Karnataka High Court
M/S Software Engineers And Doctors ... vs The Karnataka Real Estate Regulatory ... on 15 June, 2023
Author: G.Narendar
Bench: G.Narendar
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NC: 2023:KHC:20901
RERA.A No. 20 of 2023
C/W RERA.A No. 25 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF JUNE, 2023
PRESENT
THE HON'BLE MR JUSTICE G.NARENDAR
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
RERA APPEAL NO. 20 OF 2023
C/W
RERA APPEAL NO. 25 OF 2023
IN RERA.A.NO. 20/2023
BETWEEN:
1. M/S SOFTWARE ENGINEERS AND DOCTORS
HOUSING CO-OPERATIVE SOCIETY LTD.,
(A SOCIETY REGISTERED
UNDER THE KARNATAKA
CO-OPERTIVE SOCIETIES ACT, 1959),
Digitally signed EARLIER AT NO.514,
by NANDINI D 2ND CROSS, 5TH MAIN,
Location: High AMARJYOTHI LAYOUT,
Court of (WEST WING), DOMLUR,
Karnataka BANGALORE - 560071.
PRESENTLY HAVING ITS
OFFICE AT NO.422, 1ST FLOOR,
5TH MAIN, AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE-560071,
REP. BY ITS SECRETARY
SRI. G.C. NAGARAJA.
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NC: 2023:KHC:20901
RERA.A No. 20 of 2023
C/W RERA.A No. 25 of 2023
2. K. HARIKRISHNA,
SON OF LATE SRI. K.C. DEVE GOWDA,
AGED ABOUT 50 YEARS,
3. G.C. NAGARAJA,
SON OF SRI CHIKKAPPA G.B.,
AGED ABOUT 40 YEARS,
4. SMT. CHARULATHA JAIN,
WIFE OF LATE SRI P. SANJEEV,
AGED ABOUT 53 YEARS,
5. K.V. SRINADHA VARMA,
SON OF SRI K. VENKATESHWARA RAJU,
AGED ABOUT 46 YEARS,
2 TO 5 EARLIER AT NO.514,
2ND CROSS, 5TH MAIN,
AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE - 560071.
PRESENT ADDRESS:
NO.422, 1ST FLOOR, 5TH MAIN,
AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE - 560071.
...APPELLANTS
(BY SRI. C G GOPALASWAMY., ADVOCATE)
AND:
1. THE KARNATAKA REAL ESTATE
REGULATORY AUTHORITY,
OFFICE AT: NO.1/14, 2ND FLOOR,
SILVER JUBILEE BLOCK,
UNITY BUILDING BACKSIDE,
CSI COMPOUND,
3RD CROSS, MISSION ROAD,
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NC: 2023:KHC:20901
RERA.A No. 20 of 2023
C/W RERA.A No. 25 of 2023
BENGALURU-560027.
REPRESENTED BY ITS
SECRETARY.
2. MS. ANANDITHA AJAY,
DAUGHTER OF SRI AJAY KUMAR,
AGED ABOUT 27 YEARS,
RESIDING AT 485 B,
16TH CROSS,
IDEAL HOMES TOWNSHIP,
RAJARAJESHWARINAGAR,
BANGALORE-560098.
...RESPONDENTS
(BY SRI. DEVAIAH I S., ADV. FOR R1,
SRI. R.ANIL KUMAR, ADV. FOR R2.)
THIS RERA.A IS FILED UNDER SECTION 58 (1) OF THE
REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016,
PRAYING TO CALL FOR RECORDS IN APPEAL NO. FR NO. (K-
REAT) 34/2023 IN THE REAL ESTATE APPELLATE TRIBUNAL AT
BENGALURU AND SET ASIDE THE ORDER DATED FEBRUARY
10, 2023, IN APPEAL NO. FR NO. (K-REAT) 34/2023 IN THE
REAL ESTATE APPELLATE TRIBUNAL AT BENGALURU ETC.
IN RERA.A.NO. 25/2023
BETWEEN:
1. M/S SOFTWARE ENGINEERS AND DOCTORS
HOUSING CO-OPERATIVE SOCIETY LTD.,
(A SOCIETY REGISTERED
UNDER THE KARNATAKA
CO-OPERTIVE SOCIETIES ACT, 1959),
EARLIER AT NO.514,
2ND CROSS, 5TH MAIN,
AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE - 560071.
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NC: 2023:KHC:20901
RERA.A No. 20 of 2023
C/W RERA.A No. 25 of 2023
PRESENTLY HAVING ITS
OFFICE AT NO.422, 1ST FLOOR,
5TH MAIN, AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE-560071,
REP. BY ITS SECRETARY
SRI. G.C. NAGARAJA.
2. K. HARIKRISHNA,
SON OF LATE SRI. K.C. DEVE GOWDA,
AGED ABOUT 50 YEARS,
3. G.C. NAGARAJA,
SON OF SRI CHIKKAPPA G.B.,
AGED ABOUT 40 YEARS,
4. SMT. CHARULATHA JAIN,
WIFE OF LATE SRI P. SANJEEV,
AGED ABOUT 53 YEARS,
5. K.V. SRINADHA VARMA,
SON OF SRI K. VENKATESHWARA RAJU,
AGED ABOUT 46 YEARS,
2 TO 5 EARLIER AT NO.514,
2ND CROSS, 5TH MAIN,
AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE - 560071.
PRESENT ADDRESS:
NO.422, 1ST FLOOR, 5TH MAIN,
AMARJYOTHI LAYOUT,
(WEST WING), DOMLUR,
BANGALORE - 560071.
...APPELLANTS
(BY SRI. C G GOPALASWAMY., ADVOCATE)
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NC: 2023:KHC:20901
RERA.A No. 20 of 2023
C/W RERA.A No. 25 of 2023
AND:
1. THE KARNATAKA REAL ESTATE
REGULATORY AUTHORITY,
OFFICE AT: NO.1/14, 2ND FLOOR,
SILVER JUBILEE BLOCK,
UNITY BUILDING BACKSIDE,
CSI COMPOUND,
3RD CROSS, MISSION ROAD,
BENGALURU-560027.
REPRESENTED BY ITS SECRETARY.
2. AJAY KUMAR,
SON OF LATE SRI P.V.SIVAN NAIR,
AGED ABOUT 53 YEARS,
RESIDING AT 485 B,
16TH CROSS, IDEAL HOMES TOWNSHIP,
RAJARAJESHWARINAGAR,
BANGALORE-560098.
...RESPONDENTS
(BY SRI. DEVAIAH I S., ADV. FOR R1,
SRI. R.ANIL KUMAR, ADV. FOR R2.)
THIS RERA.A IS FILED UNDER SECTION 58 (1) OF THE
REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016,
PRAYING TO CALL FOR RECORDS IN APPEAL NO. FR NO. (K-
REAT) 33/2023 IN THE REAL ESTATE APPELLATE TRIBUNAL AT
BENGALURU AND SET ASIDE THE ORDER DATED FEBRUARY
10, 2023, IN APPEAL NO. FR NO. (K-REAT) 33/2023 IN THE
REAL ESTATE APPELLATE TRIBUNAL AT BENGALURU ETC.
THESE APPEALS, COMING ON FOR ADMISSION, THIS
DAY, G.NARENDAR J., DELIVERED THE FOLLOWING:
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RERA.A No. 20 of 2023
C/W RERA.A No. 25 of 2023
JUDGMENT
Heard the learned counsel for the appellants, learned counsel for the Karnataka Real Estate Regulatory Authority and the learned counsel for private respondent in both the appeals.
2. The appeals are canvassed on a short point that the appellate authority i.e., Karnataka Real Estate Appellate Tribunal, Bengaluru, erred in rejecting the appeals preferred by the appellants, for non-deposit of the entire sum ordered by way of refund, interest and compensation, questioning the correctness of the order of the regulatory authority.
3. Learned counsel for the appellants would contend that in terms of sub-section (5) of Section 43 of the Real Estate (Regulation and Development) Act, 2016, (hereinafter referred to as 'the Act, 2016' for short), it would suffice and meet the rigors of law if the promoter deposits 30% of the penalty amount or such higher amount as may be directed by authority. -7-
NC: 2023:KHC:20901 RERA.A No. 20 of 2023 C/W RERA.A No. 25 of 2023
4. Per contra, learned counsel for the private respondents would contend that in terms of the judgment rendered in the case of 'NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. Vs. STATE OF UP AND OTHERS1, the Hon'ble Apex Court has laid down the law that insofar as the penalty alone, a discretion is vested in the authority to entertain an appeal on deposit of 30% of the amount imposed as penalty or such higher sum as may be determined by the authority. On the other hand, he would contend that in the event, there is an order to refund the consideration amount deposited by the allottee then in such a circumstance, the promoter is required to deposit the entire amount ordered to be refunded including the interest and compensation that may also be awarded. In this regard, he would place reliance on the ruling of the Hon'ble Apex Court in the case of Newtech Promoters and Developers Pvt. Ltd. (supra). 1 2021 SCC ONLINE SC 1044 -8- NC: 2023:KHC:20901 RERA.A No. 20 of 2023 C/W RERA.A No. 25 of 2023
5. In the above background, the question that arises for our consideration is "whether the authority under the Act, 2016, has a discretion to waive the deposit of the entire sum ordered to be refunded or whether the authority under the Act, 2016, has discretion to order deposit of a sum lesser then the sum directed to be refunded, including interest and compensation ?".
6. The answer to the above issues is not very far to seek. Paragraph Nos.122, 127 and 128 of the judgment rendered by the Hon'ble Apex Court clearly obviates any discussion on the issue. Paragraph No.122 reads as under:-
"122. Before we examine the challenge to the proviso to Section 43(5) of the Act of making pre- deposit for entertaining an appeal before the Tribunal, it may be apposite to take note of Section 43(5) of the Act, 2016. Section 43(5) reads as follows:--
"43. Establishment of Real Estate Appellate Tribunal-
.......
(5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may -9- NC: 2023:KHC:20901 RERA.A No. 20 of 2023 C/W RERA.A No. 25 of 2023 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 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."
7. Proceeding further, the Hon'ble Apex Court has also reasoned the object behind the rigor of the provisions of sub-section (5) of Section 43 of the Act. On a plain reading, it is apparent that the Tribunal is vested with the jurisdiction to partially waive the pre-deposit of the amount imposed on the promoter by way of penalty only. Insofar as the amounts made due from the promoter under the head of refund of the consideration received, delay compensation and interest, if any awarded, the same is required to be made by way of pre-deposit in
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NC: 2023:KHC:20901 RERA.A No. 20 of 2023 C/W RERA.A No. 25 of 2023 order to enable the authority to hear any appeal by the promoter and the issues are answered accordingly.
8. Learned counsel for the promoter would submit that the claim itself is not maintainable in view of the fact that the claimants are members of the society. In other words, being a member of the society and the project envisaged by the society being for the members, including claimants-respondents, could not have maintained a claim for compensation as the fact remains that any amounts made payable is to be paid out of the funds of the Society and he would submit that the complaint itself is not maintainable.
9. That apart, he would also point out the conduct of the claimants and would submit that the claimants, who are comfortable with the price originally fixed and when the allotment prices were sought to be revised in 2014, the respondents have defaulted and ultimately three years thereafter, attempted to wriggle out of the contract and the award of interest from 2009 also is impermissible and
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NC: 2023:KHC:20901 RERA.A No. 20 of 2023 C/W RERA.A No. 25 of 2023 illegal. These are issues that relate to the merit of the appeal, which we do not intend to enter upon and adjudicate at the present stage and the same is let to be adjudicated by the competent forum. In view of the above, appeals stand dismissed as not maintainable.
10. Learned counsel for the appellants brings to our notice that the private respondents/claimants have been parallelly maintaining proceedings before the consumer forum despite the authority having granted relief and is continuing prosecuting the same. In our considered opinion, the same amounts to abuse of the due process. The proceedings result in consequences and it is settled law that a party cannot maintain proceedings parallelly for a similar relief. It is high time that parties should be made known that such abuse of the process would not be condoned by the Courts and the same is liable to be visited with an iron hand.
11. It is fairly submitted that the proceedings before the Consumer Forum were initiated prior to the
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NC: 2023:KHC:20901 RERA.A No. 20 of 2023 C/W RERA.A No. 25 of 2023 proceedings before the RERA. The proviso to sub-section (1) of Section 71 of the Act, 2016 mandates that it is permissible for a complainant to initiate proceedings before the RERA subject to him withdrawing the complaint. The pendency of the complaint goes to the very root of the matter, which the authority appears to have glossed over and lost sight of. The very maintainability falls into question. It is unfortunate that the authority has lost sight of such a fundamental issue. Accordingly, the issues are left open to be considered by the appropriate forum.
Sd/-
JUDGE Sd/-
JUDGE DN/List No.: 1 Sl No.: 3