Gujarat High Court
Gujarat Real Estate Regulatory ... vs Satyam Infracon on 9 March, 2021
Author: Nikhil S. Kariel
Bench: Nikhil S. Kariel
C/RERAA/1/2020 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/RERA APPEAL NO. 1 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
In R/RERA APPEAL NO. 1 of 2020
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GUJARAT REAL ESTATE REGULATORY AUTHORITY
Versus
SATYAM INFRACON
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Appearance:
MS MANISH LAVKUMAR, SR. ADVOCATE with MR DM DEVNANI(5880) for
the Appellant(s) No. 1
for the Defendant(s) No. 2
MR MIHIR THAKORE, SR. ADVOCATE with MR PERCY KAVINA, SR.
ADVOCATE with MR AB MUNSHI(1238) for the Defendant(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
Date : 09/03/2021
ORAL ORDER
1. Heard learned Senior Advocate Ms. Manish Lavkumar assisted by learned Advocate Mr. D.M. Devnani for the appellant-Gujarat Real Estate Regulatory Authority and learned Senior Advocate Mr. Mihir Thakore with learned Senior Advocate Mr. Percy Kavina assisted by learned Advocate Mr. A.B. Munshi for the respondent No.1.
2. The order dated 07.09.2020, passed by the learned Presiding Officer, Gujarat Real Estate Appellate Tribunal, Gandhinagar in Appeal No.42 of 2020 (for short "the Appellate Tribunal") is sought to be assailed in the present appeal under Section 100 of the Code of Civil Procedure Code, 1908 read with Section 58 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as "the Act") .
3. Learned Senior Advocates appearing for the respondent No.1 have Page 1 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER taken a primary objection with regard to maintainability of the present appeal. Hence, the present appeal is taken up for the decision upon the primary objection.
4. Learned Senior Advocates for the respondent No.1 submit that the respondent No.1 herein had preferred the Appeal No. 42 of 2020 under Section 44(1) of the Act, challenging the order passed by the appellant herein dated 14.02.2020. Learned Senior Advocates submit that the order impugned in the present appeal dated 07.09.2020 passed by the Appellate Tribunal has been challenged before this Court by invoking Section 58 of the Act. According to learned Senior Advocates, the scheme of the Act does not envisage the Authority being empowered or authorized to prefer an appeal before the High Court against a decision passed by the Appellate Tribunal. In support of such contention, learned Senior Advocates have taken this Court in detail through the scheme of the Act. Learned Senior Advocates have invited attention of this Court to Section 2(a) with regard to definition of the words "adjudicating officer", Section 2(i) with regard to definition of the word "Authority", Section 2(p) with regard to definition of the words "competent authority", and Section 2(zg) with regard to definition of the word "Person".
4.1 Learned Senior Advocates by referring to the aforesaid definitions tried to draw distinction that while the word "Authority" as per the definition of Section 2(i) means the Real Estate Regulatory Authority established under sub-section (1) of Section 20. According to Section 2(p) the words "competent authority" means a local authority established under any law which exercises authority over land under its jurisdiction and has powers to give permission for development of such immovable property. Learned Senior Advocates sought to distinguish the word "Authority" and "competent authority" and have submitted that in the definition of the word Page 2 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER "Person" at Section 2(zg), a person includes a competent authority, but does not include "Authority".
4.2 Learned Senior Advocates thereafter took this Court to Section 44 which is with regard to appeals to Appellate Tribunal. According to the learned Senior Advocates, Section 44(1) which is with regard to the right of preferring an appeal to the Appellate Tribunal and whereas same even empowers a competent authority to challenge a decision of the Authority. According to learned Senior Advocates the words "competent authority"
and "Authority" are clearly used to denote two separate entities, as per the definition, inasmuch as the word "Authority" is the Real Estate Regulatory Authority and the word "competent authority" is used to denote a local authority. Emphasizing on the use of words to denote to separate entities, learned Senior Advocates took this Court to Section 58 of the Act which is with regard to the right to appeal against an order of the Appellate Tribunal to the High Court. Learned Senior Advocates have taken this Court to sub- section (1) of Section 58 which reads as under :
"58(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."
4.3 According to the learned Senior Advocates, the right to prefer an appeal is granted by the Act to a 'person' and whereas according to them, the word "Person" as defined in Section 2(zg) does not include the 'Authority', but include 'competent authority'. Thus, according to the Page 3 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER learned Senior Advocates, while the local authority can prefer an appeal to this Court by invoking the right available to it under Section 58, but the said right, clearly, is not granted to the Real Estate Regulatory Authority i.e. the 'Authority', therefore according to them, the 'Authority' is not empowered to challenge an order passed by the Appellate Tribunal. Thus, according to the learned Senior Advocates, the present appeal having been preferred by the 'Authority', and since Section 58 of the Act does not empower the 'Authority' to prefer an appeal to the High Court against an order of the Appellate Tribunal, therefore the present appeal would not be maintainable. Thus, submitting the learned Senior Advocates requested this Court to dismiss the present appeal as not being maintainable.
5. On the other hand, learned Senior Advocate Ms. Manisha Lavkumar for the appellant-authority has strongly opposed the preliminary objection and has taken this Court to various provisions of the Act in support of her contentions. Learned Senior Advocate has drawn attention of this Court to the statement of objects and reasons of the Act and has submitted that one of the main objects of the Act was to ensure effective protection of the interest of consumers in real estate sector. She has thereafter took this Court to Section 32 of the Act that is with regard the functions of Authority for promotion of real estate sector which also inter alia speaks about the protection of interest of the allottees. She has also taken this Court to Section 34 of the Act which is with regard to functions of the Authority and Section 38 of the Act which is with regard to powers of the Authority. Learned Senior Advocate thereafter took this Court to Section 2(o) which defines the word 'company' and whereas emphasis was laid on sub-section
(ii) of Section 2(o) which states regarding any public authority established by the Government in this behalf under any law for the time being in force. Learned Senior Advocate thereafter took this Court to definition of the word 'Person' at Section 2(zg) which also includes at Section 2(zg)(iii) a Page 4 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER company, thus according to her, the Real Estate Regulatory Authority being a pubic authority established by the Government in this behalf, therefore the appellant herein falls under the definition of the word 'company' as per Section 2(o) and whereas Section 2(zg) also defines a person also to be a company and therefore according to her, the appeal would fall under the definition of the word 'Person' who is also empowered to file an appeal under Section 58 of the Act.
5.1 Learned Senior Advocate has also drawn attention of this Court to Section 20(2) of the Act which is with regard to the authority inter alia being permitted to sue or to be sued. Learned Senior Advocate submits that the paramount interest or consideration is with securing the interest of consumers in real estate sector and for such an end, the Authority is also empowered to file an appeal against any order passed by the Appellate Tribunal. The words 'sue or be sued', according to the learned Senior Advocate, gives power and authority to the 'Authority' to take into its ambit all litigations which has been or which can be preferred by the Authority before the Appellate Tribunal or any forum whatsoever, but albeit for the purpose of furthering the objects of the Act.
5.2 Learned Senior Advocate has further submitted that the Act invests varied functions and powers in the Authority inasmuch as Section 32 of the Act mandates the Authority with functions to promote the real estate sector and also to advise the Government in matters relating to development of the said sector. Section 34 describes the functions of the Authority which includes registering and regulating real estate projects and agents, to maintain and publish a website of records, to maintain database, to fix through regulations standard fees to be levied upon the allottees, prompter or real estate agent, to ensure compliance of obligations cast upon promoters, allottees and real estate agent and to ensure compliance of its Page 5 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER regulations or orders or directions made under the Act. Section 35 confers powers upon the Authority to call information or to conduct investigation, Section 37 gives powers to Authority to issue directions, Section 38 gives powers upon the Authority to impose penalty or interest, Section 40 empowers recovery of interest or penalty and enforcement of order, Section 43 directs the Government to establish an Appellate Tribunal, Section 43(5) empowers a person aggrieved by any direction or decision by the Authority or by the adjudicating officer to prefer an appeal before the Appellate Tribunal, Section 44(1) empowers the Government or the competent authority or any person aggrieved by any direction or decision of the Authority or the adjudicating officer to prefer an appeal to the Appellate Tribunal, Section 53 states with regard to powers of the Tribunal, Section 58 empowers a person aggrieved to approach the High Court against any decision or order of the Appellate Tribunal, and Sections 59 to 72 state about offences under the Act, penalties and adjudication. Thus, according to the learned Senior Advocate, the Authority in this case is invested with vast and varied powers for the purpose of fulfilling the objects of the Act and whereas unlike other quasi-judicial authorities, the powers of the Authority is not restricted to decide the disputes only. Learned Senior Advocate further submits that a term 'person aggrieved' in Section 58 of the Act has to be considered in reference to the purpose and provisions of the Act and whereas if any direction or decision of the Appellate Tribunal goes against the purpose and object of the Act, then the Authority would be entitled to challenge the said decision in furtherance of the functions of the Authority vested in it by Section 32 and Section 34 of the Act. Even otherwise according to the learned Senor Advocate, the provisions of the statute have to be read harmoniously keeping in view the purpose and object of the Act and by accepting the preliminary objection of the respondent, the powers of the Authority would be grossly restricted which would ultimately hinder the Page 6 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER right of the Authority to carry out the duties and functions vested upon it by the Act.
6. Learned Senior Advocate Ms. Manisha Lavkumar has made various other submissions, but since this Court is of the opinion that the preliminary objection can be decided only on the basis of the above submissions and independent of the facts, the submissions as regards the scheme of the Act as well as judgments of the Supreme Court relied upon are not being referred to and dealt with herein.
7. In rejoinder, since the learned Senior Advocates for the respondent No.1 attempted to distinguish the submissions of learned Senior Advocate for the appellant on facts, for the reasons stated above, they are also not being dealt with here.
8. Heard learned Senior Advocates for the parties, who have not made any further submissions.
9. The questions which arise for consideration of this Court in view of the preliminary objection are that (i) whether the words "any person"
mentioned in Section 58 of the Act includes the appellant i.e. the Gujarat Real Estate Regulatory Authority, and (ii) whether the Authority (Real Estate Regulatory Authority) is empowered to challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the Act.
10. Learned Senior Advocate for both the parties have taken this Court through the scheme of the Act and whereas the same has been referred to hereinabove. Learned Senior Advocates for the respondent submitted that for deciding the issue as to whether an appeal to the High Court by the Authority can be maintainable and for that Section 58, Section 2(zg) as well as Section 2(p) of the Act are only required to be seen and whereas Page 7 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER according to learned Senior Advocate for the appellant, along with the said Sections 58 and Section 2(zg), Section 2(o) also would have to be read.
11. The first question being whether the term/word 'person' as occurring in Section 58 of the Act would include the Authority or not, this Court finds that the word 'Person' as defined in Section 2(zg) of the Act does not directly refer to the 'Authority' as person, but upon reading of Section 2(o) of the Act, a completely different meaning can be culled out inasmuch as the Section 2(zg)(iii) states that the word 'Person' also includes 'a company'. In definition of the word "company" at Section 2(o) of the Act in addition to a company incorporated and registered under the Companies Act, 2013, the words "a development authority or any public authority established by the Government in this behalf" is also included. Now, undoubtedly the Real Estate Regulatory Authority is a public authority established by the Government under the Real Estate (Regulation and Development) Act, 2016. Again the words 'in this behalf' would, in the considered opinion of this Court, mean a public authority established by the Government under the Act for the purpose of fulfilling the purpose and object of the Act. In the considered opinion of this Court, the Real Estate Regulatory Authority is the Authority established under the provisions of the Real Estate (Regulation and Development) Act, 2016, and the very purpose of the Authority is as found in Section 34 of the Act to perform all such functions for fulfillment of the purpose and object of the Act. Thus, the word 'person' in Section 58 of the Act, encompasses in its ambit,the Authority i.e. the Real Estate Regulatory Authority and under such circumstances, the appellant- Authority is empowered to prefer an appeal before the High Court against any direction or decision of the Appellate Tribunal.
12. Even otherwise, in the considered opinion of this Court, accepting the preliminary objection, would result in an incongruous situation Page 8 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER inasmuch as while the Authority would be joined/heard in an Appeal preferred to the Appellate Tribunal, the Authority would be precluded from challenging the decision of the Appellate Tribunal, if the Authority is aggrieved by the same. This position is clarified in the use of the words "after giving the parties an opportunity of being heard" which is used at Section 44(3) of the Act. The word 'parties', in the considered opinion of this Court, would necessarily include the Authority, since the decision of the Authority or adjudicating authority would be under challenge before the Appellate Tribunal and whereas if it were the intent of the legislature to given an opportunity of hearing only to the person preferring the appeal, then the word 'Appellant' would have been used. Therefore, from the use of the word 'parties' as against the word 'Appellant' it becomes clear that the intent was to ensure that the Authority would get an opportunity of being heard before the Appellate Tribunal. Thus, it cannot be gainsaid that such an incongruous position, of the Authority having a right of being heard by the Appellate Tribunal but the Authority not being empowered to challenge the decision of the Appellate Tribunal, would not have been intended by the framers of the statute. Under such circumstances, on a overall reading of the concerned provisions, this Court is of the considered opinion that the Authority does have a right under the Act to challenge a decision of the Appellate Tribunal under Section 58 of the Act, before the High Court. Thus, the finding of the Authority being a 'Person' as per Section 2(zg) read with Section 2(o) of the Act gets further fortified on the basis of the discussion, observation and findings above.
13. Thus, in the considered opinion of this Court, the questions raised hereinabove can be answered as thus :
(i) The Authority would be included in the definition of 'Person' on a conjoint reading of Section2(zg) and 2(o) of the Act; and Page 9 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021 C/RERAA/1/2020 ORDER
(ii) The Authority falling within the definition of the word 'Person' is therefore empowered to challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the Act.
14. In view of the above findings, the preliminary objection raised by the respondent No.1 is rejected.
Stand over to 18.03.2021.
(NIKHIL S. KARIEL,J) BDSONGARA Page 10 of 10 Downloaded on : Thu Mar 11 00:06:15 IST 2021