Allahabad High Court
Air Force Naval Housing Board,Air Force ... vs Union Of India Ministry Of Housing & ... on 15 November, 2019
Author: Rajan Roy
Bench: Rajan Roy
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Court No. - 7 Case :- SECOND APPEAL No. - 122 of 2019 Appellant :- Air Force Naval Housing Board,Air Force Station Race Course Respondent :- Union Of India Ministry Of Housing & Urban Poverty & Ors. Counsel for Appellant :- Prashant Kumar,Kushagra Dikshit,Tahseen Naz Counsel for Respondent :- A.S.G.,Anadi Krishna Sinha,Puttu Lal Misra Hon'ble Rajan Roy,J.
Heard Sri Kushagra Dixit, learned counsel for the second appellant and Sri Puttu Lal Mishra, learned counsel appearing for the contesting respondent no.3.
This second appeal under section 58 of the Real Estate (Regulation and Development) Act 2016 (hereinafter referred as 'Act 2016') was admitted by this Court on 23-04-2019 on the following substantial questions of law:
"(a) Whether the learned Designated Appellate Tribunal could have sought deposition of an entire amount as provided under the provisions of Section 43(5) of the Real Estate (Regulation and Development) Act, 2016, whence the impugned order passed by Agra Development Authority didn't pass order for payment of any amount of money.
(b) Whether order passed by the Designated Appellate Tribunal as provided under proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 could have been passed even after it became coram non judis."
Today Sri Puttu Lal Mishra, Advocate made a statement at the Bar that he does not want to file any objection/reply to the appeal and wants to argue the matter finally. Accordingly, the matter has been heard with the consent of the parties.
Now as regards the Question (B) is concerned, the said question has already been considered by this Court in a judgment dated 26-07-2019 rendered in Second Appeal No.364 of 2018 wherein a similar question had been framed, and it was answered in the following terms :
"Having heard the learned counsel for the parties and perused the records, considering the substantial question of law at Serial No. 1 referred hereinabove this Court is of the opinion that the Act, 2016 was formulated for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto, as, is evident from its long title, the Statement and Objects and Reasons of the Act, 2016 also are to the same effect.
Section 43 of the Act, 2016 reads as under:-
"43. Establishment of Real Estate Appellate Tribunal. - (1) The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Appellate Tribunal to be known as the - (name of the State/Union territory) Real Estate Appellate Tribunal.
(2) The appropriate Government may, if it deems necessary, establish one or more benches of the Appellate Tribunal, for various jurisdictions, in the State or Union territory, as the case may be.
(3) Every bench of the Appellate Tribunal shall consist of at least one Judicial Member and one Administrative or Technical Member.
(4) The appropriate Government of two or more States or Union territories may, if it deems fit, establish one single Appellate Tribunal:
Provided that, until the establishment of an Appellate Tribunal under this section, the appropriate Government shall designate, by order, any Appellate Tribunal Functioning under any law for the time being in force, to be the Appellate Tribunal to hear appeals under the Act:
Provided further that after the Appellate Tribunal under this section is established, all matters pending with the Appellate Tribunal designated to hear appeals, shall stand transferred to the Appellate Tribunal so established and shall be heard from the stage such appeal is transferred.
(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 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."
No doubt Section 43(1) provides that the appropriate Government shall, within a period of one year from the date of coming into force of the Act, 2016 by notification, establish an Appellate Tribunal to be known as the - (name of the State/Union territory) Real Estate Appellate Tribunal but the question is, should the provision be read and understood to mean that in the event such Appellant Tribunal is not established within one year then because of use of the word ''shall' therein the appropriate Government can not appoint the Tribunal at all ?, would it be a correct and reasonable understanding of the provision keeping in mind the object of the Act, 2016 and its scheme ? Would it not frustrate the very object of the Act ? It is well settled that the meaning of a provision is not to be understood merely by the use of the word ''shall' or ''may'. It would have to be interpreted in the light of the settled principles, and while ensuring that intent of the Rule is not frustrated. It will always depend upon the facts of a given case, the conjunctive reading of the relevant provision along with other provisions of the Rules, the purpose sought to be achieved and the object behind implementation of such a provision. Reference may be made in this regard to the decision of the Supreme Court reported in (2010) 11 SCC 500; Dinesh Chandra Pandey Vs. High Court of Madhya Pradesh and Anr.
Reference may also be made in this regard to another decision of the Supreme Court rendered in the case of Mohan Singh and Ors. Vs. International Airport Authority of India and Ors. reported in (1997) 9 SCC 132 wherein it was held in Paragraph 26 - "The word "shall" though prima facie gives impression of being mandatory character, it requires to be considered in the light of the intention of the legislature by carefully attending to the scope of the statute, its nature and design and the consequences that would flow from the construction thereof one way or the other. In that behalf, the Court is required to keep in view the impact on the profession, necessity of its compliance; whether the statute, if it is avoided, provides for any contingency for non-compliance; if the word "shall" is construed as having mandatory character, the mischief that would ensue by such construction; whether the public convenience would be subserved or public inconvenience or the general inconvenience that may ensue if it is held mandatory and all other relevant circumstances are required to be taken into consideration in construing whether the provision would be mandatory or directory. If an object of the enactment is defeated by holding the same directory, it should be construed as mandatory whereas if by holding it mandatory serious general inconvenience will be created to innocent persons of general public without much furthering the object of enactment, the same should be construed as directory but all the same, it would not mean that the language used would be ignored altogether. Effect must be given to all the provisions harmoniously to suppress public mischief and to promote public justice."
In the same case it was held that language is the medium of expressing the intention and the object that particular provision of the Act seeks to achieve. Therefore, it is necessary to ascertain the intention. The word ''shall' is not always decisive. Regard must be had to the context, subject matter and object of the statutory provision in question in determining whether the same is mandatory or directory.
The Court in Mohan Singh's case (supra) referred to Maxwell on the Interpretation of Statutes, 10th Edition in Para 318 wherein it has been opined that where the prescriptions of a statute relate to the performance of a public duty and where the invalidation of the acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and government of those on whom the duty is imposed, or, in other words, as directory only. The neglect of them may be penal, indeed, but it does not affect the validity of the act done in disregard of them.
In this regard reference may be made to the opinion of de Smith in his Book Judicial Review 6th Edition in this regard as referred in a Full Bench decision of this Court in the case of Vikas Trivedi Vs. State of U.P. and Ors. reported in (2013) 2 UPLBEC 1193, wherein it has been observed that "a second reason for the tangle in this area is the use of the terms "mandatory" and "directory"; the latter term is especially misleading. All statutory requirements are prima fade mandatory. However, in some situations the violation of a provision will, in the context of the statute as a whole and the circumstances of the particular decision, not violate the objects and purpose of the statute. Condoning such a breach does not, however, render the statutory provision directory or discretionary. The breach of the particular provision is treated in the circumstances as not involving a breach of the statute taken as a whole. Furthermore, logically, a provision cannot be mandatory if a Court has discretion not to enforce it."
Reference may also be made to the decision of the Supreme Court in the case of Rani Drigraj Kuer Vs. Amar Krishan Narain Singh reported in AIR 1960 SC 444 wherein it was held that a provision giving a discretionary power leaves the donee of the power to use or not to use it at his discretion. A directory provision however gives no discretionary power free to do or not to do the thing directed. A directory provision is intended to be obeyed but a failure to obey it does not render a thing duly done in disobedience of it, a nullity.
Further, the Full Bench in Vikas Trivedi's case (supra) considered the aforesaid dictum and held that all provisions of the statute are required to be complied but the Court has to look into as to whether there is substantial compliance of the provision, meaning thereby, if there was substantial compliance the omission in regard to a mandatory provision shall not vitiate the action. Thus, the test of substantial compliance was applied.
Thus, merely because the appropriate Government failed in the performance of its public duty under Section 43(1) to establish the Tribunal within one year it does not invalidate its subsequent establishment, as, if it is held to be so, it would work serious general inconvenience and/or injustice to persons who had no control over those entrusted with the duty and would defeat the object of the Act which is, inter alia, to protect the interest of consumers in the Real Estate Sector.
Reference may also be made in this regard to the decision of the Supreme Court in the case of Raza Buland Sugar Company Ltd. Vs. Municipal Board, Rampur reported in AIR 1965 SC 895 wherein it was held that that requirement of Section 131(3) of the Municipalities Act, 1960 regarding publication of resolution was mandatory, however, the manner of publication as prescribed in Section 94(3) was not mandatory and sufficient compliance of the said provision would suffice.
The Court may refer to another decision reported in (1984) 2 SCC 486; Dalchand Vs. Municipal Corporation, Bhopal and Anr., wherein it has been held that the negligence of those to whom public duties are entrusted cannot by statutory interpretation be allowed to promote public mischief and cause public inconvenience and defeat the main object of the statute. It is as well to realise that every prescription of a period within which an act must be done, is not the prescription of a period of limitation with painful consequences if the act is not done within that period.
In view of the above discussion, though, Section 43(1) which contains a mandate to appoint a Real State Tribunal is mandatory as is evident from the use of the word "shall" therein, the period of one year prescribed therein for establishing the Tribunal has to be treated as directory which does not mean that the appropriate Government is not obliged to adhere to the said time limit but only that if in a given situation the Tribunal is appointed after the expiry of the period of one year mentioned therein this by itself would not render the establishment of the Tribunal void or liable to be struck down. Thus, the word ''shall' indicates the mandatory nature of the provision so far as the establishment of the Real State Appellate Tribunal is concerned but not with regard to the period mentioned therein which is to be treated as directory as aforesaid. The period of one year prescribed in Section 43(1) is indicative of the urgency and importance attached by the legislature to establishment of the Tribunal at the earliest which does not mean that it can not be established after one year.
In the present case as already stated hereinabove, no doubt under Section 43(1) the appropriate Government is obliged to establish the Appellate Tribunal within one year from the date of commencing into force of the Act, 2016 and any observation made hereinabove or hereinafter does not in any manner takeaway the obligation of the appropriate Government to establish the Tribunal within the aforesaid period. All that is being said is that merely because it has not been so established within one year it would be highly unreasonable and against the grain of the Act, 2016 as also its object to say that now it can not be established. While the statutory obligation of the appropriate Government remains, the fact that the appropriate Government failed to appoint the Real Estate Tribunal within one year would not mean that any decision taken by such Tribunal or the designated Appellate Tribunal would have to be quashed, as, it would frustrate the very object of the Act and this is all the more for the reason, though, the word "shall" has been used in Section 43(1) of the Act, 2016 it does not mention any penal/fatal consequences for non observance of the provisions contained in Section 43(1).
Now, so far as the ''Designated Appellate Tribunal' is concerned, it is not in dispute that it was constituted on 24.01.2018 by Notification under the Act, 2016. Here also the same analogy would apply as has been applied in the case of establishment of ''Real Estate Appellate Tribunal', meaning thereby, in the normal course of things, the ''Designated Appellate Tribunal' should also have been appointed within one year of coming into force of the Act, 2016 and the statutory obligation of the appropriate Government in this regard is not diluted in any manner but merely because this was not done, the acts and decisions of the ''Designated Appellant Tribunal' can not be invalidated.
As regards the entitlement of the ''Designated Appellate Tribunal' to continue to function even after the period of one year from the date of coming into force of the Act, 2016, from what has been stated hereinabove it follows as a logical legal corollary that it would certainly be entitled to continue even after the expiry of period of one year from the date of coming into force of the Act, 2016, as otherwise, there would be chaos and as already stated the very object and scheme of the Act, 2016 would be frustrated. Having said so the Court once again reiterates that in the normal course the establishment of the Tribunal should be made by the appropriate authority within one year as aforesaid and till then the designated Appellate Tribunal should function but in a given case as the present one, if this was not done, merely because of this, the orders passed by the ''Designated Appellate Tribunal' or the Appellate Tribunal can not be held to be vitiated. Question no. 1 is answered accordingly."
In the aforesaid decision dated 26-07-2019 it has also been held that so far as penalty is concerned, the Appellate Tribunal has to determine whether 30% of the penalty imposed or such a higher percentage as it may determine is to be deposited, but when it comes to the deposit of the total amount to be paid to the allottee including interest and compensation under the orders of the Regulatory Authority or Adjudicating Officer, no such discretion based on a determination appears to have been vested in the Appellate Tribunal by the Legislature.
For the reasons already mentioned in the aforesaid judgment as the question is a legal one and is the same, the question as Class (b) is also answered accordingly and the answer goes against the second appellant.
As regards Question No. (a), on a bare perusal of the order passed by the R.E.R.A. dated 18.5.2018 against which the appeal was filed before the Appellate Authority it is evident that no monetary amount was awarded to the respondent no.3 herein against the second appellant nor was any money required to be paid or deposited. In this view of the matter, for the Appellate Authority to have passed the impugned order on 17.1.2019 asking the second appellant herein, who was the first appellant before the Appellate Authority to deposit the entire amount deposited by the allottee with the appellant Housing Board against the allotted flat is patently illegal and contrary to proviso to section 43(5) of the Act 2016. Proviso to section 43(5) of the Act 2016 can be attracted only where promoter files the appeal with the Appellate Tribunal against a judgment of the competent authority where some penalty has been awarded by the Adjudicating Authority or some other amount has been ordered to be paid to the allottee including the interest and compensation, if any. It has no application where no such amount has been ordered to be paid or deposited, therefore, clearly the first Appellate Court has erred in the matter. Question No. (a) is answered accordingly.
For the reasons aforesaid the impugned order is quashed. The appeal of the second appellant shall now be processed and proceeded in accordance with law keeping in mind the observations made hereinabove. The appeal stands partly allowed. The first appeal shall stand restored and shall be proceeded accordingly as per law.
It is expected the first appeal of the appellant herein shall be decided by the Appellate Authority as per law with expedition.
(Rajan Roy, J.) Order Date :- 15.11.2019/A.Nigam