do not find that there is any error or illegality on the part of the Tribunal in construing or interpreting the true sense of the proviso to Sub-Section (5) of Section 43 of the 2016 Act.
Having held as above, we proceed on the second aspect of the matter whether such a condition of deposit of the total amount would be unfair, unreasonable, arbitrary or onerous so as to make the appeal to be illusion.
In this connection, first of all, the petitioner has not challenged the vires or the validity of Sub-Section (5) of Section 43 of 2016 Act. At the same time, the validity of the aforesaid provision has been upheld not only by the Madras High Court in T. Chitty Babu1 and Punjab & Haryana High Court in M/s Lotus Realtech Pvt. Ltd.2 but also by the Allahabad High Court in M/s Ansal Properties3. The said decisions may be under challenge in superior Court and there may be stay in respect of the decisions of Madras High Court and Punjab & Haryana High Court, nonetheless, in view of the decision of the Apex Court in Shree Chamundi Mopeds Ltd.4 the said decisions continue to exist in the law books and do not seize to exist. Moreover, there is no stay against the decision of the Allahabad High Court. The said decision in clear and unequivocal manner lays down that the condition of depositing the amount as contemplated under Section 43 (5) of the 2016 Act is neither unreasonable or onerous. The Court in holding as such held that the earlier decisions cited from the side of the promoter are of no help as they were rendered in connection with taxation laws, whereas in the cases under RERA, the amount is required to be deposited after complete adjudication of the lis for entertaining and hearing the appeal thereafter.
The position is different where the 'lis' regarding liability to pay any amount is adjudicated by an independent authority or court as in those cases the liability stands determined with findings and reasoning.
In the light of the above, we have no option but to follow the opinion given by a coordinate Bench of the Allahabad High Court and to hold that the condition of pre-deposit contained in the above provision is not unfair and unreasonable.
There is another way of looking to the aforesaid problem. The judgment and order passed by RERA is like a money decree which cannot ordinarily be stayed in appeal on the analogy of the language of Order 41 Rule 5 of Code of Civil Procedure including Allahabad amendment therein. Thus applying the same analogy, we are of the view that the legislature in its wisdom has rightly provided for the deposit of the total amount including interest and compensation or atleast thirty percent of the penalty as a condition precedent for entertaining and hearing the appeal of the promoter. The money decrees if complied with during pendency of appeal do not result in any irreparable loss and injury which cannot be compensated adequately subsequently.
The challenge to the Appellate Order dated 19.10.2020 thus fails.
We have not been addressed so as to assail the order dated 25.6.2020 passed by RERA obviously for the reason that judicial review of it under Article 226 of the Constitution of India is not permissible when there is a statutory appeal provided against it and the same has failed for one reason or the other.
We may usefully refer to the exposition of the Apex Court in Titaghur5, wherein it is observed that where a right or liability is created by a statute, which gives a special remedy for enforcing it, the remedy provided by that statute must only be availed of.
In paragraph 11 of the above report, the Court observed thus:-
"11. Under the scheme of the Act, there is a hierarchy of authorities before which the petitioners can get adequate redress against the wrongful acts complained of. The petitioners have the right to prefer an appeal before the Prescribed Authority under sub-section (1) of Section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub-section (3) of Section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under Section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Article 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton6 in the following passage:
"There are three classes of cases in which a liability may be established founded upon statute. . . . But there is a third class, viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it.... The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to."
The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd. (1919 AC 368) and has been reaffirmed by the Privy Council in Attorney-General of Trinidad and Tobago v. Gordon Grant & Co. Ltd. (1935 AC 532) and Secretary of State v. Mask & Co. (AIR 1940 PC 105). It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine."
(emphasis supplied)"
In the subsequent decision in Mafatlal7, the Apex Court went on to observe that an Act cannot bar and curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To put it differently, the fact that the High Court has wide jurisdiction under Article 226 of the Constitution, does not mean that it can disregard the substantive provisions of a statute and pass orders which can be settled only through a mechanism prescribed by the statute.
In view of what has been stated above, the writ petition filed by the promoter fails and is accordingly dismissed.
[Saurabh Lavania, J.] [Pankaj Mithal, J.]
Order Date :- 14.12.2020
lakshman