Kerala High Court
M/S Artech Realtors Private Limited vs Savithri. K on 19 May, 2025
MSA NO.37/2024 1
2025:KER:33973
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
MONDAY, THE 19TH DAY OF MAY 2025 / 29TH VAISAKHA, 1947
MSA NO. 37 OF 2024
ARISING OUT OF THE ORDER DATED 01.11.2024 IN
I.A.NO.400/2024 IN REFA NO.122/2024 OF KERALA REAL ESTATE
APPELLATE TRIBUNAL, ERNAKULAM
ORDER DATED 24.06.2024 IN COMPLAINT NO.47/2022 OF
KERALA REAL ESTATE REGULATORY AUTHORITY, THIRUVANANTHAPURAM
APPELLANTS/APPELLANTS/RESPONDENTS 1 & 2:
1 M/S.ARTECH REALTORS PRIVATE LIMITED
ARTECH HOUSE, T.C NO.24/2014(1),
NEAR TAJ VIVANTA THYCAUD PO,
THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING
DIRECTOR, T.S.ASOK, PIN - 695014
2 T.S.ASOK
AGED 57 YEARS
MANAGING DIRECTOR, ARTECH REALTORS PRIVATE
LIMITED, T.C NO. 24/2014(1), NEAR TAJ VIVANTA
THYCAUD PO, THIRUVANANTHAPURAM, PIN - 695014
BY ADV K.M.SATHYANATHA MENON
RESPONDENTS/RESPONDENTS/COMPLAINANT & 3RD RESPONDENT:
1 SAVITHRI.K
W/O.SALAHUDEEN, RESIDING AT DOOR NO.7A,
ARTECH EMPIRE FLATS, PATTOOR JN.,
VANCHIYOOR PO, THIRUVANANTHAPURAM, PIN - 695035
2 ARTECH EMPIRE OWNERS WELFARE ASSOCIATION [AEOWA]
REPRESENTED BY ITS PRESIDENT, SASIKANTH
NAMBOODIRI, FLAT NO.15B, ARTECH EMPIRE FLATS,
MSA NO.37/2024 2
2025:KER:33973
PATTOOR JUNCTION, VANCHIYOOR,
THIRUVANANTHAPURAM, PIN - 695035
BY ADVS.
VISHNUDAS.H
O.V.RADHAKRISHNAN (SR.)(R-28), R1
PATHIRIPALLY S.KRISHNAKUMARI(P-375), R1
GEORGE VARGHESE(K/1641/2021)
THIS MISC. SECOND APPEAL HAVING BEEN FINALLY HEARD ON
27.02.2025, THE COURT ON 19.05.2025 DELIVERED THE
FOLLOWING:
MSA NO.37/2024 3
2025:KER:33973
JUDGMENT
Dated this the 19th day of May, 2025 This appeal is filed challenging the order dated 01.11.2024 in I.A.No.400 of 2024 in REFA No.122 of 2024 of the Kerala Real Estate Appellate Tribunal, Ernakulam. The said REFA was filed challenging the order dated 24.06.2024 in Complaint No.47 of 2022 of the Kerala Real Estate Regulatory Authority, Thiruvananthapuram. Appellants herein were the appellants before the Tribunal and respondents 1 and 2 before the Authority. Respondents herein were the respondents before the Tribunal and the complainant and 3rd respondent respectively before the Authority.
Brief facts:
2. The 1st respondent (complainant) is an allottee and appellants (respondent Nos.1 and 2) are the promoters of the project 'Artech Empire' at Pattoor, Thiruvananthapuram. An agreement of sale dated 03.10.2015 and agreement for construction MSA NO.37/2024 4 2025:KER:33973 dated 03.10.2015 had been entered into between the 1 st respondent and appellants. Subsequently disputes arose between the parties on various counts and the complainant referred Complaint No.47 of 2022 before the Regulatory Authority inter alia seeking to direct the appellants to convey/transfer the title of the land and building, undivided share of 1.22 cents of land and apartment number 7A in the apartment complex 'Artech Empire' in the name of the complainant. After completion of pleadings by both sides, the Regulatory Authority framed two points for consideration and the parties tendered evidence thereupon. Exts.A1 to A8 were marked by the 1st respondent and Ext.B1 was marked by the appellants. The Regulatory Authority vide its order dated 24.06.2024 disposed of the complaint directing as follows:
"(1) The respondent Nos.1 and 2 shall pay to the complainant, simple interest at the rate of 16.85% per annum for every month of delay from 03.12.2017 to 27.12.2018 on the amount of Rs.1,02,00,000/- paid before the promised date of completion. as shown in the payment schedule above (2) If respondents No.1 and 2 fail to pay the aforesaid sum as directed within a period of 60 days from the date of receipt of this order, the complainant is at liberty to recover the aforesaid sum from the respondent and their assets by executing this decree in accordance with the Real Estate Regulation and Development Act and Rules."MSA NO.37/2024 5
2025:KER:33973 Appellants challenged the order by preferring an appeal numbered as REFA No.122 of 2024 before the Appellate Tribunal. Along with the said appeal, they filed I.A.No.400 of 2024 seeking to exempt them from making the statutory deposit or to allow the appellant to deposit 30% of the amount ordered by the Regulatory Authority. The Appellate Tribunal vide order dated 01.11.2024, dismissed the I.A. and directed the appellants to make pre-deposit of the entire amount ordered by the Regulatory Authority with interest calculated on the same till the date of the order by way of fixed deposit receipts drawn in the name of the Tribunal and inter alia granted the appellants three weeks time to produce such fixed deposit receipts. The said order of the Appellate Tribunal is impugned in this appeal.
3. The following substantial questions of law were framed for consideration in this appeal:
"1. Whether the Appellate Tribunal has discretion in ordering deposit as contemplated under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016?
2. Whether the Appellate Tribunal can relax the amount to be deposited under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016?
3. Whether the Appellate Tribunal should look into the facts that the KRERA has gone beyond his jurisdiction before directing the deposit under Section 43(5) of the Real Estate MSA NO.37/2024 6 2025:KER:33973 (Regulation and Development) Act, 2016?
4. Whether the Appellate Tribunal failed to exercise its discretion while directing the appellants to deposit the entire amount due under the order of KRERA with interest till the date of order?"
4. Heard Sri.K.M.Sathyanatha Menon, Advocate for the appellants and Sri.O.V.Radhakrishnan, Senior Advocate, instructed by Smt.Pathirippally S.Krishnakumari, Advocate, for the 1 st respondent.
5. Contentions of the appellants in brief:
● The impugned order of the Appellate Tribunal holding that the appellants have to deposit the entire amount due under the order of the Regulatory Authority for the appeal to be entertained by the Appellate Tribunal is erroneous and contrary to law.
● The reliance placed by the Appellate Tribunal on the judgment of the Hon'ble Supreme Court in M/s.Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh and others [(2021) 18 SCC 1] is erroneous. ● The order of the Appellate Tribunal rejecting the application for exemption of deposit of the entire amount based on MSA NO.37/2024 7 2025:KER:33973 Newtech (supra) is illegal and unsustainable. ● The order impugned has been rendered by the Appellate Tribunal overlooking the scheme of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as 'the Act of 2016') and the powers bestowed upon the Appellate Tribunal and the Adjudicating Officer thereunder.
● The direction of the Appellate Tribunal to deposit the entire amount is unsustainable and against the provisions of Section 43(5) of the Act of 2016.
● As per Section 43(5) of the Act of 2016, the Appellate Tribunal has the power and discretion to permit the appellants to deposit 30% of the amount awarded by the Regulatory Authority. The Appellate Tribunal erred in not exercising the said discretion under Section 43(5) of the Act of 2016.
● A plain reading of Section 43(5) of the Act of 2016 makes it clear that the deposit of at least 30% of the penalty is mandatory and it is the discretion of the Appellate Tribunal MSA NO.37/2024 8 2025:KER:33973 to direct the appellants to deposit higher amount or the total amount imposed. The Appellate Tribunal thus has clear discretion under Section 43(5) of the Act of 2016. But, while rendering the impugned order, the Appellate Tribunal failed to exercise the said discretion.
● The finding of the Appellate Tribunal that it had no power to exercise the discretion is erroneous. The MSA thus raises valid substantial questions of law and is maintainable and fit to be allowed.
6. Contentions of the respondents in brief:
● The appeal filed is not maintainable in law. No appeal can be filed from the order by the Appellate Tribunal passed in the IA. The MSA is not maintainable. Reliance is placed on the dictum laid down in Sivaraman v. State of Kerala [2009 (3) KLT 482].
● The word 'any' used before the word 'decision' though could show that every 'decision' is appealable that does not mean that every 'order' passed in the proceeding by the Appellate Tribunal is appealable. Reliance is placed in this MSA NO.37/2024 9 2025:KER:33973 respect on the dictum laid down in Muhammadkutty v. Forest Tribunal [1978 KLT 619].
● Every order passed by the Appellate Tribunal in a proceeding instituted before it is not appealable. The law on the point is trite and settled. Dictum laid down in Varkey v. State of Kerala [1980 KLT 632 (FB)]is squarely on the point. In the context of the Kerala Private Forests (Vesting and Assignment) Act, 1971 it was successfully contended that under Section 8 of the said Act is not appealable under Section 8A and the expression 'decision' used in Section 8A (1) connotes only to the final decision rendered by the Tribunal in the dispute made mention in Section 8 (1) of the said Act and orders which do not resolve or finally decide such dispute are not appealable under Section 8A (1) ;
● Only substantial questions of law could be considered in this appeal [See Sir Chunilal V. Mehta and Sons Ltd. v. Century Spinning and Manufacturing Co. Ltd. [AIR 1962 SC 1314]; Govindaraju v. Mariamman [(2005) 2 SCC MSA NO.37/2024 10 2025:KER:33973 500], Roop Singh (Dead) Through LRs v. Ram Singh (dead) Through LRs [(2000) 3 SCC 708]. No such substantial question of law arises for consideration in this appeal. Law on the point has already been settled by the Hon'ble Supreme Court in Newtech (supra). Hence no 'substantial' question of law arises for consideration.
● Before an interim order is passed the court must consider the question regarding the existence of a prima facie case, balance of convenience as also the questions as to whether the applicant would suffer an irreparable injury if the injunction sought for is refused. The court ought not pass an interlocutory order which would affect a person without affording an opportunity of hearing him. Reliance is placed on the dictum laid down in Bombay Dyeing & Manufacturing Co. Ltd. v. Bombay Environmental Action Group and others [(2005) 5 SCC 61].
● Based on the dictum laid down in Union of India v. Tarachand Gupta and Bros. [AIR 1971 SC 1558], it is contended that a difference is to be made between the MSA NO.37/2024 11 2025:KER:33973 terms 'decision' and 'order'.
● Reliance is placed on the dictum in V.C.Shukla v. State Through CBI [1980 Supp SCC 92] and it is contended that appeal is in the nature of a judicial examination of a decision by a higher court of a decision of an inferior court with the objective to rectify any possible error in the order under appeal.
● Reliance is placed on the dictum laid down by the Hon'ble Supreme Court in Narayan Chandra Ghosh v. UCO Bank and others [(2011) 4 SCC 548] to substantiate the contention that a court or an Appellate Authority cannot refuse to give full effect to the provisions of a statute for mandatory pre deposit.
● Based on the dictum in Nusli Neville Wadia v. Ivory Properties and others [(2020) 6 SCC 557], it is contended that a court has jurisdiction to entertain a suit when it has jurisdiction to receive it for consideration and the word 'entertain' used in a statute in the context of a legal proceedings means to admit for consideration and that it MSA NO.37/2024 12 2025:KER:33973 does not mean giving relief. When a court receives it for consideration and disposal, according to law it must be regarded as entertaining the suit or proceedings. ● Relying on the dictum laid down in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and another [(1997) 6 SCC 450] it is contended that a position of law well settled through judicial pronouncements have to be followed and ignoring the same amounts to judicial impropriety.
● Relying on the dictum in Arnit Das v. State of Bihar [(2000) 5 SCC488] and State of UP and another v. Synthetics and Chemicals Ltd. and another [(1991) 4 SCC 139] it is contended that any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. ● Reliance is also placed on the dictum laid down in Bihar State Electricity Board and others. v. Bhola Ram Steel Pvt. Ltd. [(2016) 4 SCC 680];
MSA NO.37/2024 13
2025:KER:33973 Discussion and Analysis
7. Two short questions thus come up for consideration in this appeal. First one concerns maintainability of this appeal, ie., whether an appeal would lie to this Court from an interlocutory order, like the impugned one, rendered by the Appellate Tribunal. Secondly, whether the Appellate Tribunal can insist that the appellants shall deposit the entire amount due to the allottee under the impugned order before the appeal is entertained and whether it has a discretion in the said respect.
8. Section 43 (5) of the Act of 2016 based on which the Appellate Tribunal has ordered for such deposit squarely answers both the above questions. It reads as follows:
"Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:
Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal at least thirty 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. (Emphasis added) MSA NO.37/2024 14 2025:KER:33973 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."
From a bare reading of the said provision, the following aspects can be deduced:
1. Any direction or decision or order made by the Regulatory Authority can be challenged in appeal before the Appellate Tribunal.
2. If such an appeal is being filed by a promoter, the same shall not be entertained by the Appellate Tribunal unless the following (as applicable) are complied with :
(i) If what is being challenged in appeal is the imposition of a penalty, then at least 30% of such penalty or a higher percentage of that penalty as may be determined by the Appellate Tribunal has to be deposited by the Promoter.
(ii) If what is being challenged is any amount that has been directed to be paid to the allottee, then the total amount including interest and compensation or both imposed has to be deposited by the promoter.
9. It would not be out of place to examine Section 58 of the MSA NO.37/2024 15 2025:KER:33973 Act of 2016 that relates to the appeals to High Court. It reads as follows:
"Appeal to High Court: (1) Any person aggrieved by any decision or order of the Appellate Tribunal, may, file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908 (5 of 1908):
Provided that the High Court may entertain the appeal after the expiry of the said period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time. Explanation.--The expression "High Court" means the High Court of a State or Union territory where the real estate project is situated.
(2) No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties."
Section 58 thus, in line with Section 43 (5) stipulates that an appeal would lie from any 'Decision' or 'Order'. It is trite that when the statute employs open ended terms, the same are to be deemed to have been employed purposefully. They should be construed, interpreted and assigned a meaning that suits its intended nebulous character. Adding a restriction into the scope of such words by reading into the said terms a meaning that 'Decision' or 'Order' meant therein is the 'Final decision' or a 'Final order', thus excluding the scope for an appeal from an interlocutory application is legally MSA NO.37/2024 16 2025:KER:33973 impermissible and unwarranted. It is even more so if the position stands clarified by the Hon'ble Supreme Court. The Hon'ble Supreme court in the Newtech (supra) while considering the larger question regarding the vires of Section 43 of the Act of 2016 clarified the meaning and scope of Section 43 (5) of the Act and has held as follows:
"121. 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% 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." (Emphasis added)
10. The Hon'ble Supreme Court has thus clarified that if the Regulatory Authority has in its order directed the builder/promoter to pay an amount to the allottee, then the said amount has to be deposited with the Appellate Tribunal before the appeal is to be instituted. The ambiguity, if any, regarding the point MSA NO.37/2024 17 2025:KER:33973 of time the said deposit is to be made, created by the use of the terms 'shall not be entertained' and 'before the appeal is heard' as used in the proviso, also stands clarified by the Supreme Court by pithily stating that the amount is to be deposited before the appeal is instituted. In the light of the above, clear position as discernible from the literal reading of the provision and its proviso as well as from the clarification afforded by the dictum in Newtech (supra), I do not find there is any scope or reason to contend,as is done by the appellants in this appeal that the Appellate Tribunal has the power and discretion to permit the appellants to deposit 30% of the 'amount' awarded by the Regulatory Authority. Such discretion, if any, exists only with respect to the penalty amount arrived at by the Regulatory Authority and does not extend to the amount payable to the allottee including interest, which has to be deposited in full. Though the learned counsel for the appellants have strenuously contended that the dictum in Newtech (supra) concerned the larger question regarding the vires of the proviso to Section 43(5) of the Act of 2016 and is not a precedent for the question regarding deposit to be effected for filing an appeal, the said contention cannot MSA NO.37/2024 18 2025:KER:33973 be accepted since the Supreme Court had while considering the larger question also addressed and clarified the proviso too as is evident from the portion of the judgment reproduced above.
11. It follows that the Appellate Tribunal has no discretion in ordering deposit of amounts directed to be paid and same is a condition precedent before the appeal is instituted. The Appellate Tribunal has no power whatsoever to relax the deposit of such amounts and it cannot look into the facts of the case or to the correctness of the order of the Regulatory Authority, in the matter of the deposit of amounts found due to the allottee under Section 43(5) of the Act of 2016. As regards the impugned order is concerned, no failure of exercise of discretion from the part of the Appellate Tribunal can be alleged or is noted. I find merit in the contention put forth by the learned Senior Counsel appearing for the 1 st respondent based on the dictum in Chunilal Mehta (supra), Govindaraju (supra) and Roop Singh (supra) that the question of law in this appeal cannot strictly be termed as 'substantial' in the light of the dictum in Newtech (supra). It follows that the substantial questions of law drawn in this appeal are to be answered against the MSA NO.37/2024 19 2025:KER:33973 appellants and in favour of the 1st respondent.
12. The learned senior counsel appearing for the 1 st respondent has vehemently contended that this appeal itself is not maintainable since no appeal would lie from an order in an I.A. filed before the Appellate Tribunal. Substantial arguments have been placed before me relying on the precedents in Sivaraman (supra), Muhammadkutty (supra) and Varkey (supra). However I note that Section 43 (5) of the Act of 2016 unequivocally states that any direction or decision or order made by the Regulatory Authority can be challenged in appeal before the Appellate Tribunal. Thus the conterion put forth placing reliance on the dictum in Sivaraman (supra), Muhammadkutty (supra), Varkey (supra) that the word 'any' used before the word 'decision' does not mean that every 'Order' passed in the proceeding by the Tribunal is appealable cannot be accepted. The said precedents relied on have no applicability to the interpretation of Section 43 (5) of the Act of 2016 as the provisions compared are not in pari materia. Thus the contention that no appeal would lie from an order rendered by the Appellate Tribunal in an I.A. cannot be accepted as it is contrary to MSA NO.37/2024 20 2025:KER:33973 the express mandate of the provision which permits an appeal to the Appellate Tribunal from any direction or decision or order of the Regulatory Authority, of course subject to the proviso thereto. Conclusion:
13. In view of the above discussion, this appeal fails. The interim order dated 13.12.2024 in I.A.No.1 of 2024 in this MSA is vacated. The appellants are bound to make pre-deposit of the amounts as directed in the order dated 01.11.2024 in I.A.No.400 of 2024 in REFA No.122 of 2024 of the Kerala Real Estate Appellate Tribunal, Ernakulam, less the amount, if any, already deposited pursuant to the interim order.
MSA is dismissed. No costs.
Sd/-
SYAM KUMAR V.M. JUDGE csl