SA 251.2022.doc 29.12

RERA, delayed possession, force majeure, real estate, Appellate Tribunal, jurisdiction, consumer protection, builder liability, property

08 Jun, 2026
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Runwal Constructions Vs. Bharat Shah

Bombay High Court SA No.251 of 2022

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Case Background

As per case facts, promoters (Appellants) failed to deliver possession of flats booked between 2005-2007 by the agreed dates of 2008-2010, despite allottees (Respondents) having made substantial payments. Allottees subsequently ...

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Document Text Version

SA 251.2022.doc 29.12

Shraddha/Sonali/Arjun

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

SECOND APPEAL NO.251 OF 2022

WITH

CIVIL APPLICATION NO.288 OF 2019

SECOND APPEAL NO.251 OF 2022

WITH

CIVIL APPLICATION NO.1529 OF 2018

SECOND APPEAL NO.251 OF 2022

WITH

CIVIL APPLICATION NO.40 OF 2022

SECOND APPEAL NO.251 OF 2022

WITH

CIVIL APPLICATION (ST) NO.5789 OF 2019

SECOND APPEAL NO.251 OF 2022

Runwal Constructions Registered Partnership

Firm

…Appellant/

Applicant

Versus

Bharat Shah …Respondent

WITH

SECOND APPEAL NO.253 OF 2022

WITH

CIVIL APPLICATION NO.1526 OF 2018

SECOND APPEAL NO.253 OF 2022

WITH

CIVIL APPLICATION NO.41 OF 2022

SECOND APPEAL NO.253 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Nitin Korgaonkar …Respondent

SHRADDHA

KAMLESH

TALEKAR

Digitally

signed by

SHRADDHA

KAMLESH

TALEKAR

Date:

2026.06.08

15:38:39

+0530

SA 251.2022.doc 29.12

WITH

SECOND APPEAL NO.254 OF 2022

WITH

CIVIL APPLICATION NO.1521 OF 2018

SECOND APPEAL NO.254 OF 2022

WITH

CIVIL APPLICATION NO.42 OF 2022

SECOND APPEAL NO.254 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Pravir Karmokar …Respondent

WITH

SECOND APPEAL NO.255 OF 2022

WITH

CIVIL APPLICATION NO.43 OF 2022

SECOND APPEAL NO.255 OF 2022

WITH

CIVIL APPLICATION NO.1530 OF 2018

SECOND APPEAL NO.255 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Garfield Deepak D’Souza …Respondent

WITH

SECOND APPEAL NO.256 OF 2022

WITH

CIVIL APPLICATION NO.44 OF 2022

SECOND APPEAL NO.256 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Satish Kumar & Ors. …Respondents

WITH

SA 251.2022.doc 29.12

CIVIL APPLICATION NO.1532 OF 2018

SECOND APPEAL NO.256 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Applicant

Versus

Srinivasan Sundaresan & Ors. ...RespondentsWITH

SECOND APPEAL NO.257 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant

Versus

Satish Maruti Shirsekar …RespondentsWITH

INTERIM APPLICATION NO.3352 OF 2019

SECOND APPEAL NO.257 OF 2022

Satish Maruti Shirsekar …Applicant

Versus

Runwal Constructions …Respondent WITH

CIVIL APPLICATION NO.45 OF 2022

SECOND APPEAL NO.257 OF 2022

WITH

CIVIL APPLICATION NO.1523 OF 2018

SECOND APPEAL NO.257 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Applicant

Versus

Satish Maruti Shirsekar …RespondentsWITH

SECOND APPEAL NO.258 OF 2022

WITH

CIVIL APPLICATION NO.46 OF 2022

SA 251.2022.doc 29.12

SECOND APPEAL NO.258 OF 2022

WITH

CIVIL APPLICATION NO.1531 OF 2018

SECOND APPEAL NO.258 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Sudhir Ray …Respondent

WITH

SECOND APPEAL NO.259 OF 2022

WITH

CIVIL APPLICATION NO.47 OF 2022

SECOND APPEAL NO.259 OF 2022

WITH

CIVIL APPLICATION NO.1524 OF 2018

SECOND APPEAL NO.259 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Prachi Chindarkar …Respondent

WITH

SECOND APPEAL NO.260 OF 2022

WITH

CIVIL APPLICATION NO.48 OF 2022

SECOND APPEAL NO.260 OF 2022

WITH

CIVIL APPLICATION NO.1527 OF 2018

SECOND APPEAL NO.260 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Samira Sultana Halim Mohammed …Respondent

WITH

SECOND APPEAL NO.261 OF 2022

SA 251.2022.doc 29.12

WITH

CIVIL APPLICATION NO.1528 OF 2018

SECOND APPEAL NO.261 OF 2022

WITH

CIVIL APPLICATION NO.49 OF 2022

SECOND APPEAL NO.261 OF 2022

Runwal Constructions Runwal & Omkar Esquare,

Mumbai

…Appellant/

Applicant

Versus

Parag Chandrakant Sawant & Anr. …Respondents

_______________________________________________________________

Mr. Atul Damle, Senior Advocate with Mr. Ditendra Mishra,

instructing Advocate, for the Appellants in SA No.260 of 2022.

Mr. Rajiv Chavan, Senior Advocate with Mr. Ditendra Mishra, for the

Appellants in SA No.253 of 2022.

Mr. Ashish Kamat, Senior Advocate with Mr. Ditendra Mishra,

instructing Advocate, for the Appellants in SA No.251 of 2022.

Mr. Saket Mone with Mr. Ditendra Mishra, for the Appellants in SA

Nos.256 of 2022 and 258 of 2022.

Mr. Rubin Vakil, Advocate with Mr. Ditendra Mishra, for the

Appellants in SA No.254 of 2022.

Mr. Ditendra Mishra with Mr. Abhishek Puranik, Mr. Prerith Menon,

Mr. Dhiraj Kanade, for the Appellants in SA Nos.255 of 2022, 257 of

2022, 259 of 2022 and 261 of 2022.

Mr. Anjani Kumar Singh i/b Ms. Asmita S. Jaiswal, for the

Respondent(s) in SA No.251 of 2022, SA Nos.253 of 2022 to SA 261

of 2022 and connected Civil/Interim Application(s).

_____________________________________________________________

CORAM: MADHAV J. JAMDAR, J.

RESERVED ON: 29 JANUARY 2026

PRONOUNCED ON: 08 JUNE 2026

JUDGMENT :

1.Heard Mr. Atul Damle, learned Senior Counsel, Mr. Ashish Kamat,

learned Senior Counsel, Mr. Rajiv Chavan, learned Senior Counsel, Mr.

SA 251.2022.doc 29.12

Sanket Mone, learned Counsel, Mr. Rubin Vakil, learned Counsel and

Mr. Ditendra Mishra, learned Counsel, appearing for the Appellants and

Mr. Anjani Kumar Singh, learned Counsel appearing for the

Respondents.

2.The challenge in this group of 10 Second Appeals is to the Order

dated 1

November 2018 passed by the learned President, Maharashtra

Revenue Tribunal, Mumbai and Incharge, Maharashtra Real Estate

Appellate Tribunal, Mumbai (“Designated Appellate Tribunal”) in

respective individual Appeals filed by the respective

Respondents/Allottees. The challenge before the learned Designated

Appellate Tribunal was to the Orders dated 2

April 2018 passed by the

Competent Authority in all these Appeals except one Appeal where the

challenge was to the Order dated 21

May 2018 passed by the

Competent Authority. The details of the same are set out hereinbelow.

Sr.

no.

Second

Appeal no.

Name of the

Respondent

Order

passed by

the

Authority

Complainant No.Appeal No.

before

there

Appellate

Tribunal

1 251/2022 Bharat Shah 21/05/2018 CC006000000023853 AT0060000

00010474

2 253/2022 Nitin

Korgaonkar

02/04/2018 CC006000000001623 AT0060000

00000317

3 254/2022 Pravair

Karmokar

02/04/2018 CC006000000023486 AT0060000

00000289

4 255/2022 Garfield

Deepak

Dsouza

02/04/2018 CC006000000012039 AT0060000

00000297

SA 251.2022.doc 29.12

5 256/2022 Sathish

Kumar and

Ors

02/04/2018 CC006000000001257 AT0060000

00000280

6 257/2022

Satish Maruti

Shirsekar

02/04/2018 CC006000000012440 AT0060000

00000281

7 258/2022 Sudhir Ray 02/04/2018 CC006000000012486 AT0060000

00010556

8 259/2022 Prachi

Chindarkar

02/04/2018 CC006000000012460 AT0060000

00000287

9 260/2022 Samira

Sultana

Halim

Mohammed

02/04/2018 CC006000000012589 AT0060000

00000279

10 261/2022 Parag

Chandrakant

Sawant and

Anr

02/04/2018 CC006000000012466 AT0060000

00000301

3.The relief sought in various complaints before the Competent

Authority by various Complainants i.e. Allottees is

inter alia seeking

direction to pay interest for delayed possession. The Competent

Authority has held that the time period which can be attributed to the

Appellants for delay in handing over possession can neither be

ascertained nor the date of handing over possession can be determined

at that stage. The Competent Authority

inter alia passed following

directions:-

“

4.In view of the above, the Respondent is hereby again

directed to make serious efforts to expedite the process of

obtaining the required sanctions/approvals for

recommencing the project work at the earliest and to

complete the construction work of the said project in a

time-bound manner. Respondent shall also not unilaterally

execute any cancellations in the said project, with respect

SA 251.2022.doc 29.12

to the Complainants in the present complaint.

5.Consequently, the matters are disposed of.”

4.The respective Complainants/Allottees challenged the Order of

the Competent Authority by filing respective Appeals before the Real

Estate Appellate Tribunal. The learned Designated Appellate Tribunal

inter alia passed following operative Order :

“

2.The Promoter / Respondent to pay interest to the

Allottees @ 10.05% p.a. effective from 1

February 2014

till handing over actual possession.

3.The Promoter/ Respondent to complete Building B1

and B2 in the registered project within 18 months from

Order. Failure, to follow action and consequences in terms

of Section 7 of RERA.”

5.At this stage, it is required to be noted that the impugned Orders

are challenged by the original Respondent i.e. Promoter by filing these

Second Appeals and not by the original Complainants/ Allottees. Thus,

original Complainants/Allottees have accepted the Order of the learned

Designated Appellate Tribunal. This is specifically mentioned since as

per Agreement executed between the parties, the date of handing over

possession is 2008 to 2010, however learned Designated Appellate

Tribunal extended the said date till 1

February 2014.

6.This Court, by Order dated 12

December 2024 framed following

substantial questions of law and an additional substantial question of

SA 251.2022.doc 29.12

law was framed by Order dated 7

April 2025. The same are as under:-

SUBSTANTIAL QUESTIONS OF LAW FRAMED BY ORDER DATED

12TH DECEMBER 2024 :

1. When the Agreement for Sale between the Promoter and

the Allottee makes provision for force majeure events,

which have the effect of postponing the agreed date of

possession, can authorities under RERA fix / provide for a

date of possession while adjudicating claims under Section

18 of RERA?

2. Whether the authorities under RERA have the power

to determine or rewrite or revise the date of handover of

possession, in exercise of power under Section 18 of RERA?

3. Whether, in exercise of power to designate an

authority as the Appellate Tribunal under the first proviso

to Section 43(4) of RERA, it is necessary for the State

Government to give due regard to the provisions of Section

43(3) of RERA and ensure that the composition of such

alternate authority is in accordance therewith?

4. Whether in exercise of power under the first proviso

to Section 43(4) of RERA, the State Government (as the

delegatee of such power) can designate an authority to

function as the Appellate Tribunal in a manner contrary to

or ultra vires Section 43(3) of RERA?

5. Whether a single member bench of the Hon’ble

Maharashtra Revenue Tribunal, exercising power under the

first proviso to Section 43(4) of RERA has jurisdiction to

adjudicate appeals under Section 44 of RERA?

6. Whether, in light of the second proviso to Section

43(4) of RERA, the Hon’ble Maharashtra Revenue Tribunal

has jurisdiction to adjudicate appeals under Section 44 of

RERA, after the constitution / establishment of the

Maharashtra Real Estate Appellate Tribunal under Section

SA 251.2022.doc 29.12

43 of RERA?

7. Whether the impugned Judgment and Order is

perverse and unreasoned?

ADDITIONAL SUBSTANTIAL QUESTION OF LAW FRAMED BY

ORDER DATED 7TH APRIL 2025 :

1. When agreement in the form of a booking form, gets

frustrated on account of force majeure as well as due to

making its performance impossible, whether such an

agreement can be considered while exercising power under

section 18 of RERA?

Thus, total 8 substantial questions of law were framed by this Court.

7.The substantial questions of law Nos. 1, 2 and 7 framed by Order

dated 12

December 2024 and the substantial question of law framed

by Order dated 7

April 2025 are

inter alia depending on the analysis of

factual aspects. The substantial questions of law Nos. 3, 4 and 5 framed

by this Court by order dated 12

December 2024 are concerning

designation of the Maharashtra Revenue Tribunal by exercise of power

under Section 43(4) of RERA contrary to the mandate of Section 43(3)

of RERA and substantial question of law No.6 is concerning jurisdiction

of Maharashtra Revenue Tribunal to adjudicate Appeal under Section 44

of the RERA after the constitution/establishment of the Maharashtra

Real Estate Appellate Tribunal under Section 43 of the RERA. Therefore,

this Court will take up for consideration substantial question of law

SA 251.2022.doc 29.12

No.6 first and thereafter substantial questions of law namely 3, 4 and 5

as both these set of questions of law are relating to the jurisdiction of

the learned Maharashtra Revenue Tribunal to act as the learned

Appellate Tribunal under RERA. Other substantial questions of law will

be considered thereafter.

8.Before setting out and consideration of the rival submissions, it is

required to be noted that all the parties have filed written submissions

on 19

September 2025 and therefore these group of Second Appeals

were adjourned to 6

October 2025 for passing orders. However, on 6

October 2025 as the assignment was very heavy, passing of Judgment in

these group of Second Appeals was reserved. While preparing draft

Judgment this Court noticed certain relevant provision as more

particularly set out in Order dated 5

January 2026 which was not

pointed out to this Court by both the parties and therefore, for hearing

the parties on the said issue the matter was again listed from time to

time. Ultimately, the hearing was completed on 29

January 2026 and

the Judgment was reserved.

FACTUAL ASPECTS:

9.The project ‘Runwal Infinity’ (‘Runwal Sanctuary’) situated at

Nahur, Mulund, Mumbai was launched in the year 2005-2006. The

SA 251.2022.doc 29.12

booking of various flats was done by the Respondents i.e. flat

purchasers on different dates between 2005-2007. As far as the

Respondents in eight Second Appeals, their registered agreements were

executed between 2006-2007. As far as the Respondents in Second

Appeal No.253 of 2022 and Second Appeal No.257 of 2022, their

agreements are not registered and only allotment letters are issued to

them. However, they have paid flat cost of about 39.5% and 40.6%

respectively.

10.At this stage it is necessary to set out the relevant details as set

out in the chart submitted by the Appellants:-

Sr.

no.

Second

Appeal

No.

Flat

No.

Tower Date of

Agreement

Possession

date

Cost of

Flat

(in Rs.)

Amount

Paid

(in Rs.)

Paid

1 251/2022 901/

902

B2 13.02.2007 31.12.2009 60,75,000 30,37,500 50

2 253/2022 1101 C Allotment

Letter

21.09.2007

31.12.2009 57,61,050 22,50,000 39.1

3 254/2022 2004 B2 08.03.2007 31.12.2009 45,77,000 16,51,95 0 36.1

4 255/2022 103 B2 08.10.2007 31.12.2009 57,03,375 6,04,338 1 0.6

5 256/2022 601 B1 19.04.2006 31.12.2008 39,55,000 23,73,000 60

6 257/2022 703 C 13.12.2006 31.12.2008 39,30,250 15,96,000 4 0.6

7 258/2022 1103 B2 27.03.2006 31.12.2009 36,32,000 20,66,00 0 56.9

8 259/2022 803 B1 03.02.2007 31.12.2008 36,32,000 36,32,000 100

9 260/2022 1203 B2 31.12.2007 31.12.2010 49,94,000 28,25,00 0 56.6

10 261/2022 1403 B2 07.03.2007 03.12.2009 51,07,500 21,07,5 00 41.3

Thus, one of the Respondent i.e. the Allottee has paid 100% of

the consideration and some of them have paid between 50% to 60% of

SA 251.2022.doc 29.12

the consideration. In any case, most of the Respondents i.e. the Allottees

have paid substantial consideration towards the purchase of flats to the

Appellant- Promoter about more than 15 years back. The Agreements

are of the year 2006-2007 and the date of handing over possession is of

2008-2010 and till the year 2026 the possession of the respective flats

has not been handed over to the respective Allottees. As far as the

Tower C is concerned, the same has been partly constructed earlier and

thereafter it has been demolished and now it has again being

constructed.

11.The substantial question of law No. 6 framed by Order dated 12

December 2024 is treated as First Substantial Question of Law as the

same is concerning jurisdiction of the Maharashtra Revenue Tribunal as

Designated Appellate Tribunal to deal with appeals filed under the Real

Estate Regulation and Development Act, 2016 (hereinafter referred to

as “the RERA”) in view of the notification dated 8

May 2018. Thus, the

First substantial question of law is reproduced herein below for ready

reference:

FIRST SUBSTANTIAL QUESTION OF LAW :

Whether, in light of the second proviso to Section 43(4) of

RERA, the Maharashtra Revenue Tribunal has jurisdiction

to adjudicate appeals under Section 44 of RERA, after the

constitution / establishment of the Maharashtra Real

Estate Appellate Tribunal under Section 43 of RERA ?

SA 251.2022.doc 29.12

SUBMISSIONS OF THE APPELLANTS CONCERNING FIRST

SUBSTANTIAL QUESTION OF LAW:-

12.Learned Counsel of the Appellants raised the following

contentions:

11.1.Learned Counsel pointed out Section 43 of the RERA. Learned

Counsel submitted that sub-Section (1) of Section 43 provides that by

Notification the appropriate government shall establish an Appellate

Tribunal to be known as the Maharashtra Real Estate Appellate

Tribunal. First proviso to sub-Section 4 of Section 43 specifies that until

the establishment of an Appellate Tribunal under said Section,

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 RERA. Second proviso to

sub-Section 4 of Section 43 provides that after the Appellate Tribunal

under the said 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.

11.2.Learned Counsel pointed out the following factual aspects:

Sr. No. Date Facts/events

1. January 2018 The State Government issued a Notification

SA 251.2022.doc 29.12

designating the Hon’ble Maharashtra

Revenue Tribunal under Section 43 of RERA,

in exercise of power under the first proviso

to Section 43(4) of RERA.

2. 02.04.2018

----------------

21.05.2018

Order passed by the Hon’ble Maharashtra

Real Estate Regulatory Authority which is

subject matter of the present Second

Appeals.

3. May 2018 The Respondent filed respective Appeals.

4. 08.05.2018 The State Government notified the

constitution of the Hon’ble Maharashtra Real

Estate Appellate Tribunal under Section

43(1) of RERA.

[Note- By virtue of the second proviso to

Section 43(4) of RERA, all appeals before the

Maharashtra Revenue Tribunal stood

transferred to the Maharashtra Real Estate

Appellate Tribunal.]

5. 31.10.2018 The Maharashtra Revenue Tribunal

consisting of Single Judge/Member heard the

arguments in the said Appeal.

6. 01.11.2018 The impugned Order passed by the Hon’ble

Maharashtra Revenue Tribunal.

11.3.It is submitted that as the State Government notified the

constitution of the Maharashtra Real Estate Appellate Tribunal under

Section 43(1) of the RERA by the Notification dated 8

May 2018, by

virtue of second proviso to Section 43(4) of the RERA, all Appeals

before the Maharashtra Revenue Tribunal stood transferred to the

Maharashtra Real Estate Appellate Tribunal.

11.4.It is thus submitted that when the Maharashtra Revenue Tribunal

heard the arguments on 31

October 2018 and passed the impugned

order on 1

November 2018, the Maharashtra Revenue Tribunal had no

SA 251.2022.doc 29.12

jurisdiction, as by the Notification dated 8

May 2018 issued under

Section 43(1) of the RERA, and by virtue of second proviso to Section

43(4) of the RERA, all Appeals before the Maharashtra Revenue

Tribunal stood transferred to the Maharashtra Real Estate Appellate

Tribunal.

11.5.Reliance is placed on the following decisions of the Supreme

Court:

(i)Allahabad Bank v. Canara Bank

(Paragraphs 13, 21, 24

and 25)

(ii)Hara Parbati Cold Storage Pvt. Ltd. v. Uco Bank

(iii)Sushil Kumar Mehta v. Gobind Ram Bohra

(Paragraph

Nos.5, 9 and 26)

(iv)B. Premanand v. Mohan Koikal

(paragraph Nos.15 and 16)

(v)Basawaraj v. Special Land Acquisition Officer

(paragraph

No.12)

(vi)Commissioner of Agricultural Income Tax, West Bengal v.

Sri Keshab Chandra Mandal

(paragraph No.27).

(vii)Britnell v. Secretary for Social Security

1(2000) 4 SCC 406

2(2000) 9 SCC 716

3(1990) 1 SCC 193

4(2011) 4 SCC 266

5(2013) 14 SCC 81

6(1950) SCC 205

7 (1991) 2 All ER 726

SA 251.2022.doc 29.12

11.6.Reliance is also placed on the decision of High Court of

Jharkhand at Ranchi in the matter between Arjun Kumar Singh v. Union

of India

and more particularly on paragraph No.4 of the same.

11.7.Reliance is also placed on the decision of National Company Law

Tribunal in the case of Devang Hemant Vyas v. 3A Capital (P) Ltd.

and

more particularly on paragraph Nos.54 and 55 of the same.

11.8.It is submitted that on and from 8

May 2018 the Maharashtra

Revenue Tribunal had become

functus officio, insofar as all Appeals

filed under Section 44 of the RERA on account of plain language of

Section 43(4) of the RERA and submitted that upon constitution of the

Maharashtra Real Estate Appellate Tribunal on 8

May 2018 all such

Appeals were transferred to it by operation of Section 43(4) of the

RERA from the Maharashtra Revenue Tribunal.

11.9.It is submitted that the designation of any Tribunal as the

Appellate Tribunal under the RERA under the provisions of the first

proviso to Section 43(4) was merely a temporary provision and cannot

be held to confer jurisdiction beyond the limited time for which such

jurisdiction was conferred on the Maharashtra Revenue Tribunal. It is

submitted that on and from 8

May 2018, the Maharashtra Revenue

8MANU/JH/686/2014

9Company Appeal (AT) No.115 of 2022 dated 16/05/2024

SA 251.2022.doc 29.12

Tribunal has no jurisdiction to adjudicate any Appeal under Section 44

of the RERA. It is submitted that proviso to sub-Section 43(4) are in the

nature of transitional provisions and required to be so interpreted so as

to facilitate change from one statutory regime to another and the

operation of such provision is expected to be temporary. Such

transitional provisions become spent on all the past circumstances which

it is designed to deal with have been dealt with. It is further submitted

that the transitional provision is not authorized to widen the ambit of

substantive legislation.

11.10.It is a well settled canon of statutory interpretation that any

alleged hardship or inconvenience that may arise out of the

interpretation of a statutory provision cannot alter meaning of the

statute inferred by the legislature if such meaning is clear on the face of

the provision. It is submitted that the language of the proviso to Section

43(4) of the RERA is plain and unambiguous. Accordingly, no contention

about any alleged hardship to the Respondents/Allotteees can be

determinative of its interpretation.

11.11.It is further submitted that a litigant cannot contend that he / she

was remediless since the constitutional jurisdiction of this Hon'ble Court

under Article 226 of the Constitution of India was always available in the

event of any circumstance where immediate remedy / relief was not

available to such litigant.

SA 251.2022.doc 29.12

11.12.In any event, the Respondents will suffer no hardship or

inconvenience if this dispute / case is remanded back to the Maharashtra

Real Estate Appellate Tribunal, duly constituted as per Section 43 of the

RERA and deciding the Appellant's appeal afresh by Maharashtra Real

Estate Appellate Tribunal and delivering a reasoned order.

11.13.It is well settled that the issue of lack of subject matter

jurisdiction can be raised at any point of time. It is submitted that an

order passed by any Tribunal lacking inherent jurisdiction would be

nullity. The principles of estoppel, waiver and acquiescence or even

res

judicata

which are procedural in nature would have no application in a

case where an order has been passed by the Tribunal/Court which has no

authority in that behalf. Any order passed by the Court without

jurisdiction would be

coram non-judice being a nullity and therefore, the

same ordinarily should not be given effect. To substantiate said

contention, reliance is placed on the following decisions of the Supreme

Court :

(i) Sushil Kumar Mehta (supra) (paragraph No. 26)

(ii)Hasham Abbas Sayyad v. Usman Abbas Sayyad

(Paragraphs 22-24);

(iii) Harshad Chiman Lal Modi v. DLF Universal Ltd.

(Paragraphs 29 to 37)

10 (2005) 2 SCC 355

11 (2005) 7 SCC 791

SA 251.2022.doc 29.12

11.14.It is submitted that in any event, the Impugned Order was passed

by the Maharashtra Revenue Tribunal without jurisdiction, contrary to

the provisions of Section 43 of the RERA, and thus the Impugned Order

is void and liable to be quashed and set aside.

11.15Learned Counsel submitted that the statutory provision of Section

43 of RERA is unambiguous and the plain words will have to be given

effect to irrespective of the consequences. The reliance is placed on

decision of the Supreme Court in the case of Nelson Motis v. Union of

India

11.16It is well settled that hardship or inconvenience that may arise

out of the interpretation of a statutory provision cannot alter the

meaning of the language employed by the legislature, if the meaning is

clear from the provisions.

11.17Rule 8 of the Maharashtra Real Estate Appellate Tribunal

(Members, Officers And Employees) (Appointment And Service

Conditions), Rules 2017 provides that every person appointed as the

Chairperson or Member of the Maharashtra Real Estate Appellate

Tribunal shall, before entering upon office, make him subscribe an oath

of office and secrecy in the forms prescribed thereunder before the

12 (1992) 4 SCC 711

SA 251.2022.doc 29.12

persons designated thereunder. The said Rules have been promulgated

in exercise of powers under Section 84(1), 84(2)(v) to 84(2)(z) and

84(2)(zf) of RERA.

11.18Both section 43 and Rule 8 operate in different spheres. Section

43 deals with the establishment of the Tribunal which is a one-time

event; as against this, Rule 8 would come into play each time that a new

Member/Chairperson is to be appointed. Rule 8 relates to the

administrative procedure of persons appointed in terms of section 84

taking oath. As against this, section 43 relates to an antecedent event of

the Tribunal getting established. There is no overlap, for Rule 8 to have

any bearing qua the event under section 43. This Rule has no nexus to

the establishment of the Appellate Tribunal under Section 43(1) and the

transfer of cases pending before the Maharashtra Revenue Tribunal

[designated under the first proviso to Section 43(4)] to the Appellate

Tribunal so established. The definition of the term ‘Appellate Tribunal’ in

Rule 2(1)(b) of the said Rules in fact refers to the Maharashtra Real

Estate Appellate Tribunal established under Section 43(1) of RERA by

the State Government.

11.19It is well settled that subordinate legislation can always be only in

aid of the current statute and cannot override the parent statute and no

subordinate legislation can be interpreted in the manner which renders

SA 251.2022.doc 29.12

any part of the parent statute otiose or nugatory. Reliance is placed on

the Judgment of the Supreme Court in the decision of Sansera

Engineering Ltd. v. Deputy Commissioner

and more particularly on

Paragraphs 10 and 11 of the same.

11.20Notification dated 8th May 2018 is a notification establishing the

Maharashtra Real Estate Appellate Tribunal under Section 43(1) of

RERA, since the establishment of a Tribunal must precede appointment

of the Chairperson/Members of such Tribunal. There can be no

appointment of the Chairperson/Members before the establishment of

the Appellate Tribunal.

11.21It is submitted that Section 43(1) of the RERA contemplates

establishment of the Appellate Tribunal, whereas Section 46 of the

RERA relates to appointment of Chairperson/Members. Appointment

under Section 46 can only follow establishment under Section 43(1).

Therefore, Section 46 power can be exercised only upon establishment,

as appointment presupposes establishment under Section 43(1). Thus,

the contention of the Respondent that the said Notification dated 8th

May 2018 is not a notification under Section 43(1) is misconceived and

untenable.

13 2022 SCC Online SC 1635

SA 251.2022.doc 29.12

11.22 The Maharashtra Real Estate Appellate Tribunal has itself

accepted that the Tribunal stood established under the said Notification

dated 8

May 2018, which is evident from its website.

11.23The Notification dated 24

October 2019 supersedes the said

Notification dated 28

December 2017, whereby the Maharashtra

Revenue Tribunal was designated the Appellate Tribunal until the

Maharashtra Real Estate Appellate Tribunal was set up, and not the said

Notification dated 8

May 2018 whereby the Maharashtra Real Estate

Appellate Tribunal was established.

11.24It is submitted that if the said Notification dated 24

October

2019 is treated as the notification of establishment of the Maharashtra

Real Estate Appellate Tribunal, it will lead to absurd results since, for

the period between 24

December 2018 and 24

October 2019, there

would be two Appellate Tribunals, one designated under first proviso to

Section 43(4) of RERA (Maharashtra Revenue Tribunal) and the other

functioning under Section 43(1) of RERA. Thus, the said Notification

dated 24

October 2019 cannot be treated as the Notification under

Section 43(1).

SA 251.2022.doc 29.12

11.25 A combined reading of the said Notifications demonstrates the

distinction made by the statute between establishment (under Section

43), appointment (under Section 46) and its functioning.

11.26It is submitted that a plain reading of Section 43(1) and 43(4)

and the provisos appended to Section 43(4) make it clear that upon the

establishment of the Appellate Tribunal by the only method prescribed

under Section 43(1), i.e., by Notification on 8

May 2018, the Appellate

Tribunal stood established and all appeals stood transferred from the

Maharashtra Revenue Tribunal to Maharashtra Real Estate Appellate

Tribunal.

SUBMISSIONS OF THE RESPONDENTS CONCERNING FIRST

SUBSTANTIAL QUESTION OF LAW:

13.On the other hand, Mr. Anjani Kumar Singh, learned Counsel

appearing for the Respondents in all the Second Appeals raised the

following contentions:

12.1It is submitted that a reply given by letter dated 27

May 2025 to

one of the flat purchasers by the Housing Department of Maharashtra

Government along with Government Gazette dated 24

October 2019

specifically makes clear that the Government of Maharashtra

established Maharashtra Real Estate Appellate Tribunal for the State of

Maharashtra and the said Tribunal started functioning w.e.f. 24

SA 251.2022.doc 29.12

December 2018. Learned Counsel submitted that even the factual

position as set out by the Appellants in their contentions shows that the

State Government notified the Constitution of the Maharashtra Real

Estate Appellate Tribunal under Section 43(1) of the RERA by

Notification dated 8

May 2018 and the oath ceremony of the

Chairperson and members of the Appellate Tribunal took place on 24

December 2018. Thus, it is submitted that the Appellate Tribunal

started functioning only w.e.f. 24

December 2018.

12.2. It is submitted that establishment as contemplated under Section

43 of the RERA includes functional status of the establishment. Reliance

is placed on the definition of “establishment” as defined under Black’s

Law Dictionary. In that behalf it is stated on Page 53 of the written

submissions in Paragraph No.4 as under:-

“

4) The definition of "Establishment" is defined under

Black's Law Dictionary as under: n.1: the act of

establishing, the state or condition of being established. 2:

an institution or place of business. 3: a group of people

who are in power or who control or exercise, great

influence or something. The meaning of the word

"establishment" clearly shows that an established

institution, where a group of the people who are in power

and who control or exercise great influence, which clearly

gives a meaning that the place of institution, which has to

be a "functional" institution. Therefore, mere constitution /

appointment of (permanent) appellate Tribunal as per

order/ notification dated 8th May 2018 does not makes it

"functional" rather, the permanent appellate tribunal only

SA 251.2022.doc 29.12

became "functional" from 24th December 2018, and after

being "functional", only the automatic transfer was

supposed to be valid and applicable as per the second

proviso of section 43(4). It is submitted that the mandates

of second proviso of section 43(4) never accrued untill 24th

December 2018. The contentions of the appellant are

wholly misconceived, illegal and misleading and not

maintainable

. ”

12.3Reliance is placed on the decision of the Chhattisgarh High Court

in the case of Gold Bricks Infrastructures Pvt. Ltd. v. Sumeet Agrawal

and more particularly on paragraph No.24 of the same where

importance of the functionality of the Tribunal was emphasized by the

Chhattisgarh High Court.

12.4Learned Counsel submitted that the reliance placed by the

Appellant on the mere date of constitution is misplaced. It is submitted

that procedural time-frames for public bodies are directory in nature

unless specific consequences are prescribed. To substantiate said

contention, reliance is placed on the decision of the Supreme Court in

the case of Mohan Singh v. IAAI

12.5It is submitted that the second proviso to Section 43(4) of RERA

envisages automatic transfer of cases only upon the functional

establishment of the Appellate Tribunal. As demonstrated through the

Government Gazette dated 25 October 2019, the tribunal became

142023 SCC OnLine Chh 315

15 (1997) 9 SCC 132

SA 251.2022.doc 29.12

functional only on 24 December 2018. Hence, the order of 1st

November 2018 passed by the MRT was valid, subsisting, and within

jurisdiction.

12.6Section 43 of the RERA provides for the constitution of the Real

Estate Appellate Tribunal. Sub-section (4) thereof contains two

provisos, which are of seminal importance to the present issue. The first

proviso empowers the State Government to designate, until the

establishment of the permanent Appellate Tribunal, any other judicial

authority or tribunal to discharge the functions of the Appellate

Tribunal under the Act. The second proviso to Section 43(4)

categorically stipulates that only “after the Appellate Tribunal under this

section is established”, all matters pending with the designated

Appellate Tribunal shall stand transferred to the permanent Appellate

Tribunal so established, and shall be heard from the stage at which they

stood transferred.

12.7It is therefore manifest from the plain language of the statute that

the triggering point for “automatic transfer” of matters is the

“establishment” of the permanent Appellate Tribunal. The establishment

of permanent appellate tribunal inherently contains a “functional”

permanent appellate tribunal and not merely the issuance of a

notification dated 8

May 2018 appointing its Chairperson or Members

SA 251.2022.doc 29.12

in abstraction from their assumption of office in accordance with law.

The assumption of the Office of the Chairman and members only takes

place in accordance with law on or after the “Oath of the office and

Secrecy” as per rule 8 of the Maharashtra Real Estate Appellate Tribunal

(Members, Officers and Employees) (Appointment and Service

Conditions) Rules, 2017. But, the appellants erroneously argued that

the notification dated 8

May 2018 had established the permanent

Appellate Tribunal and therefore, all the matters pending before the

Maharashtra Revenue Tribunal (designated Maharashtra, Real Estate

Appellate Tribunal) ought to have been transferred on 8

May 2018 to

the (Notified) Permanent Appellate Tribunal.

12.8Rule 8 of the 2017 Rules mandates, in unequivocal terms, that

every person appointed as the Chairperson or as a Member of the

Appellate Tribunal shall, before entering upon his or her office, make

and subscribe an “Oath” of Office and Secrecy in Form I and Form II

appended to the said Rules. The requirement of taking the oath is not a

mere procedural formality. It is a substantive statutory condition

precedent for assuming office and for the Tribunal to become legally

functional. Until such “oath” is taken, the permanent Appellate

Tribunal, though constituted on paper, cannot be said to be

SA 251.2022.doc 29.12

“established” or “functional” within the meaning of the second proviso

to Section 43(4) of the RERA.

12.9The factual chronology, which is not in dispute and stands

conclusively established from official records, is as follows:

(a) By Government Notification dated 28.12.2017, the Maharashtra

Revenue Tribunal (“MRT”) was designated to function as the

Maharashtra Real Estate Appellate Tribunal in exercise of

powers under the first proviso to Section 43(4) of the RERA

(Designated Appellate Tribunal).

(b) The permanent Maharashtra Real Estate Appellate Tribunal,

comprising the Hon’ble Chairperson and Members, was notified

on 8

May 2018.

with Rule 8 of the 2017 Rules, took place on 24.12.2018

admittedly as per the annual report relied upon by the

appellants. Accordingly, the Chairman and members have

entered in their office or assumed their office and became

functional on 24

December 2018.

SA 251.2022.doc 29.12

(d) The Government of Maharashtra, Housing Department, by

Gazette Notification dated 24.10.2019, expressly declared and

confirmed that “the said Tribunal has been functional with effect

from 24

December 2018”.

(e) The impugned orders under challenge in the present Second

Appeals were passed on 01.11.2018, i.e., prior to 24.12.2018.

12.10In view of the aforesaid statutory provisions and admitted facts, it

is submitted that:

(a) As on 01.11.2018, the permanent Maharashtra Real Estate

Appellate Tribunal had not become functional, since the

Chairperson and Members had not yet taken the mandatory

Oath of Office and Secrecy under Rule 8 of the 2017 Rules.

Consequently, the condition precedent for the applicability of the

second proviso to Section 43(4) that the Appellate Tribunal “is

established” was not satisfied as on the said date.

(b) The jurisdiction to hear and decide appeals under the RERA,

therefore, continued to vest validly and lawfully in the

Maharashtra Revenue Tribunal, which was functioning as the

SA 251.2022.doc 29.12

designated Appellate Tribunal under the Notification dated

28.12.2017.

matters is legally unsustainable, as such transfer could operate

only on and from 24.12.2018, and not prior thereto.

(d) It is thus inexorably follows that the impugned orders dated

01.11.2018 were passed by a forum possessing complete

jurisdiction, authority, and competence in law, and are therefore

valid, binding, and immune from challenge.

12.11In light of the foregoing, the substantial question of law raised by

the Appellants (Question No. 6) is completely illusory and does not, in

fact, arise for consideration. The said question proceeds on an

erroneous assumption that the permanent Appellate Tribunal was

established and functional prior to 01.11.2018, which assumption is

demonstrably contrary to the statutory Rules and official Government

Notifications. The said question of law, therefore, deserves to be

answered against the Appellants and in favour of the Respondents,

holding that the Maharashtra Revenue Tribunal validly exercised

appellate jurisdiction on the date of the impugned orders.

SA 251.2022.doc 29.12

12.12During the course of oral submissions on 19

January 2026, the

Appellant vehemently relied upon a document namely Government

Order No. STASNA 2017/P.No.125 DU V PU.-2 dated 8

May 2018, and

erroneously sought to project the said document as a “notification”

issued under Section 43(1) of RERA. Prior thereto the aforesaid Govt.

Order dated 8

May 2018, by Gazette Notification No. Rera.

2017/C.R.116/DVP dated 28 December 2017, the State of Maharashtra

had designated the Maharashtra Revenue Tribunal to function as the

Maharashtra Real Estate Appellate Tribunal under the first proviso to

Section 43(4) of the RERA. After the aforesaid Govt. Order dated 8

May 2018, the Government of Maharashtra issued Notification No.

Misc.2019/C.R.129/(Part-1)/RR-2 dated 24 October 2019 under

Section 43(1) of the Act, in supersession of the earlier notification no.

Rera.2017/C.R.116/DVP dated 28

December 2017 (Annexure-2),

formally establishing the Maharashtra Real Estate Appellate Tribunal

and notifying its functionality with retrospective effect from 24

December 2018. Thus, the alleged Government Order dated 8

May

2018 is not a statutory notification under Section 43(1) of the Act.

REASONING REGARDING FIRST SUBSTANTIAL QUESTION OF LAW :-

14.Before consideration of the first substantial question of law, it is

necessary to set out the relevant legal provisions:

SA 251.2022.doc 29.12

i.The RERA received the assent of the President of India on 25

March 2016 and published in the Gazette of India dated 26-3-2016. By

Notification dated 26

April 2016 issued in exercise of the powers

conferred by Sub-Section (3) of Section 1 of RERA the Central

Government appointed the 1

day of May 2016 as the date on which

Sections 2, 20 to 39, 41 to 58, 71 to 78 and 81 to 92 came into force. By

Notification dated 19

April 2017 issued in exercise of the powers

conferred by Sub-Section (3) of Section 1 of RERA the Central

Government appointed the 1

day of May 2017 as the date on which

Sections 3 to 19, 40, 59 to 70, 79 and 80 came into force.

ii.Sections 20, 21 and 22 of RERA are concerning establishment

and incorporation of Real Estate Regulatory Authority, composition of

Authority, qualifications of Chairperson and Members of Authority and

manner of their appointment. The said sections 20, 21 and 22 are

reproduced herein below for ready reference:

20. Establishment and incorporation of Real Estate

Regulatory Authority

(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 Authority to be

known as the Real Estate Regulatory Authority to

exercise the powers conferred on it and to perform the

functions assigned to it under this Act:

Provided that the appropriate Government of two or

more States or Union territories may, if it deems fit,

establish one single Authority:

SA 251.2022.doc 29.12

Provided further that the appropriate Government

may, if it deems fit, establish more than one Authority

in a State or Union territory, as the case may be:

Provided also that until the establishment of a

Regulatory Authority under this section, the

appropriate Government shall, by order, designate any

Regulatory Authority or any officer preferably the

Secretary of the department dealing with Housing, as

the Regulatory Authority for the purposes under this

Act:

Provided also that after the establishment of the

Regulatory Authority, all applications, complaints or

cases pending with the Regulatory Authority

designated, shall stand transferred to the Regulatory

Authority so established and shall be heard from the

stage such applications, complaints or cases are

transferred.

(2) The Authority shall be a body corporate by the

name aforesaid having perpetual succession and a

common seal, with the power, subject to the provisions

of this Act, to acquire, hold and dispose of property,

both movable and immovable, and to contract, and

shall, by the said name, sue or be sued.

21. Composition of Authority.—The Authority shall

consist of a Chairperson and not less than two whole

time Members to be appointed by the appropriate

Government.

22. Qualifications of Chairperson and Members of

Authority.—The Chairperson and other Members of

the Authority shall be appointed by the appropriate

Government on the recommendations of a Selection

Committee consisting of the Chief Justice of the High

Court or his nominee, the Secretary of the Department

dealing with Housing and the Law Secretary, in such

manner as may be prescribed, from amongst persons

having adequate knowledge of and professional

experience of at-least twenty years in case of the

Chairperson and fifteen years in the case of the

Members in urban development, housing, real estate

SA 251.2022.doc 29.12

development, infrastructure, economics, technical

experts from relevant fields, planning, law, commerce,

accountancy, industry, management, social service,

public affairs or administration:

Provided that a person who is, or has been, in the

service of the State Government shall not be appointed

as a Chairperson unless such person has held the post

of Additional Secretary to the Central Government or

any equivalent post in the Central Government or

State Government:

Provided further that a person who is, or has been, in

the service of the State Government shall not be

appointed as a member unless such person has held

the post of Secretary to the State Government or any

equivalent post in the State Government or Central

Government.

(Emphasis added)

iii.Sections 43, 45 and 46 of RERA are concerning establishment

and incorporation of Real Estate Appellate Tribunal, composition of Real

Estate Appellate Tribunal and qualifications of Chairperson and

Members of Real Estate Appellate Tribunal and manner of their

appointment. The said sections 43, 45 and 46 are reproduced herein

below for ready reference:

“

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.

SA 251.2022.doc 29.12

(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 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.

45. Composition of Appellate Tribunal.—The Appellate

Tribunal shall consist of a Chairperson and not less

than two whole time Members of which one shall be a

SA 251.2022.doc 29.12

Judicial member and other shall be a Technical or

Administrative Member, to be appointed by the

appropriate Government.

Explanation.—For the purposes of this Chapter,—

(i) “Judicial Member” means a Member of the

Appellate Tribunal appointed as such under clause (b)

of sub-section (1) of section 46;

(ii) “Technical or Administrative Member” means a

Member of the Appellate Tribunal appointed as such

under clause (c) of sub-section (1) of section 46.

46. Qualifications for appointment of Chairperson and

Members.—(1) A person shall not be qualified for

appointment as the Chairperson or a Member of the

Appellate Tribunal unless he,—

(a) in the case of Chairperson, is or has been a Judge

of a High Court; and

(b) in the case of a Judicial Member he has held a

judicial office in the territory of India for at least

fifteen years or has been a member of the Indian Legal

Service and has held the post of Additional Secretary

of that service or any equivalent post, or has been an

advocate for at least twenty years with experience in

dealing with real estate matters; and

Member, he is a person who is well-versed in the field

of urban development, housing, real estate

development, infrastructure, economics, planning, law,

commerce, accountancy, industry, management, public

affairs or administration and possesses experience of

at least twenty years in the field or who has held the

post in the Central Government or a State Government

equivalent to the post of Additional Secretary to the

Government of India or an equivalent post in the

Central Government or an equivalent post in the State

Government.

(2) The Chairperson of the Appellate Tribunal shall be

appointed by the appropriate Government in

consultation with the Chief Justice of High Court or

his nominee.

SA 251.2022.doc 29.12

(3) The Judicial Members and Technical or

Administrative Members of the Appellate Tribunal

shall be appointed by the appropriate Government on

the recommendations of a Selection Committee

consisting of the Chief Justice of the High Court or his

nominee, the Secretary of the Department handling

Housing and the Law Secretary and in such manner as

may be prescribed.”

(Emphasis added)

iv.Rules 3, 4, 5 and 9 of the Maharashtra Real Estate Regulatory

Authority, Chairperson, Members Officers and Other Employees

(Appointment and Service Conditions) Rules, 2017 (“Real Estate

Authority Rules, 2017”) are also relevant and are reproduced herein

below:

“

3. Real Estate Regulatory Authority.

The Government may by notification in the Official

Gazette establish an Authority under sub-section (1) of

section 20 of the Act for such area as may be specified

in the notification.

4. Selection of Chairperson and other Members of

Authority.

(1) The State Government shall make a reference to

the Selection Committee for appointment of the

Chairperson and Members of the Authority or when

any vacancy in the office of the Chairperson or

Member arises or likely to arise in the Authority.

(2) The Selection Committee may, for the purpose of

selection of the Chairperson or Member of the

Authority, follow such procedure as it may as deem fit.

(3) The Selection Committee shall make a

recommendation to the State Government for the

consideration in the form of a panel of not more than

three persons, in order of preference, separately to fill

the vacancy or vacancies referred to by the State

Government.

SA 251.2022.doc 29.12

(4) The Selection Committee shall make its

recommendations to the State Government, within, a

period not exceeding sixty days from the date of

reference made under sub-rule (1).

(5) The Selection Committee shall normally hold its

meeting at Mumbai or at such places in the State, as

may be decided by the Chairperson.

(6) The Notice/Agenda, as the case may be, for the

meeting of the Selection Committee shall be issued by

the Convener after fixing the date and venue for such

meeting in consultation with the Chairperson of the

Selection Committee.

(7) The Secretary-in-Charge of the Housing

Department shall be the convener of the Selection

Committee.”

5. Appointment of Chairperson and Members.

The State Government shall consider the

recommendations of the Selection Committee for the

appointment of the Chairperson and Members or to fill

the vacancy in order of preference as recommended by

the Selection Committee. If the State Government

appoints person not according to the order of

preference, the Government shall record the reasons

in writing therefor.

9. Oath of office and secrecy.

(1) Every person appointed as the Chairperson of the

Authority shall, before entering his office, make and

subscribe an Oath of Office and Secrecy, in Form I and

Form II, respectively, appended to these Rules, before

the Minister-in-Charge of the Housing Department of

the Government.

(2) Every person appointed as a Member of the

Authority shall, before entering his office, make and

subscribe an Oath of Office and Secrecy, in Form I and

Form II, respectively, appended to these Rules, before

the Chairperson of the Authority.”

(Emphasis added)

SA 251.2022.doc 29.12

v.Rules 3, 4, 5 and 8 of the Maharashtra Real Estate Appellate

Tribunal (Members Officers and Employees) (Appointment and Service

Conditions) Rules, 2017 (“Real Estate Appellate Tribunal Rules”) are

relevant, which are reproduced herein below:

“

3. Maharashtra Real Estate Appellate Tribunal

The Government may by notification in the Official

Gazettee stablish Appellate Tribunal for such area as

may be specified in the notification.

4. Procedure of Selection Committee

(1) The State Government shall make a reference to

the Selection Committee for appointment of Members

of the Appellate Tribunal or when any vacancy arises

or is likely to arise in the Appellate Tribunal.

(2) The Selection Committee may, for the purpose of

selection of the Members of Appellate Tribunal, follow

such procedure as it may deem fit.

(3) The Selection Committee shall make a

recommendation to the State Government for

consideration in the form of a panel of not more than

three persons in order of preference separately to fill

the vacancy or vacancies referred to by the State

Government.

(4) The Selection Committee shall make its

recommendations to the State Government, within a

period not exceeding sixty days from the date of

reference made under sub-rule (1).

(5) The Selection Committee shall normally hold its

meetings at Mumbai or at such places in the State, as

may be decided by the Chairperson.

(6) The Notice or Agenda, as the case may be, for the

meeting of the Selection Committee shall be issued by

the convenor after fixing the date and venue for such

meeting in consultation with the Chairperson.

SA 251.2022.doc 29.12

(7) The Secretary- in- charge of the Housing

Department shall be the convener of the Selection

Committee.

5. Appointment of Member

The State Government shall consider the

recommendation of the Selection Committee for the

appointment of Member or fill the vacancy in order of

preference as recommended by the Selection

Committee. If the State Government appoints person

not according to the order of preference, the

Government shall record the reasons in writing

therefor.

8. Oath of office and secrecy

(1)Every person appointed as the Chairperson of the

Appellate Tribunal shall, before entering upon his

office, make and subscribe an Oath of Office and

Secrecy, in Form I and Form II, respectively, appended

to these Rules.

(2) Every person appointed as a Member shall, before

entering upon his office, make and subscribe an Oath

of Office and Secrecy, in Form I and Form II,

respectively, appended to these Rules.”

15.Before considering the scheme of RERA as per the above

provisions which are relevant for the purpose of deciding the First

Substantial Question of Law, it is necessary to set out the statement of

Objects and Reasons of RERA.

Statement of Objects and Reasons:

“(1) The real estate sector plays a catalytic role in

fulfilling the need and demand for housing and

infrastructure in the country. While this sector has

grown significantly in recent years, it has been largely

unregulated, with absence of professionalism and

standardisation and lack of adequate consumer

protection. Though the Consumer Protection Act, 1986

SA 251.2022.doc 29.12

is available as a forum to the buyers in the real estate

market, the recourse is only curative and is not

adequate to address all the concerns of buyers and

promoters in that sector. The lack of standardisation,

has been a constraint to the healthy and orderly

growth of industry. Therefore, the need for regulating

the sector has been emphasised in various forums.

(2) In view of the above, it becomes necessary to

have a Central legislation, namely, the Real Estate

(Regulation and Development) Bill, 2013, in the

interests of the effective consumer protection,

uniformity and standardisation of business practices

and transactions in the real estate sector. The

proposed Bill provides for the establishment of the

Real Estate Regulatory Authority (the Authority) for

regulation and promotion of real estate sector and to

ensure sale of plot, apartment or building, as the case

may be, in an efficient and transparent manner and to

protect the interest of consumers in real estate sector

and establish the Real Estate Appellate Tribunal to

hear appeals from the decisions, directions or orders

of the Authority.”

(3)The proposed Bill will ensure greater

accountability towards consumers, and significantly

reduce frauds and delays as also the current high

transaction costs. It attempts to balance the interests

of consumers and promoters by imposing certain

responsibilities on both. It seeks to establish symmetry

of information between the promoter and purchaser,

transparency of contractual conditions, set minimum

standards of accountability and a fasttrack dispute

resolution mechanism. The proposed Bill will induct

professionalism and standardisation in the sector, thus

paving the way for accelerated growth and

investments in the long run.

4. The Real Estate (Regulation and Development) Bill,

2013, inter alia, provides for the following, namely:—

(a) to impose an obligation upon the promoter not to

SA 251.2022.doc 29.12

book, sell or offer for sale, or invite persons to

purchase any plot, apartment or building, as the case

may be, in any real estate project without registering

the real estate project with the Authority;

(b) to make the registration of real estate project

compulsory in case where the area of land proposed to

be developed exceed five hundred square meters or

number of apartments proposed to be developed

exceed eight;

not to facilitate sale or purchase of any plot,

apartment or building, as the case may be, without

registering himself with the Authority;

(d) to impose liability upon the promoter to pay such

compensation to the allottees, in the manner as

provided under the proposed legislation, in case if he

fails to discharge any obligations imposed on him

under the proposed legislation;

(e) to establish an Authority to be known as the Real

Estate Regulatory Authority by the appropriate

Government, to exercise the powers conferred on it

and to perform the functions assigned to it under the

proposed legislation;

(f) the functions of the Authority shall, inter alia,

include-

(i) to register and regulate real estate projects and real

estate agents register under this Act;

(ii) to publish and maintain a website of records for

public viewing of all real estate projects for which

registration has been given, with such details as may

be prescribed including information provided in the

application for which registration has been granted;

SA 251.2022.doc 29.12

(iii) to ensure compliance of the obligations cast upon

the promoters, the allottees and the real estate agents

under the proposed legislation;

(g) to establish an Advisory Council by the Central

Government to advice and recommend the Central

Government on-

(i) matters concerning the implementation of the

proposed legislation;

(ii) major questions of policy;

(iii) protection of consumer interest;

(iv) growth and development of the real estate sector,

(h) to establish the Real Estate Appellate Tribunal by

the appropriate Government to hear appeals from the

direction, decision or order of the Authority or the

adjudicating officer;

(i) to appoint an adjudicating officer by the Authority

for adjudging compensation under sections 12, 14, 18

and 19 of the proposed legislation;

(j) to make provision for punishment and penalties for

contravention of the provisions of the proposed

legislation and for non-compliance of orders of

Authority or Appellate Tribunal;

(k) to empower the appropriate Government to

supersede the Authority on certain circumstances

specified in the proposed legislation;

(l) to empower the appropriate Government to issue

directions to the Authority and obtain reports and

returns from it.

SA 251.2022.doc 29.12

5. The Notes on clauses explain in detail the various

provisions contained in the Real Estate (Regulation

and Development) Bill, 2013.

6. The Bill seeks to achieve the above objectives.”

16.Objects and Reasons of RERA were discussed by the Supreme

Court in the case of Newtech Promoters And Developers Private Limited

V. State of Uttar Pradesh And Others

, in paragraph Nos.5 to 11 which

read as under:

“Objects and Reasons of the 2016 Act

5. Over the past two decades, with the growth of

population and the attraction of the people to shift

towards urbanisation, the demand for housing

increased manifold. The Government also introduced

various housing schemes to cope with the increasing

demand but the experience shows that demands of the

housing sector could not be meted out by the

Government at its own level for various reasons to

meet the requirement, the private players entered into

the real estate sector in meeting out the rising demand

of housing. Though availability of loans, both from

public and private banks, become easier, still the high

rate of interest and the EMI has posed additional

financial burden on the people.

6. At the given time, the real estate and housing sector

was largely unregulated and the consequence was that

consumers were unable to procure complete

information for enforced accountability towards

builders and developers in the absence of an effective

mechanism in place. Though the Consumer Protection

Act, 1986 was available to cater the demand of

homebuyers in the real estate sector but the

experience shows that this mechanism was inadequate

to address the needs of the homebuyers and promoters

16 (2021) 18 SCC 1

SA 251.2022.doc 29.12

in the real estate sector.

7. At this juncture, the need for Real Estate

(Regulation) Bill was badly felt for establishing an

oversight mechanism to enforce accountability to the

real estate sector and providing an adjudicating

machinery for speedy dispute redressal mechanism

and safeguarding the investments made by the

homebuyers through legislation to the extent

permissible under the law.

8. The Statement of Objects and Reasons of the Act

indicates that the primal position of the Regulatory

Authority is to regulate the real estate sector having

jurisdiction to ensure compliance with the obligation

cast upon the promoters. The opening Statement of

Objects and Reasons which has a material bearing on

the subject reads as follows:

“The real estate sector plays a catalytic role in

fulfilling the need and demand for housing and

infrastructure in the country. While this sector has

grown significantly in recent years, it has been largely

unregulated, with absence of professionalism and

standardisation and lack of adequate consumer

protection. Though the Consumer Protection Act, 1986

is available as a forum to the buyers in the real estate

market, the recourse is only curative and is not

adequate to address all the concerns of buyers and

promoters in that sector. The lack of standardisation,

has been a constraint to the healthy and orderly

growth of industry. Therefore, the need for regulating

the sector has been emphasised in various forums.

2. In view of the above, it becomes necessary to have a

Central legislation, namely, the Real Estate

(Regulation and Development) Bill, 2013, in the

interests of the effective consumer protection,

uniformity and standardisation of business practices

and transactions in the real estate sector. The

proposed Bill provides for the establishment of the

Real Estate Regulatory Authority (the Authority) for

SA 251.2022.doc 29.12

regulation and promotion of real estate sector and to

ensure sale of plot, apartment or building, as the case

may be, in an efficient and transparent manner and to

protect the interest of consumers in real estate sector

and establish the Real Estate Appellate Tribunal to

hear appeals from the decisions, directions or orders

of the Authority.”

9. It was introduced with an object to ensure greater

accountability towards consumers, to significantly

reduce frauds and delays and also the current high

transaction costs, and to balance the interests of

consumers and promoters by imposing certain

responsibilities on both, and to bring transparency of

the contractual conditions, set minimum standards of

accountability and a fast-track dispute resolution

mechanism. It also proposes to induct professionalism

and standardisation in the sector, thus paving the way

for accelerated growth and investments in the long

run.

10. Some of the relevant Objects and Reasons are

extracted as under:

“4. (d) to impose liability upon the promoter to pay

such compensation to the allottees, in the manner as

provided under the proposed legislation, in case if he

fails to discharge any obligations imposed on him

under the proposed legislation;

***

(f) the functions of the Authority shall, inter alia,

include—

(i) to render advice to the appropriate Government in

matters relating to the development of real estate

sector;

(ii) to publish and maintain a website of records of all

real estate projects for which registration has been

given, with such details as may be prescribed;

SA 251.2022.doc 29.12

(iii) to ensure compliance of the obligations cast upon

the promoters, the allottees and the real estate agents

under the proposed legislation;

* * *

(i) to appoint an adjudicating officer by the Authority

for adjudging compensation under Sections 12, 14 and

16 of the proposed legislation;

11. The Bill provides for establishment of the

Authority for regulation and promotion of real estate

sector, to ensure sale of plot, apartment or building 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 provide the

adjudicating mechanism for speedy dispute redressal

mechanism by establishing the Regulatory Authority

and the adjudicating officer and in hierarchy, the

Appellate Tribunal for early and prompt disposal of

the complaint being instituted primarily by the home-

buyers for whom this Act has been enacted by

Parliament in 2016.”

(Emphasis added)

17.Thus, the following inter alia are the important objects and

purposes of RERA:-

i.The real estate and housing sector was largely

unregulated and the consequence was that consumers were

unable to procure complete information for enforced

accountability towards builders and developers in the

absence of an effective mechanism in place.

ii.The Consumer Protection Act, 1986 was available to

cater the demand of homebuyers in the real estate sector

SA 251.2022.doc 29.12

but the experience shows that this mechanism was

inadequate to address the needs of the homebuyers and

promoters in the real estate sector.

iii.The need for Real Estate (Regulation) Bill was badly

felt for establishing an oversight mechanism to enforce

accountability to the real estate sector and providing an

adjudicating machinery for speedy dispute redressal

mechanism and safeguarding the investments made by the

homebuyers through legislation to the extent permissible

under the law.

iv.The Statement of Objects and Reasons of RERA

indicates that the primal position of the Regulatory

Authority is to regulate the real estate sector having

jurisdiction to ensure compliance with the obligation cast

upon the promoters, the allottees and the real estate

agents.

v.The proposed Bill provides for the establishment of the

Real Estate Regulatory Authority for regulation and

promotion of real estate sector and to ensure sale of plot,

apartment or building, as the case may be, in an efficient

and transparent manner and to protect the interest of

consumers in real estate sector and establish the Real Estate

SA 251.2022.doc 29.12

Appellate Tribunal to hear appeals from the decisions,

directions or orders of the Authority.

vi.It was introduced with an object to ensure greater

accountability towards consumers, to significantly reduce

frauds and delays and also the current high transaction

costs, and to balance the interests of consumers and

promoters by imposing certain responsibilities on both, and

to bring transparency of the contractual conditions, set

minimum standards of accountability and a fast-track

dispute resolution mechanism.

vii.to impose liability upon the promoter to pay such

compensation to the allottees, in the manner as provided

under the proposed legislation, in case if he fails to

discharge any obligations imposed on him under the

proposed legislation;

18.The perusal of Sections 20, 21, 22, 43, 45 and 46 of RERA as also

the relevant Rules as set out herein above reflect the following scheme

of RERA in the context of the First Substantial Question of Law.:-

i.The appropriate Government shall within a

period of one year from the date of coming into force

of RERA, by Notification establish an Authority to be

SA 251.2022.doc 29.12

known as Real Estate Regulatory Authority. The

appropriate Government, until the establishment of a

Regulatory Authority under section 20, shall, by order,

designate any Regulatory Authority or any officer

preferably the Secretary of the department dealing

with Housing, as the Regulatory Authority for the

purposes under RERA [Section 20].

ii.The Authority shall consist of a Chairperson and

not less than two whole time Members to be

appointed by the appropriate Government [Section

21].

iii.The Chairperson and other Members of the

Authority shall be appointed by the appropriate

Government on the recommendations of a Selection

Committee consisting of the Chief Justice of the High

Court or his nominee, the Secretary of the Department

dealing with Housing and the Law Secretary [Section

22].

iv.The Chairperson and other Members of the

Authority shall be appointed from amongst persons

SA 251.2022.doc 29.12

having adequate knowledge of and professional

experience of at-least twenty years in case of the

Chairperson and fifteen years in the case of the

Members in urban development, housing, real estate

development, infrastructure, economics, technical

experts from relevant fields, planning, law, commerce,

accountancy, industry, management, social service,

public affairs or administration [Section 22].

v.Every person appointed as the Chairperson of the

Authority and Member of the Authority shall, before

entering their offices, make and subscribe an Oath of

Office and Secrecy in prescribed format [Rule 9 of the

Real Estate Authority Rules, 2017].

vi.The appropriate Government shall within a

period of one year from the date of coming into force

of RERA, by Notification establish an Appellate

Tribunal for the concerned State/Union Territory. The

appropriate Government may if necessary, shall

establish one or more Benches of the Appellate

Tribunal for various jurisdictions in the State or Union

Territory as the case may be [Section 43(1) and (2)].

SA 251.2022.doc 29.12

vii.The Appellate Tribunal shall consist of a

chairperson and not less than two whole time

members of which one shall be a judicial member and

other shall be a Technical or Administrative Member.

[Section 45].

viii.A person shall not be qualified for appointment

as the Chairperson unless he is or has been a Judge of

a High Court. The Chairperson of the Appellate

Tribunal shall be appointed by the appropriate

Government in consultation with the Chief Justice of

High Court or his nominee. [Section 46(1) (a) and

(2)].

ix.A person shall not be qualified for appointment

as a Judicial Member unless he has held a judicial

office in the territory of India for at least fifteen years

or has been a member of the Indian Legal Service and

has held the post of Additional Secretary of that

service or any equivalent post, or has been an

advocate for at least twenty years with experience in

dealing with real estate matters [Section 46].

SA 251.2022.doc 29.12

x.A person shall not be qualified for appointment

as a Technical or Administrative Member unless he is a

person who is well-versed in the field of urban

development, housing, real estate development,

infrastructure, economics, planning, law, commerce,

accountancy, industry, management, public affairs or

administration and possesses experience of at least

twenty years in the field or who has held the post in

the Central Government or a State Government

equivalent to the post of Additional Secretary to the

Government of India or an equivalent post in the

Central Government or an equivalent post in the State

Government [Section 46].

xi.The Judicial Members and Technical or

Administrative Members of the Appellate Tribunal

shall be appointed by the appropriate Government on

the recommendations of a Selection Committee

consisting of the Chief Justice of the High Court or his

nominee, the Secretary of the Department handling

Housing and the Law Secretary and in such manner as

may be prescribed. [Section 46].

SA 251.2022.doc 29.12

xii.The Chairperson and the members of the

Appellate Tribunal shall before entering upon the

office, make and subscribe an oath of office and

secrecy. [Rule 8 of the Real Estate Appellate Tribunal

Rules 2017].

xiii.Until the establishment of an Appellate Tribunal

under Section 43(1), 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

RERA. [First proviso to sub-Section (4) of Section 43].

xiv.After the Appellate Tribunal under Section 43 is

established, all matters pending before the Appellate

Tribunal designated to hear the Appeals shall stand

transferred to the Appellate Tribunal so established

and shall be heard from the Stage such Appeal is

transferred. [Second proviso to sub-Section (4) of

Section 43].

19.Sub-Section 1 of Section 20 0f RERA specifically provides that

within a period of one year from the date of coming into force of RERA,

SA 251.2022.doc 29.12

by Notification, establish an Authority to be known as the Real Estate

Regulatory Authority. Third Proviso to sub-section (1) of Section 20

provides that until the establishment of the Real Estate Regulatory

Authority, the appropriate Government, shall, by order, designate any

Regulatory Authority or any officer preferably the Secretary of the

department dealing with Housing, as the Regulatory Authority for the

purposes under RERA. The fourth proviso to Sub-Section 1 of Section

20 provides that after the establishment of the Regulatory Authority, all

applications, complaints or cases pending with the Regulatory Authority

designated, shall stand transferred to the Regulatory Authority so

established and shall be heard from the stage such applications,

complaints or cases are transferred.

20.Sub-section (1) of Section 43 of RERA specifically provides that

the appropriate Government shall within a period of one year from the

date of coming into force of RERA, by Notification establish an

Appellate Tribunal for the concerned State/Union Territory. Even, until

establishment of the Appellate Tribunal as contemplated under Sub-

Section 1 of Section 43, the appropriate Government has been

empowered by first Proviso to Sub-Section 4 of Section 43 to 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 RERA.

SA 251.2022.doc 29.12

The second proviso to Sub-Section 4 of Section 43 provides that after

the Appellate Tribunal as contemplated under Sub-Section 1 of Section

43 is established, all matters pending with the Appellate Tribunal,

designated to hear Appeals as designated by exercising power under

first proviso to Sub-Section (4) of Section 43 shall stand transferred to

the Appellate Tribunal established as contemplated under Sub-Section 1

of Section 43 and shall be heard from such a stage when the Appeal is

transferred. Thus, the second proviso to Sub-Section 4 of Section 43

makes it very clear that establishment of the Appellate Tribunal by

Notification contemplated by Sub-Section 1 of Section 43 read with

second proviso to Sub-Section 4 of Section 43 is an Appellate Tribunal

established which is ready to hear the Appeals pending before the

Appellate Tribunal designated by the State Government by exercising

power under First Proviso to sub-section (4) of Section 43 of RERA.

21.For appreciating the Scheme of RERA, relevant for the purpose of

deciding the First Substantial Question of Law, it is necessary to

consider the same in the light of objects and reasons for enacting RERA.

The objects and reasons for enacting RERA makes it very clear that the

same was enacted in peculiar circumstances. The real estate and

housing sector was largely unregulated and the consequence was that

consumers were unable to procure complete information for enforced

SA 251.2022.doc 29.12

accountability towards builders and developers in the absence of an

effective mechanism in place. The Consumer Protection Act, 1986 was

available to cater the demand of homebuyers in the real estate sector

but the said mechanism was inadequate to address the needs of the

homebuyers and promoters in the real estate sector. The need for RERA

was badly felt for establishing an oversight mechanism to enforce

accountability in the real estate sector and providing an adjudicating

machinery for speedy dispute redressal mechanism and safeguarding

the investments made by the homebuyers through legislation to the

extent permissible under the law. The Statement of Objects and Reasons

of RERA indicates that the primal position of the Regulatory Authority is

to regulate the real estate sector having jurisdiction to ensure

compliance with the obligation cast upon the promoters, the allottees

and the real estate agents. The RERA provided for the establishment of

the Real Estate Regulatory Authority for regulation and promotion of

real estate sector and to ensure sale of plot, apartment or building, as

the case may be, in an efficient and transparent manner and to protect

the interest of consumers in real estate sector and establish the Real

Estate Appellate Tribunal to hear appeals from the decisions, directions

or orders of the Authority. RERA was enacted with an object to ensure

greater accountability towards consumers, to significantly reduce frauds

and delays and also the high transaction costs, and to balance the

SA 251.2022.doc 29.12

interests of consumers and promoters by imposing certain

responsibilities on both, and to bring transparency of the contractual

conditions, set minimum standards of accountability and a fast-track

dispute resolution mechanism, to impose liability upon the promoter to

pay such compensation to the allottees, in the manner as provided, in

case if the promoter fails to discharge any obligations imposed on him.

22.As noted herein above, Section 20 of RERA provides for

establishment and incorporation of Real Estate Regulatory Authority

and Section 43 provides for establishment of Real Estate Appellate

Tribunal. Section 20 and Section 43 of RERA by which

inter alia

respectively it is provided that until the establishment of Real Estate

Regulatory Authority and Real Estate Appellate Tribunal interim

arrangement is made for immediately establishing alternate Regulatory

Authority and alternate Appellate Tribunal to perform functions of Real

Estate Regulatory Authority and Real Estate Appellate Tribunal

respectively till the formation of Real Estate Regulatory Authority and

Real Estate Appellate Tribunal, is required to be appreciated in the

context of object and reasons of RERA more particularly that the need

for RERA was necessitated for establishing an oversight mechanism to

enforce accountability to the real estate sector and providing an

adjudicating machinery for speedy dispute redressal mechanism and

SA 251.2022.doc 29.12

safeguarding the investments made by the homebuyers through

legislation to the extent permissible under the law. Thus, inter alia it is

the purpose of RERA to immediately provide Regulatory Authority to

regulate Real Estate Sector and establish Appellate Tribunal to hear

Appeals from the decisions, directions or orders of the Regulatory

Authority.

23.The importance of the Regulatory Authority can be seen from

Section 34 of RERA which is concerning functions of the Regulatory

Authority. Said Section 34 reads as under:

“34. Functions of Authority.—The functions of the Authority

shall include—

(a) to register and regulate real estate projects and real estate

agents registered under this Act;

(b) to publish and maintain a website of records, for public

viewing, of all real estate projects for which registration has

been given, with such details as may be prescribed, including

information provided in the application for which registration

has been granted;

and enter the names and photographs of promoters as

defaulters including the project details, registration for which

has been revoked or have been penalised under this Act, with

reasons therefor, for access to the general public;

(d) to maintain a database, on its website, for public viewing,

and enter the names and photographs of real estate agents

who have applied and registered under this Act, with such

details as may be prescribed, including those whose

registration has been rejected or revoked;

SA 251.2022.doc 29.12

(e) to fix through regulations for each areas under its

jurisdiction the standard fees to be levied on the allottees or

the promoter or the real estate agent, as the case may be;

(f) to ensure compliance of the obligations cast upon the

promoters, the allottees and the real estate agents under this

Act and the rules and regulations made thereunder;

(g) to ensure compliance of its regulations or orders or

directions made in exercise of its powers under this Act;

(h) to perform such other functions as may be entrusted to

the Authority by the appropriate Government as may be

necessary to carry out the provisions of this Act.

”

(Emphasis added)

24.Section 34 clearly shows that very important functions have been

assigned to the Regulatory Authority. The main function of the

Regulatory Authority, in the context of the First Substantial Question of

Law, is to ensure compliance of the obligations cast upon the promoters,

the allottees and the real estate agents.

25.The functions and duties of promoter are set out in Section 11 of

the RERA which reads as under:

“11. Functions and duties of promoter.—(1) The promoter

shall, upon receiving his Login Id and password under clause

(a) of sub-section (1) or under sub-section (2) of section 5, as

the case may be, create his web page on the website of the

Authority and enter all details of the proposed project as

provided under sub-section (2) of section 4, in all the fields as

provided, for public viewing, including—

(a) details of the registration granted by the Authority;

(b) quarterly up-to-date the list of number and types of

apartments or plots, as the case may be, booked;

SA 251.2022.doc 29.12

booked;

(d) quarterly up-to-date the list of approvals taken and the

approvals which are pending subsequent to commencement

certificate;

(e) quarterly up-to-date status of the project; and

(f) such other information and documents as may be

specified by the regulations made by the Authority.

(2) The advertisement or prospectus issued or published by

the promoter shall mention prominently the website address

of the Authority, wherein all details of the registered project

have been entered and include the registration number

obtained from the Authority and such other matters incidental

thereto.

(3) The promoter, at the time of the booking and issue of

allotment letter shall be responsible to make available to the

allottee, the following information, namely:—

(a) sanctioned plans, layout plans, along with

specifications, approved by the competent authority, by

display at the site or such other place as may be specified

by the regulations made by the Authority;

(b) the stage wise time schedule of completion of the

project, including the provisions for civic infrastructure like

water, sanitation and electricity.

(4) The promoter shall—

(a) be responsible for all obligations, responsibilities and

functions under the provisions of this Act or the rules and

regulations made thereunder or to the allottees as per the

agreement for sale, or to the association of allottees, as the

case may be, till the conveyance of all the apartments, plots

or buildings, as the case may be, to the allottees, or the

common areas to the association of allottees or the

competent authority, as the case may be:

Provided that the responsibility of the promoter, with

SA 251.2022.doc 29.12

respect to the structural defect or any other defect for such

period as is referred to in sub-section (3) of section 14,

shall continue even after the conveyance deed of all the

apartments, plots or buildings, as the case may be, to the

allottees are executed.

(b) be responsible to obtain the completion certificate or

the occupancy certificate, or both, as applicable, from the

relevant competent authority as per local laws or other

laws for the time being in force and to make it available to

the allottees individually or to the association of allottees,

as the case may be;

real estate project is developed on a leasehold land,

specifying the period of lease, and certifying that all dues

and charges in regard to the leasehold land has been paid,

and to make the lease certificate available to the

association of allottees;

(d) be responsible for providing and maintaining the

essential services, on reasonable charges, till the taking

over of the maintenance of the project by the association of

the allottees;

(e) enable the formation of an association or society or co-

operative society, as the case may be, of the allottees, or a

federation of the same, under the laws applicable:

Provided that in the absence of local laws, the

association of allottees, by whatever name called, shall be

formed within a period of three months of the majority of

allottees having booked their plot or apartment or building,

as the case may be, in the project;

(f) execute a registered conveyance deed of the apartment,

plot or building, as the case may be, in favour of the

allottee along with the undivided proportionate title in the

common areas to the association of allottees or competent

authority, as the case may be, as provided under section 17

of this Act;

(g) pay all outgoings until he transfers the physical

SA 251.2022.doc 29.12

possession of the real estate project to the allottee or the

associations of allottees, as the case may be, which he has

collected from the allottees, for the payment of outgoings

(including land cost, ground rent, municipal or other local

taxes, charges for water or electricity, maintenance charges,

including mortgage loan and interest on mortgages or other

encumbrances and such other liabilities payable to

competent authorities, banks and financial institutions,

which are related to the project):

Provided that where any promoter fails to pay all or

any of the outgoings collected by him from the allottees or

any liability, mortgage loan and interest thereon before

transferring the real estate project to such allottees, or the

association of the allottees, as the case may be, the

promoter shall continue to be liable, even after the transfer

of the property, to pay such outgoings and penal charges, if

any, to the authority or person to whom they are payable

and be liable for the cost of any legal proceedings which

may be taken therefor by such authority or person;

(h) after he executes an agreement for sale for any

apartment, plot or building, as the case may be, not

mortgage or create a charge on such apartment, plot or

building, as the case may be, and if any such mortgage or

charge is made or created then notwithstanding anything

contained in any other law for the time being in force, it

shall not affect the right and interest of the allottee who

has taken or agreed to take such apartment, plot or

building, as the case may be;

(5) The promoter may cancel the allotment only in terms of

the agreement for sale:

Provided that the allottee may approach the Authority

for relief, if he is aggrieved by such cancellation and such

cancellation is not in accordance with the terms of the

agreement for sale, unilateral and without any sufficient

cause.

(6) The promoter shall prepare and maintain all such other

details as may be specified, from time to time, by regulations

made by the Authority.

”

SA 251.2022.doc 29.12

(Emphasis added)

26.A perusal of Section 11 of RERA clearly shows that very

important functions and duties are cast on the promoter. The promoter

is responsible for all obligations, responsibilities and functions under the

provisions of RERA or Rules and Regulations made thereunder or to

allottees as per the agreement for sale or to the association of allottees.

The promoter is responsible for obtaining completion certificate or

occupancy certificate or both from the relevant competent authority as

per law. The promoter is responsible for performing very important

functions and duties for completion of real estate project.

27.Section 12 of RERA is concerning obligations of promoter

regarding veracity of the advertisements or prospectus. Section 13

provides that a promoter shall not accept a sum more than 10% of the

cost of the apartment as an advance payment without first entering into

a written agreement for sale with such person and registered the said

agreement for sale under any law for the time being in force. Section 14

provides that the proposed project shall be developed and completed by

the promoter in accordance with the sanctioned plans, layout plans and

specifications as approved by the competent authorities and no addtions

or alterations be made with the same without the previous consent of

the allottee. As per Section 16, the promoter is under an obligation to

SA 251.2022.doc 29.12

ensure real estate project in respect of title of the land and building as a

part of the real estate project and construction of the real estate project.

As per Section 17, the promoter is under an obligation to transfer the

title in favour of allottee and also to the association of the allottees.

Section 18 provides that if the promoter fails to complete or is unable to

give possession of an apartment, plot or building in accordance with the

terms of the agreement for sale or duly completed by the date specified

therein or due to discontinuance of his business as a developer on

account of suspension or revocation of the registration under RERA or

for any other reason, the promoter shall be liable on demand to the

allottees, in case the allottee wishes to withdraw from the project,

without prejudice to any other remedy available, to return the amount

received by promoter in respect of that apartment, plot, building, as the

case may be, with interest at such rate as may be prescribed in this

behalf including compensation in the manner as provided under RERA.

It is further provided that where an allottee does not intend to

withdraw from the project, the allottee shall be paid, by the promoter,

interest for every month of delay, till the handing over of the possession,

at such rate as may be prescribed.

28.Thus, it is clear that the promoter is under an obligation to

perform very important functions and duties and the same are very

SA 251.2022.doc 29.12

important for protecting the interest of allottees.

29.In view of the above important functions and duties of the

promoter and object and purposes of RERA, it is also relevant to note

Paragraph no.12 of the decision of the Supreme Court in Newtech

(supra) which reads as under:-

“12.

To examine the matter in this perspective,

consider what a

house means in India. The data shows that about more than

77% of total assets of an average Indian household are held in

real estate and it is the single largest investment of an

individual in his lifetime. The real estate in India has a peculiar

feature. The buyer borrows money to pay for a house and

simultaneously plays the role of a financer as building projects

collect money upfront and this puts the buyer in a very

vulnerable position—the weakest stakeholder with a high

financial exposure. The amendment to the Insolvency and

Bankruptcy Code, 2018 recognised the homebuyers as

financial creditors and the present enactment is the most

important regulatory intervention in favour of the homebuyers

and it had an impact and with passage of time, has become a

yardstick of laying down minimum standards in the market.

Earlier, the real estate sector was completely unregulated and

there was no transparency in their business profile and after

the present enactment, it is open for the potential homebuyers

to check if a project is approved under the Act, 2016 that at

least gives a satisfaction to a person who is coming forward in

making a lifetime investment..”

(Emphasis added)

Thus the Supreme Court in Newtech (supra) has highlighted

peculiar feature of real estate sector in India which is that the buyer

borrows money to pay for a house and simultaneously plays the role

SA 251.2022.doc 29.12

of a financer as building projects collect money upfront and this puts

the buyer in a very vulnerable position—the weakest stakeholder

with a high financial exposure. The object and purpose of RERA,

inter

alia

, is to protect the buyer who is in a very vulnerable position as

held by the Supreme Court.

30.Section 19 of RERA is regarding rights and duties of allottees.

The said Section reads as under:

“

19. Rights and duties of allottees.—(1)

The allottee

shall be entitled to obtain the information relating to

sanctioned plans, layout plans along with the

specifications, approved by the competent authority

and such other information as provided in this Act or

the rules and regulations made thereunder or the

agreement for sale signed with the promoter.

(2) The allottee shall be entitled to know stage-wise

time schedule of completion of the project, including

the provisions for water, sanitation, electricity and

other amenities and services as agreed to between the

promoter and the allottee in accordance with the

terms and conditions of the agreement for sale.

(3) The allottee shall be entitled to claim the

possession of apartment, plot or building, as the case

may be, and the association of allottees shall be

entitled to claim the possession of the common areas,

as per the declaration given by the promoter under

sub-clause (C) of clause (l) of sub-section (2) of

section 4.

(4) The allottee shall be entitled to claim the refund of

amount paid along with interest at such rate as may

be prescribed and compensation in the manner as

provided under this Act, from the promoter, if the

promoter fails to comply or is unable to give

SA 251.2022.doc 29.12

possession of the apartment, plot or building, as the

case may be, in accordance with the terms of

agreement for sale or due to discontinuance of his

business as a developer on account of suspension or

revocation of his registration under the provisions of

this Act or the rules or regulations made thereunder.

(5) The allottee shall be entitled to have the necessary

documents and plans, including that of common areas,

after handing over the physical possession of the

apartment or plot or building as the case may be, by

the promoter.

(6) Every allottee, who has entered into an agreement

for sale to take an apartment, plot or building as the

case may be, under section 13, shall be responsible to

make necessary payments in the manner and within

the time as specified in the said agreement for sale

and shall pay at the proper time and place, the share

of the registration charges, municipal taxes, water and

electricity charges, maintenance charges, ground rent,

and other charges, if any.

(7) The allottee shall be liable to pay interest, at such

rate as may be prescribed, for any delay in payment

towards any amount or charges to be paid under sub-

section (6).

(8) The obligations of the allottee under sub-section

(6) and the liability towards interest under sub-section

(7) may be reduced when mutually agreed to between

the promoter and such allottee.

(9) Every allottee of the apartment, plot or building as

the case may be, shall participate towards the

formation of an association or society or cooperative

society of the allottees, or a federation of the same.

(10) Every allottee shall take physical possession of

the apartment, plot or building as the case may be,

within a period of two months of the occupancy

SA 251.2022.doc 29.12

certificate issued for the said apartment, plot or

building, as the case may be.

(11) Every allottee shall participate towards

registration of the conveyance deed of the apartment,

plot or building, as the case may be, as provided under

sub-section (1) of section 17 of this Act.

(Emphasis added)

31.Thus, very important rights of allottees are given statutory

recognition by RERA as also very important duties are also cast on the

allottees. Every allottee who has entered into an agreement for sale to

take an apartment, plot or building as the case may be, under section

13, shall be responsible to make necessary payments in the manner and

within the time as specified in the said agreement for sale and shall pay

at the proper time and place, the share of the registration charges,

municipal taxes, water and electricity charges, maintenance charges,

ground rent, and other charges, if any. The allottee shall be liable to pay

interest, at such rate as may be prescribed, for any delay in payment

towards any amount or charges to be paid under sub-section (6). Every

allottee of the apartment, plot or building as the case may be, shall

participate towards the formation of an association or society or

cooperative society of the allottees, or a federation of the same. Every

allottee shall take physical possession of the apartment, plot or building

as the case may be, within a period of two months of the occupancy

certificate issued for the said apartment, plot or building, as the case

SA 251.2022.doc 29.12

may be. Every allottee shall participate towards registration of the

conveyance deed of the apartment, plot or building, as the case may be,

as provided under sub-section (1) of section 17 of this Act. Thus, the

allottee is also responsible for performing various important duties as

specified in Section 19 of RERA.

32.As noted earlier the Statement of Objects and Reasons of RERA

indicates that the primal position of the Regulatory Authority is to

regulate the real estate sector having jurisdiction to ensure compliance

with the obligation cast upon the promoters, the allottees and the real

estate agents. Thus, Sections 20 and 43 of RERA providing for

formation and establishment of Real Estate Regulatory Authority and

Real Estate Appellate Tribunal and till that time making arrangement

for designated Authority and designated Appellate Tribunal as

pro tem

arrangement are required to be considered and interpreted in the light

of this object and purpose of RERA.

33.As the First Substantial Question of Law is concerning

interpretation of Section 43 of RERA, before further discussion on the

said substantial question of law, it is necessary to set out legal position

concerning interpretation of statutes.

(i) The Supreme Court in the case of R.S. Nayak V. A.R.

Antulay

in paragraph 18 has held that:-

17 (1984) 2 SCC 183

SA 251.2022.doc 29.12

“18.The 1947 Act was enacted, as its long title shows,

to make more effective provision for the prevention of

bribery and corruption. Indisputably, therefore, the

provisions of the Act must receive such construction at

the hands of the court as would advance the object and

purpose underlying the Act and at any rate not defeat

it. If the words of the statute are clear and

unambiguous, it is the plainest duty of the court to

give effect to the natural meaning of the words used in

the provision. The question of construction arises only

in the event of an ambiguity or the plain meaning of

the words used in the statute would be self-defeating.

The court is entitled to ascertain the intention of the

legislature to remove the ambiguity by construing the

provision of the statute as a whole keeping in view

what was the mischief when the statute was enacted

and to remove which the legislature enacted the

statute. This rule of construction is so universally

accepted that it need not be supported by precedents.

Adopting this rule of construction, whenever a

question of construction arises upon ambiguity or

where two views are possible of a provision, it would

be the duty of the court to adopt that construction

which would advance the object underlying the Act

namely, to make effective provision for the prevention

of bribery and corruption and at any rate not defeat it

.”

(Emphasis added)

(ii) The Supreme Court in the case of

Grasim Industries Ltd. V.

Collector of Customs, Bombay

has held in paragraphs 10 and 12

as follows :

“10. No words or expressions used in any statute can be

said to be redundant or superfluous. In matters of

interpretation one should not concentrate too much on

one word and pay too little attention to other words.

18 (2002) 4 SCC 297

SA 251.2022.doc 29.12

No provision in the statute and no word in any section

can be construed in isolation. Every provision and every

word must be looked at generally and in the context in

which it is used. It is said that every statute is an edict

of the legislature. The elementary principle of

interpreting any word while considering a statute is to

gather the mens or sententia legis of the legislature.

Where the words are clear and there is no obscurity,

and there is no ambiguity and the intention of the

legislature is clearly conveyed, there is no scope for the

court to take upon itself the task of amending or

alternating (sic altering) the statutory provisions.

Wherever the language is clear the intention of the

legislature is to be gathered from the language used.

While doing so, what has been said in the statute as

also what has not been said has to be noted. The

construction which requires for its support addition or

substitution of words or which results in rejection of

words has to be avoided.

“12. In the background of what has been urged by the

assessee it has to be further seen whether the principles

of ejusdem generis have application. The rule is

applicable when particular words pertaining to a class,

category or genus are followed by general words. In

such a case the general words are construed as limited

to things of the same kind as those specified. The rule

reflects an attempt to reconcile incompatibility between

the specific and general words in view of the other

rules of interpretation that all words in a statute are

given effect if possible, that a statute is to be construed

as a whole and that no words in a statute are presumed

to be superfluous. The rule applies only when (1) the

statute enumerates the specific words, (2) the subjects

of enumeration constitute a class or category, (3) that

class or category is not exhausted by the enumeration,

(4) the general terms follow the enumeration, and (5)

there is no indication of a different legislative intent. If

the subjects of enumeration belong to a broad-based

SA 251.2022.doc 29.12

genus, as also to a narrower genus there is no principle

that the general words should be confined to the

narrower genus. Where the context and the object and

mischief of the enactment do not require restricted

meaning to be attached to words of general import it

becomes the duty of the courts to give those words

their plain and ordinary meaning.”

(iii) The Supreme Court in the case of J.P. Bansal V. State of

Rajasthan

has held in paragraph Nos. 11, 14 and 16 as under:-

“

11.

It is said that a statute is an edict of the legislature.

The elementary principle of interpreting or construing a

statute is to gather the mens or sententia legis of the

legislature.

12. Interpretation postulates the search for the true

meaning of the words used in the statute as a medium of

expression to communicate a particular thought. The

task is not easy as the “language” is often misunderstood

even in ordinary conversation or correspondence. The

tragedy is that although in the matter of correspondence

or conversation the person who has spoken the words or

used the language can be approached for clarification,

the legislature cannot be approached as the legislature,

after enacting a law or Act, becomes functus officio so

far as that particular Act is concerned and it cannot itself

interpret it. No doubt, the legislature retains the power

to amend or repeal the law so made and can also

declare its meaning, but that can be done only by

making another law or statute after undertaking the

whole process of law-making.

13. Statute being an edict of the legislature, it is

necessary that it is expressed in clear and unambiguous

language.

19 (2003) 5 SCC 134

SA 251.2022.doc 29.12

14. Where, however, the words were clear, there is no

obscurity, there is no ambiguity and the intention of the

legislature is clearly conveyed, there is no scope for the

court to innovate or take upon itself the task of

amending or altering the statutory provisions.

“It endangers continued public confidence in the

political impartiality of the judiciary, which is essential

to the continuance of the rule of law, if Judges, under

the guise of interpretation, provide their own preferred

amendments to statutes which experience of their

operation has shown to have had consequences that

members of the court before whom the matter comes

consider to be injurious to the public interest.”

16. Where, therefore, the “language” is clear, the

intention of the legislature is to be gathered from the

language used. What is to be borne in mind is as to

what has been said in the statute as also what has not

been said. A construction which requires, for its

support, addition or substitution of words or which

results in rejection of words, has to be avoided, unless

it is covered by the rule of exception, including that of

necessity, which is not the case here. …..

(v) The Supreme Court in the case of G. Narayanaswami Vs. G.

Pannerselvam

has held in paragraph 4 as under :-

“

4. Authorities are certainly not wanting which

indicate that Courts should interpret in a broad and

generous spirit the document which contains the

fundamental law of the land or the basic principles of its

Government. Nevertheless, the rule of "plain meaning" or

"literal" interpretation, described in Maxwell’s

Interpretation of Statutes as “the primary rule", could not

be altogether abandoned today in interpreting any

document. Indeed, we find Lord Evershed, M.R., saying:

20 (1972) 3 SCC 717

SA 251.2022.doc 29.12

"The length and detail of modern legislation, has

undoubtedly reinforced the claim of literal construction

as the only safe rule". (See Maxwell on “Interpretation of

Statutes", 12th Edition, p. 28). It may be that the great

mass of modern legislation, a large part of which consists

of statutory rules, makes some departure from the literal

rule of interpretation more easily justifiable today than it

was in the past. But, the object of interpretation and of

“construction” (which may be broader than

“interpretation”) is to discover the intention of the law-

makers in every case (See : Crawford on Statutory

Construction, 1940 Edn., para 157, pp. 240-42). This

object can, obviously, be best achieved by first looking at

the language used in the relevant provisions. Other

methods of extracting the meaning can be resorted to

only if the language used is contradictory, ambiguous, or

leads really to absurd results. This is an elementary and

basic rule of interpretation as well as of construction

processes which, from the point of view of principles

applied, coalesce and converge towards the common

purpose of both which is to get at the real sense and

meaning, so far as it may be reasonably possible to do

this, of what is found laid down. The provisions whose

meaning is under consideration have, therefore to be

examined before applying any method of construction at

all. To these provisions we may now turn.”

(Emphasis added)

(vi) The Supreme Court in Vivek Narayan Sharma vs. Union of India

has held as follows in paragraph Nos.133 to 148:

“133. We find that for deciding the present issue, it

will also be necessary to refer an important principle

of interpretation of statutes i.e. of purposive

interpretation.

134. “Legislation has an aim, it seeks to obviate some

21(2023) 3 SCC 1

SA 251.2022.doc 29.12

mischief, to supply an inadequacy, to effect a change

of policy, to formulate a plan of government. That aim,

that policy is not drawn, like nitrogen, out of the air; it

is evidenced in the language of the statute, as read in

the light of other external manifestations of purpose

[“Some Reflections on the Reading of Statutes”

[(1947) 47 Columbia LR 527] , Columbia LR at p.

538].” This is how Justice Frankfurter succinctly

propounds the principle of purposive interpretation.

135. It is thus necessary to cull out the legislative

policy from various factors like the words in the

statute, the Preamble to the Act, the Statement of

Objects and Reasons, and in a given case, even the

attendant circumstances. After the legislative policy is

found, then the words used in the statute must be so

interpreted such that it advances the purpose of the

statute and does not defeat it.

136. Francis Bennion in his treatise Statutory

Interpretation, at p. 810 described purposive

construction in an equally eloquent manner as under:

“A purposive construction of an enactment is one

which gives effect to the legislative purpose by—

(a) following the literal meaning of the enactment

where that meaning is in accordance with the

legislative purpose (in this Code called a purposive-

and-literal construction), or

(b) applying a strained meaning where the literal

meaning is not in accordance with the legislative

purpose (in the Code called a purposive-and-strained

construction).”

137. A statute must be construed having regard to the

legislative intent. It has to be meaningful. A

construction which leads to manifest absurdity must

not be preferred to a construction which would fulfill

the object and purport of the legislative intent.

138. Aharon Barak, the former President of the

Supreme Court of Israel, whose exposition of “doctrine

SA 251.2022.doc 29.12

of proportionality” has found approval by the

Constitution Bench of this Court in Modern Dental

College & Research Centre [Modern Dental College &

Research Centre v. State of M.P., (2016) 7 SCC 353 : 7

SCEC 1] , to which we will refer to in the forthcoming

paragraphs, in his commentary on “Purposive

Interpretation in Law”, has summarised “the goal of

interpretation in law” as under:

“At some point, we need to find an Archimedean

foothold, external to the text, from which to answer

that question. My answer is this : The goal of

interpretation in law is to achieve the objective—in

other words, the purpose—of law. [ D. Brink, “Legal

Theory, Legal Interpretation, and Judicial Review”, 17

Philosophy & Public Affairs 105, 125 (1988).] The role

of a system of interpretation in law is to choose, from

among the semantic options for a given text, the

meaning that best achieves the purpose of the text.

Each legal text—will, contract, statute, and

constitution—was chosen to achieve a social objective.

Achieving this objective, achieving this purpose, is the

goal of interpretation. The system of interpretation is

the device and the means. It is a tool through which

law achieves self-realisation. In interpreting a given

text, which is, after all, what interpretation in law

does, a system of interpretation must guarantee that

the purpose of the norm trapped in the—in our

terminology, the purpose of the text—will be achieved

in the best way. Hence the requirement that the

system of interpretation be a rational activity. A coin

toss will not do. This is also the rationale—which is at

the core of my own views—for the belief that

purposive interpretation is the most proper system of

interpretation. This system is proper because it

guarantees the achievement of the purpose of law.

There is social, jurisprudential, hermeneutical, and

constitutional support for my claim that the proper

criterion for interpretation is the search for law's

purpose, and that purposive interpretation best fulfills

that criterion. A comparative look at the law supports

it, as well. I will discuss each element of that support

below.”

SA 251.2022.doc 29.12

139. The learned Judge emphasised that purposive

interpretation is the most proper system of

interpretation. He observed that this system is proper

because it guarantees the achievement of the purpose

of law. The proper criterion for interpretation is the

search for law's purpose, and that purposive

interpretation best fulfils that criterion.

140. The principle of purposive interpretation has also

been expounded through a catena of judgments of this

Court. A Constitution Bench of this Court in M.

Pentiah v. Muddala Veeramallappa [M. Pentiah v.

Muddala Veeramallappa, (1961) 2 SCR 295 : AIR

1961 SC 1107] was considering a question, as to

whether the term prescribed in Section 34 would

apply to a member of a “deemed” committee under

the provisions of the Hyderabad District Municipalities

Act, 1956. An argument was put forth that, upon a

correct interpretation of the provisions of Section 16,

the same would be permissible. Rejecting the said

argument, K. Subba Rao, J., observed thus : (AIR pp.

1110-11, para 6)

“6. Before we consider this argument in some detail, it

will be convenient at this stage to notice some of the

well-established rules of construction which would

help us to steer clear of the complications created by

the Act. Maxwell on the Interpretation of Statutes,

10th Edn., says at p. 7 thus:

‘… if the choice is between two interpretations, the

narrower of which would fail to achieve the manifest

purpose of the legislation, we should avoid a

construction which would reduce the legislation to

futility and should rather accept the bolder

construction based on the view that Parliament would

legislate only for the purpose of bringing about an

effective result.’

It is said in Craies on Statute Law, 5th Edn., at p. 82—

‘Manifest absurdity or futility, palpable injustice, or

absurd inconvenience or anomaly to be avoided.’

SA 251.2022.doc 29.12

Lord Davey in Canada Sugar Refining Co. Ltd. v. R.

[Canada Sugar Refining Co. Ltd. v. R., 1898 AC 735

(PC)] provides another useful guide of correct

perspective to such a problem in the following words :

(AC p. 741)

‘… Every clause of a statute should be construed with

reference to the context and the other clauses of the

Act, so as, so far as possible, to make a consistent

enactment of the whole statute or series of statutes

relating to the subject-matter.’ ”

141. A.K. Sarkar, J. in his concurring opinion observed

thus : (M. Pentiah case [M. Pentiah v. Muddala

Veeramallappa, (1961) 2 SCR 295 : AIR 1961 SC

1107] , AIR p. 1115, para 27)

“27. There is no doubt that the Act raises some

difficulty. It was certainly not intended that the

members elected to the Committee under the repealed

Act should be given a permanent tenure of office nor

that there would be no elections under the new Act.

Yet such a result would appear to follow if the

language used in the new Act is strictly and literally

interpreted. It is however well established that

‘Where the language of a statute, in its ordinary

meaning and grammatical construction, leads to a

manifest contradiction of the apparent purpose of the

enactment, or to some inconvenience or absurdity,

hardship or injustice, presumably not intended, a

construction may be put upon it which modifies the

meaning of the words, and even the structure of the

sentence.… Where the main object and intention of a

statute are clear, it must not be reduced to a nullity by

the draftsman's unskilfulness or ignorance of the law,

except in a case of necessity, or the absolute

intractability of the language used. Nevertheless, the

courts are very reluctant to substitute words in a

statute, or to add words to it, and it has been said that

they will only do so where there is a repugnancy to

good sense.’ : see Maxwell on Statutes (10th Edn.) p.

229.

SA 251.2022.doc 29.12

In Seaford Court Estates Ltd. v. Asher [Seaford Court

Estates Ltd. v. Asher, (1949) 2 KB 481] , KB at p. 499,

Denning, L.J. said:

‘… when a defect appears a Judge cannot simply fold

his hands and blame the draftsman. He must set to

work on the constructive task of finding the intention

of Parliament … and then he must supplement the

written word so as to give “force and life” to the

intention of the legislature. … A Judge should ask

himself the question how, if the makers of the Act had

themselves come across this ruck in the texture of it,

how would they have straightened it out? He must

then do as they would have done. A Judge must not

alter the material of which [the Act] is woven, but he

can and should iron out the creases.’ ”

(emphasis supplied)

142. Another Constitution Bench judgment of this

Court in High Court of A.P. v. L.V.A. Dixitulu [High

Court of A.P. v. L.V.A. Dixitulu, (1979) 2 SCC 34 : 1979

SCC (L&S) 99] reiterated the position in the following

words : (SCC p. 53, para 67)

“67. Where two alternative constructions are possible,

the court must choose the one which will be in accord

with the other parts of the statute and ensure its

smooth, harmonious working, and eschew the other

which leads to absurdity, confusion, or friction,

contradiction and conflict between its various

provisions, or undermines, or tends to defeat or

destroy the basic scheme and purpose of the

enactment.”

143. In Girdhari Lal & Sons v. Balbir Nath Mathur

[Girdhari Lal & Sons v. Balbir Nath Mathur, (1986) 2

SCC 237] , O. Chinnappa Reddy, J. explained the

position as under : (SCC p. 243, para 9)

“9. So we see that the primary and foremost task of a

court in interpreting a statute is to ascertain the

intention of the legislature, actual or imputed. Having

ascertained the intention, the court must then strive to

SA 251.2022.doc 29.12

so interpret the statute as to promote or advance the

object and purpose of the enactment. For this purpose,

where necessary the court may even depart from the

rule that plain words should be interpreted according

to their plain meaning. There need be no meek and

mute submission to the plainness of the language. To

avoid patent injustice, anomaly or absurdity or to

avoid invalidation of a law, the court would be well

justified in departing from the so-called golden rule of

construction so as to give effect to the object and

purpose of the enactment by supplementing the

written word if necessary.”

144. After referring to various earlier judgments of

other jurisdictions, his Lordship observed thus :

(Balbir Nath Mathur case [Girdhari Lal & Sons v.

Balbir Nath Mathur, (1986) 2 SCC 237] , SCC p. 246,

para 16)

“16. Our own court has generally taken the view that

ascertainment of legislative intent is a basic rule of

statutory construction and that a rule of construction

should be preferred which advances the purpose and

object of a legislation and that though a construction,

according to plain language, should ordinarily be

adopted, such a construction should not be adopted

where it leads to anomalies, injustices or absurdities,

vide K.P. Varghese v. ITO [K.P. Varghese v. ITO, (1981)

4 SCC 173 : 1981 SCC (Tax) 293] , State Bank of

Travancore v. Mohd. M. Khan [State Bank of

Travancore v. Mohd. M. Khan, (1981) 4 SCC 82] , Som

Prakash Rekhi v. Union of India [Som Prakash Rekhi v.

Union of India, (1981) 1 SCC 449 : 1981 SCC (L&S)

200] , Ravula Subba Rao v. CIT [Ravula Subba Rao v.

CIT, AIR 1956 SC 604 : 1956 SCR 577] , Govindlal

Chhaganlal Patel v. Agricultural Produce Market

Committee [Govindlal Chhaganlal Patel v. Agricultural

Produce Market Committee, (1975) 2 SCC 482] and

Babaji Kondaji Garad v. Nasik Merchants Coop. Bank

Ltd. [Babaji Kondaji Garad v. Nasik Merchants Coop.

Bank Ltd., (1984) 2 SCC 50] ”

(emphasis supplied)

SA 251.2022.doc 29.12

145. M.N. Venkatachaliah, J. speaking for the

Constitution Bench of this Court in Tinsukhia Electric

Supply Co. Ltd. v. State of Assam [Tinsukhia Electric

Supply Co. Ltd. v. State of Assam, (1989) 3 SCC 709]

observed thus : (SCC p. 754, paras 118-20)

“118. The courts strongly lean against any

construction which tends to reduce a statute to futility.

The provision of a statute must be so construed as to

make it effective and operative, on the principle ut res

magis valeat quam pereat. It is, no doubt, true that if a

statute is absolutely vague and its language wholly

intractable and absolutely meaningless, the statute

could be declared void for vagueness. This is not in

judicial review by testing the law for arbitrariness or

unreasonableness under Article 14; but what a court

of construction, dealing with the language of a statute,

does in order to ascertain from, and accord to, the

statute the meaning and purpose which the legislature

intended for it. In Manchester Ship Canal Co. v.

Manchester Racecourse Co. [Manchester Ship Canal

Co. v. Manchester Racecourse Co., (1900) 2 Ch 352 :

16 TLR 429 : 83 LT 274] Farwell, J. said : (pp. 360-

61)

‘… Unless the words were so absolutely senseless that

I could do nothing at all with them, I should be bound

to find some meaning, and not to declare them void

for uncertainty.’

119. In Fawcett Properties Ltd. v. Buckingham County

Council [Fawcett Properties Ltd. v. Buckingham

County Council, (1960) 3 WLR 831 : (1960) 3 All ER

503 (HL)] Lord Denning approving the dictum of

Farwell, J., said : (Ch p. 849)

‘… But when a statute has some meaning, even

though it is obscure, or several meanings, even though

there is little to choose between them, the courts have

to say what meaning the statute to bear rather than

reject it as a nullity.’

120. It is, therefore, the court's duty to make what it

can of the statute, knowing that the statutes are meant

SA 251.2022.doc 29.12

to be operative and not inept and the nothing short of

impossibility should allow a court to declare a statute

unworkable. In Whitney v. IRC [Whitney v. IRC, 1926

AC 37 (HL)] Lord Dunedin said : (AC p. 52)

‘… A statute is designed to be workable, and the

interpretation thereof by a court should be to secure

that object, unless crucial omission or clear direction

makes that end unattainable.’ ”

146. In State of Gujarat v. R.A. Mehta [State of Gujarat

v. R.A. Mehta, (2013) 3 SCC 1 : (2013) 2 SCC (Cri) 46

: (2013) 1 SCC (L&S) 490] , this Court held as under :

(SCC pp. 47-48, para 98)

“98. The doctrine of purposive construction may be

taken recourse to for the purpose of giving full effect

to statutory provisions, and the courts must state what

meaning the statute should bear, rather than rendering

the statute a nullity, as statutes are meant to be

operative and not inept. The courts must refrain from

declaring a statute to be unworkable. The rules of

interpretation require that construction which carries

forward the objectives of the statute, protects interest

of the parties and keeps the remedy alive, should be

preferred looking into the text and context of the

statute. Construction given by the court must promote

the object of the statute and serve the purpose for

which it has been enacted and not efface its very

purpose. ‘The courts strongly lean against any

construction which tends to reduce a statute to futility.

The provision of the statute must be so construed as to

make it effective and operative.’ The court must take a

pragmatic view and must keep in mind the purpose for

which the statute was enacted as the purpose of law

itself provides good guidance to courts as they

interpret the true meaning of the Act and thus

legislative futility must be ruled out. A statute must be

construed in such a manner so as to ensure that the

Act itself does not become a dead letter and the

obvious intention of the legislature does not stand

defeated unless it leads to a case of absolute

intractability in use. The court must adopt a

construction which suppresses the mischief and

SA 251.2022.doc 29.12

advances the remedy and ‘to suppress subtle

inventions and evasions for continuance of the

mischief, and pro privato commodo, and to add force

and life to the cure and remedy, according to the true

intent of the makers of the Act, pro bono publico’. The

court must give effect to the purpose and object of the

Act for the reason that legislature is presumed to have

enacted a reasonable statute. (Vide M. Pentiah v.

Muddala Veeramallappa [M. Pentiah v. Muddala

Veeramallappa, (1961) 2 SCR 295 : AIR 1961 SC

1107] , S.P. Jain v. Krishna Mohan Gupta [S.P. Jain v.

Krishna Mohan Gupta, (1987) 1 SCC 191] , RBI v.

Peerless General Finance & Investment Co. Ltd. [RBI v.

Peerless General Finance & Investment Co. Ltd.,

(1987) 1 SCC 424] , Tinsukhia Electric Supply Co. Ltd.

v. State of Assam [Tinsukhia Electric Supply Co. Ltd. v.

State of Assam, (1989) 3 SCC 709] , SCC at p. 754,

para 118; UCO Bank v. Rajinder Lal Capoor [UCO

Bank v. Rajinder Lal Capoor, (2008) 5 SCC 257 :

(2008) 2 SCC (L&S) 263] and Grid Corpn. of Orissa

Ltd. v. Eastern Metals & Ferro Alloys [Grid Corpn. of

Orissa Ltd. v. Eastern Metals & Ferro Alloys, (2011) 11

SCC 334] .)”

(emphasis supplied)

147. The principle of purposive construction has been

enunciated in various subsequent judgments of this

Court. However, we would not like to burden this

judgment with a plethora of citations. Suffice it to say,

the law on the issue is very well crystallised.

148. It is thus clear that it is a settled principle that

the modern approach of interpretation is a pragmatic

one, and not pedantic. An interpretation which

advances the purpose of the Act and which ensures its

smooth and harmonious working must be chosen and

the other which leads to absurdity, or confusion, or

friction, or contradiction and conflict between its

various provisions, or undermines, or tends to defeat

or destroy the basic scheme and purpose of the

enactment must be eschewed. The primary and

foremost task of the Court in interpreting a statute is

to gather the intention of the legislature, actual or

SA 251.2022.doc 29.12

imputed. Having ascertained the intention, it is the

duty of the Court to strive to so interpret the statute as

to promote or advance the object and purpose of the

enactment. For this purpose, where necessary, the

Court may even depart from the rule that plain words

should be interpreted according to their plain

meaning. There need be no meek and mute

submission to the plainness of the language. To avoid

patent injustice, anomaly or absurdity or to avoid

invalidation of a law, the court would be justified in

departing from the so-called golden rule of

construction so as to give effect to the object and

purpose of the enactment. Ascertainment of legislative

intent is the basic rule of statutory construction.”

(Emphasis added)

34.From the analysis of the above decisions of the Supreme Court

concerning interpretation of statutes, the following principles can be

culled out:-

i.The provisions of the Act must receive such construction at the

hands of the court as would advance the object and purpose

underlying the Act and at any rate not to defeat it.

ii.If the words of the statute are clear and unambiguous, it is the

plainest duty of the court to give effect to the natural meaning of

the words used in the provision. The question of construction

arises only in the event of an ambiguity or the plain meaning of

the words used in the statute would be self-defeating.

iii.The court is entitled to ascertain the intention of the legislature to

remove the ambiguity by construing the provision of the statute

as a whole keeping in view what was the mischief when the

statute was enacted and to remove which the legislature enacted

SA 251.2022.doc 29.12

the statute.

iv.In matters of interpretation one should not concentrate too much

on one word and pay too little attention to other words. No

provision in the statute and no word in any section can be

construed in isolation. Every provision and every word must be

looked at generally and in the context in which it is used.

v.The elementary principle of interpreting any word while

considering a statute is to gather the

sententia legis or mens of

the legislature. The maxim

sententia legis or mens contemplates

that the essence of the law lies in the spirit, and not in its letter,

the letters are just a way to express the intentions of the law

makers. Where the words are clear and there is no obscurity, and

there is no ambiguity and the intention of the legislature is clearly

conveyed, there is no scope for the court to take upon itself the

task of amending or altering the statutory provisions.vi.It is necessary to cull out the legislative policy from various

factors like the words in the statute, the Preamble to the Act, the

Statement of Objects and Reasons, and in a given case, even the

attendant circumstances. After the legislative policy is found, then

the words used in the statute must be so interpreted such that it

advances the purpose of the statute and does not defeat it.

vii. A statute must be construed having regard to the legislative

intent. It has to be meaningful. A construction which leads to

manifest absurdity must not be preferred to a construction which

would fulfill the object and purport of the legislative intent.

viii. Where the language of a statute, in its ordinary meaning

SA 251.2022.doc 29.12

and grammatical construction, leads to a manifest contradiction

of the apparent purpose of the enactment, or to some

inconvenience or absurdity, hardship or injustice, presumably not

intended, a construction may be put upon it which modifies the

meaning of the words, and even the structure of the sentence.

Where the main object and intention of a statute are clear, it must

not be reduced to a nullity by the draftsman's unskilfulness or

ignorance of the law, except in a case of necessity, or the absolute

intractability of the language used.

ix.The doctrine of purposive construction may be taken recourse to

for the purpose of giving full effect to statutory provisions, and

the courts must state what meaning the statute should bear,

rather than rendering the statute a nullity, as statutes are meant

to be operative and not inept. The courts must refrain from

declaring a statute to be unworkable. The rules of interpretation

require that construction which carries forward the objectives of

the statute, protects interest of the parties and keeps the remedy

alive, should be preferred looking into the text and context of the

statute. Construction given by the court must promote the object

of the statute and serve the purpose for which it has been enacted

and not efface its very purpose.

x.The courts strongly lean against any construction which tends to

reduce a statute to futility. The provision of the statute must be so

construed as to make it effective and operative.’ The court must

take a pragmatic view and must keep in mind the purpose for

which the statute was enacted as the purpose of law itself

provides good guidance to courts as they interpret the true

meaning of the Act and thus legislative futility must be ruled out.

SA 251.2022.doc 29.12

The court must give effect to the purpose and object of the Act for

the reason that legislature is presumed to have enacted a

reasonable statute.

35.Thus, it is clear that the provisions of RERA are required to be

interpreted in the manner the same would advance the object and

purpose of RERA. As per the settled legal position, the provisions of the

Act must receive such construction at the hands of the court as would

advance the object and purpose underlying the Act and at any rate not

defeat it. If the words of the statute are clear and unambiguous, it is the

plainest duty of the court to give effect to the natural meaning of the

words used in the provision. The question of construction arises only in

the event of an ambiguity or the plain meaning of the words used in the

statute would be self-defeating. The court is entitled to ascertain the

intention of the legislature to remove the ambiguity by construing the

provision of the statute as a whole keeping in view what was the

mischief when the statute was enacted and to remove which the

legislature enacted the statute. Adopting this rule of construction,

whenever a question of construction arises upon ambiguity or where

two views are possible of a provision, it would be the duty of the court

to adopt that construction which would advance the object underlying

the Act.

36.Thus, what is contemplated under the scheme of RERA is that the

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Real Estate Regulatory Authority (under section 20) and the Real Estate

Appellate Tribunal (under section 43) shall be appointed by the

Appropriate Government within a period of 1 year of coming into the

operation of RERA and till that time interim arrangement is to be made

by the Appropriate Governement of designated Authority and

designated Appellate Tribunal. Thus, what is contemplated is that as

soon as the RERA is enacted until the establishment of an Appellate

Tribunal as contemplated under sub-section (1) of section 43 i.e.

regular Appellate Tribunal, any Appellate Tribunal functioning under

any of the law for the time being in force be designated to be the

Appellate Tribunal designated to hear the appeals under RERA. The

scheme of RERA further contemplates that by following the mandatory

provision the Chairperson, Judicial Member and

Technical/Administrative Member are required to be appointed. As

noted herein above, Rule 8 of Real Estate Appellate Tribunal Rules

clearly provides that the Chairperson and members of the Appellate

Tribunal shall before entering upon the office, make and subscribe oath

of office and secrecy. The second proviso to sub-section (4) of section 43

clearly provides that after establishment of the Appellate Tribunal under

sub section (1) of section 43 all matters pending with the designated

Appellate Tribunal shall stand transferred to the Real Estate Appellate

Tribunal. Thus, it is clear that establishment of an Appellate Tribunal

SA 251.2022.doc 29.12

contemplated under Section 43 (1) of RERA read with Rule 8 of the

Real Estate Appellate Tribunal Rules is an Appellate Tribunal ready to

hear appeals. This scheme of Section 43 in the context of first

substantial question of law is very clear from the language of Sub-

Section 1 of Section 43 read with first and second proviso to Sub-

Section 4 of Section 43 of the RERA read with Rule 8 of Real Estate

Appellate Tribunal Rules.

37.Thus, the establishment of the Appellate Tribunal takes effect

after the appointment of the Chairperson and members and they before

entering upon the office, make and subscribe an oath of office and

secrecy. As submitted by the learned Counsel appearing for the

Appellants, it is correct that the establishment of the Appellate Tribunal

will take place only once and the appointment of the Chairperson and

members and taking oath by them before entering their respective

offices will take place when exigency arises. However, the scheme of the

RERA clearly shows that unless the Chairperson and Judicial and

Technical or Administrative Members are appointed and they enter their

office after taking oath, it is the designated Appellate Tribunal which

has jurisdiction to hear the appeal under RERA.

38.The clear and unambiguous provisions as made in Section 43 of

RERA read with Rule 8 of the Real Estate Appellate Tribunal Rules,

inter

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alia, provides as follows :

(i) The appropriate Government by notification,

establish Real Estate Appellate Tribunal.

(ii) Until the establishment of Real Estate Appellate

Tribunal, 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 RERA.

(iii) After the Real Estate Appellate Tribunal 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.

(iv) The Chairperson and members of the Real Estate

Appellate Tribunal shall before entering upon the office, make

and subscribe an oath of office and secrecy.

39.Thus, what is contemplated by Section 43 is until the

establishment of Appellate Tribunal under RERA any other Appellate

Tribunal functioning under any other law for the time being in force can

SA 251.2022.doc 29.12

be designated by the Appropriate Government to be the Appellate

Tribunal under RERA to hear Appeal under RERA. It is further provided

that once the Appellate Tribunal is established under Section 43 of

RERA, all matters pending with the Appellate Tribunal functioning

under any other law for the time being in force and designated by the

Appropriate Government to hear Appeals under RERA, shall stand

transferred to the Appellate Tribunal so established and shall be heard

from the stage such appeal is transferred. Rule 8 of Real Estate

Appellate Tribunal Rules provides that the Chairperson and member of

the Appellate Tribunal shall before entering upon the office, make and

subscribe an oath of office and secrecy. Thus, the Appellate Tribunal

established under Section 43 contemplated is the functioning Appellate

Tribunal under RERA as it has to start hearing the pending Appeals

from the stage of the hearing completed before the designated

Appellate Tribunal. As the Chairperson and member, of the Appellate

Tribunal shall before entering upon the office, make and subscribe an

oath of office and secrecy, it is very clear that what is contemplated

under Section 43 read with Rule 8 of Real Estate Appellate Tribunal

Rules is functioning Appellate Tribunal and not merely Appellate

Tribunal existing only on paper.

40.In the light of above scheme of RERA, it is necessary to set out

relevant aspects:

SA 251.2022.doc 29.12

i.Section 43(1) of RERA provides that the appropriate Government

shall, within a period of one year from the date of coming into force of

RERA, by notification, establish an Appellate Tribunal. First proviso to

sub-section (4) of Section 43 of RERA provides that until the

establishment of an Appellate Tribunal under said 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 RERA i.e. Designated

Appellate Tribunal.

ii.The Government of Maharashtra issued following notification on

December 2017.

“

No. Rera.2017/C.R.116/DVP-2.—

In exercise of the

powers conferred by the first proviso to sub-section

(4) of section 43 of Real Estate (Regulation and

Development) Act, 2016 (16 of 2016) (hereinafter

referred to as “the said Act”) the Government of

Maharashtra, being the appropriate Government in

respect of matters relating to the State, hereby

designates the Maharashtra Revenue Tribunal at

Brihan Mumbai constituted and functioning under the

Maharashtra Land Revenue Code, 1966 (Mah. XLI of

1966) to be the Appellate Tribunal to hear the appeals

under the said Act, until the establishment of the

Maharashtra Real Estate Appellate Tribunal under

section 43 of the said Act.”

(Emphasis added)

Thus, the Government of Maharashtra by Notification dated 28

December 2017 designated the Maharashtra Revenue Tribunal at

Brihanmumbai constituted and functioning under the Maharashtra

SA 251.2022.doc 29.12

Revenue Code to be the Appellate Tribunal to hear Appeals under RERA

until the establishment of Real Estate Appellate Tribunal under Section

43 of the Real Estate Appellate Tribunal.

iii.The Government of Maharashtra by Government Resolution

dated 8

May 2018 issued by exercising power under Section 46(2) and

(3) appointed a Chairperson, one Judicial Member and another

technical or administrative member as provided under Section 45 of

RERA. The relevant portion (English Translation) of said Government

Resolution dated 8

May 2018 is as under :

“The Government, in exercise of the powers conferred

upon it under the provisions of Section 46(2) and also

(3) of the Real Estate (Regulation and Development)

Act, 2016 and as prescribed under Section 45 of the

aforesaid Act, hereby appoint the Chairperson and

two whole time Members i.e. a Judicial member and a

Technical/Administrative Member of the Maharashtra

Real Estate Appellate Tribunal as mentioned herein

below.

1) Smt. Indira Jain (Retired Judge), Chairperson,

Maharashtra Real Estate Appellate Tribunal.

2) Shri Sumant Kolhe, Judicial Member,

Maharashtra Real Estate Appellate Tribunal.

3) Shri S. S. Sandhu, Technical/Administrative

Member, Maharashtra Real Estate Appellate

Tribunal.

The provisions of the Maharashtra Real Estate

Appellate Tribunal (Officers and Other Employees)

(Appointment and Service Conditions) Rules, 2017

dated 20th April, 2017, shall be applicable to the

appointments to the aforesaid posts.”

(Emphasis added)

SA 251.2022.doc 29.12

iv.Although appointment of Chairperson and members of

Maharashtra Real Estate Appellate Tribunal was made by Government

Resolution dated 8

May 2018, the said chairperson and members took

oath after a period of about 6 months and 16 days i.e. on 24

December

2018 and the functioning of the Maharashtra Real Estate Appellate

Tribunal started on 24

December 2018.

v.The Government of Maharashtra issued notification dated 24

October 2019 by exercising powers conferred by sub-section 1 of

Section 43 of the RERA establishing Maharashtra Real Estate Appellate

Tribunal for the State of Maharashtra. The said notification dated 24

October 2019 reads as under :

“HOUSING DEPARTMENT

Madam Cama Marg, Hutatma Rajguru Chowk,

Mantralaya,

Mumbai 400 032, dated the 24th October 2019

NOTIFICATION

REAL ESTATE (REGULATION AND DEVELOPMENT)

ACT, 2016.

No. Misc. 2019/C.R.129/(Part-1)/RR-2.— In exercise

of the powers conferred by sub-section (1) of section

43 of the Real Estate (Regulation and Development)

Act, 2016 (Act No.16 of 2016), and in supersession of

the Government Notification, Housing Department,

No.Rera. 2017/C.R. 116/DVP-2, dated the 28th

December 2017, the Government of Maharashtra

establishes the Maharashtra Real Estate Appellate

Tribunal for the State of Maharashtra consisting of the

following, as may be appointed, from time to time.:—

(i) A Retired High Court Judge,

(ii) A Judicial Member; and

(iii) An Administrative/Technical Member.

SA 251.2022.doc 29.12

The said Tribunal has been functional with effect from

the 24th December 2018.

By order and in the name of the Governor of

Maharashtra,

R.K. Dhanawade

Deputy Secretary to Government”

(Emphasis added)

41.Thus, the above aspects show that the State of Maharashtra by

notification dated 28

December 2017 designated the Maharashtra

Revenue Tribunal at Brihanmumbai constituted and functioning under

the Maharashtra Revenue Code to be the Appellate Tribunal to hear

appeals under RERA until the establishment of Real Estate Appellate

Tribunal under Section 43 of the RERA. The Government of

Maharashtra appointed the Chairperson and members of the

Maharashtra Real Estate Appellate Tribunal by Government Resolution

dated 8

May 2018. The said Chairperson and members took oath on

December 2018. Thus, the Maharashtra Real Estate Appellate

Tribunal started functioning with effect from 24

December 2018.

42.Thus, it is clear that the Appellate Tribunal came into existence

only on 24

December 2018 on which date the Chairperson and other

members took oath. The establishment of Appellate Tribunal as

envisaged under Section 43 will have to be understood in this manner

only. Otherwise, the effect is although the Appellate Tribunal has not

SA 251.2022.doc 29.12

actually come into existence, it will have to be assumed that the same is

established. If the contention of the Appellants are accepted then the

effect will be transfer of Appeals filed under RERA being adjudicated by

Maharashtra Revenue Tribunal in its capacity as Maharashtra Real

Estate Appellate Tribunal to the non-existing and non-functional

Maharashtra Real Estate Appellate Tribunal. It is very clear that the

Maharashtra Real Estate Appellate Tribunal stands established and

come into existence in accordance with section 43(1) read with Rule 8

of said Rules only after the Chairperson and members are appointed

and they enter their office after taking oath.

43.It is submitted by learned Counsel on behalf of the Appellant that

by Notification dated 8

May 2018 the Chairman, Judicial Member and

Technical Member of RERA Appellate Tribunal were appointed and

therefore, the date of establishment of the Appellate Tribunal is 8

May

2018 and till the date of taking oath by the Chairperson and members

which took place on 24

December 2018 it has to be assumed that the

said post has remained vacant, although the Appellate Tribunal was

established on 8

May 2018. It is submitted that unless the Maharashtra

Real Estate Appellate Tribunal is established there can not be the

notification appointing the Chairperson and the members of the Real

Estate Appellate Tribunal. It is submitted that, thus the said Government

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Resolution dated 8

May 2018 appointing the Chairperson and

members for the said Appellate Tribunal be deemed to be notification

establishing the Appellate Tribunal. It is thus submitted that the

establishment of the Appellate Tribunal as contemplated under sub-

section (1) of section 43 read with second proviso to sub-section (4) of

section 43 has taken place on 8

May 2018 and therefore, the

Maharashtra Revenue Tribunal has no jurisdiction to deal with the said

appeals. Thus, it is submitted that the impugned order dated 1

November 2018 passed by the learned President, Maharashtra Revenue

Tribunal and Incharge, Maharashtra Real Estate Appellate Tribunal,

Mumbai is without jurisdiction.

44.As already noted herein above, Rule 8 of Real Estate Appellate

Tribunal Rules specifically provides that the Chairperson and Member of

the Appellate Tribunal shall before entering office make and subscribe

an oath of office and secrecy which has taken place on 24

December

2018. Thus, it is clear that till 24

December 2018 there is no Appellate

Tribunal established.

45.In support of the above contentions, the Appellants have very

heavily relied on the Government Resolution dated 8th May 2018.

However, perusal of the said Government Resolution clearly shows that

the said Government Resolution has been issued by exercising power

SA 251.2022.doc 29.12

under Section 46(2) and (3) of RERA and by which Chairman and

Members as provided under Section 45 of RERA have been appointed.

46.In this behalf it is relevant to note that Section 43 of RERA is

concerning establishment of Real Estate Appellate Tribunal, Section 45

is regarding composition of Appellate Tribunal, Section 46 is concerning

qualifications for appointment of Chairperson and Members and

inter

alia

provides of manner of selection of Chairperson and Members and

manner of their appointment, Section 47 is concerning term of office of

Chairperson and Members, Section 48 is concerning salary and

allowances payable to Chairperson and Members. Thus, it is clear that

the scope and ambit of all these Sections is different. By no stretch of

imagination, it can be said that issuance of Governement Resolution

appointing the Chairperson and Members made by appropriate

Government i.e. Government of Maharashtra in this particular case, by

exercising power under Section 46(2) and (3) can be considered as

notification establishing Appellate Tribunal under Section 43 of the said

Act.

47.In this behalf, it is very relevant to note that as set out herein

above by Government Resolution dated 8th May 2018 the Government

of Maharashtra appointed Chairman and Members of Appellate Tribunal

and they took oath before entering the office on 24th December 2018.

Pursuance of the same the State Government issued notification dated

100

SA 251.2022.doc 29.12

24th October 2019 under Section 43(1) of the RERA by which the

Government Notification dated 28th December 2017 was superseded

and the Maharashtra Real Estate Appellate Tribunal was established for

the State of Maharashtra consisting of a retired High Court Judge, a

Judicial Member and an Administrative/Technical Member and further

specifically mentioning that the Appellate Tribunal has been functional

with effect from 24th December 2018. Thus, it is clear that the

notification establishing the Appellate Tribunal has been issued by the

State Government by exercising powers conferred Sub-Section (1) of

Section 43 of RERA on 24th October 2019 specifying that the

Maharashtra Real Estate Appellate Tribunal is functioning from 24

December 2018. Thus, it has to be held that the Maharashtra Real

Estate Appellate Tribunal was established on 24th December 2018.

Thus, when the impugned Orders were passed on 1st November 2018,

the learned President, Maharashtra Revenue Tribunal, Mumbai was

acting as Designated Maharashtra Real Estate Appellate Tribunal,

Mumbai pursuant to notification dated 28th December 2017 issued in

exercise of the powers conferred by the first proviso to Sub-Section (4)

of Section 43 of RERA. The said notification dated 28th December 2017

has been superseded by Government Notification dated 24th October

2019 w.e.f. 24th December 2018. Thus, it is very clear that the

Maharashtra Real Estate Appellate Tribunal was established on 24th

101

SA 251.2022.doc 29.12

December 2018 and started functioning w.e.f. the said date.

48.It is submitted by learned Counsel of the Appellants that by

Notification dated 8

May 2018 the Chairman, Judicial Member and

Technical Member of RERA Appellate Tribunal were appointed and as

by Notification dated 8

May 2018 the Chairperson and Member were

appointed the same has to be treated as Notification issued under

Section 43 (1) and not Notification under Section 46(2) and (3) of the

said Act. It is submitted on behalf of the Appellant that in Sub-Section

(1) of Section 43 and in second proviso to Sub-Section (4) of Section

43, the word used is “establish” and, therefore, the same has to be given

same meaning.

49.However, it is required to be noted that the said Government

Resolution dated 8

May 2018 has been specifically issued under

Section 46(2) and (3) of the RERA. By the said Government Resolution,

Chairperson and Members of Maharashtra Real Estate Appellate

Tribunal were appointed. The Notification which is required to be

issued under Sub-Section (1) of Section 43 establishing Appellate

Tribunal cannot be equated with the Government Resolution issued

under Section 46(2) and (3) of RERA. Both these Sections i.e. Section

43 and Section 46 operate in different sphere. Section 43 is concerning

establishment of Real Estate Appellate Tribunal whereas Section 46 is

102

SA 251.2022.doc 29.12

concerning qualification for appointment of Chairperson and Members

of Real Estate Appellate Tribunal and the manner of their selection.

Thus, there is no substance in the contention raised on behalf of the

Appellants.

50.One of the contention raised by learned Counsel appearing for

the Appellants is that establishment of the Maharashtra Real Estate

Appellate Tribunal is an event which will take place only on one

occasion and the taking of oath of office and secrecy as contemplated by

Rule 8 of Real Estate Appellate Tribunal Rules, will take place as and

when new appointments are made. Thus, it is submitted that taking of

oath of office and secrecy, before entering upon the office by

Chairperson and members on 24

December 2018 is totally irrelevant

and the establishment of the Maharashtra Real Estate Appellate

Tribunal has taken place on 8

May 2018. The scope and ambit of

Goverment Resolution dated 8

May 2018 issued by exercising powers

under Section 46(2) and (3) of RERA and also of notification dated 24

October 2018 issued by exercising powers under Sub-section (1) of

Section 43 of RERA has been discussed herein above in detail. It is

correct that establishment of the Maharashtra Real Estate Appellate

Tribunal is an event which will take place only on one occasion and the

taking of oath of office and secrecy as contemplated by Rule 8 of Real

Estate Appellate Tribunal Rules, will take place as and when new

103

SA 251.2022.doc 29.12

appointments are made. However, as already discussed herein above in

detail and more particularly in view of notification dated 24

October

2019, by giving elaborate reasons it has been held that the

establishment of the Maharashtra Real Estate Appellate Tribunal took

place on 24

December 2018 and not on 8

May 2018 as contended by

the Appellants. While discussing the said point, apart from other aspects

the scheme of the act has also been taken into consideration. As the

Government Resolution dated 8

May 2018 has been issued by

exercising powers under Sections 46(2) and (3) of RERA, the said

Government Resolution by no stretch of imagination can be held to be

notification issued under Sub-section (1) of Section 43 of RERA of

establishing Maharashtra Real Estate Appellate Tribunal.

51.Learned Counsel of the Appellants relied on the decision of the

Supreme Court in Allahabad Bank (supra) and submitted that as soon

as notification appointing Maharashtra Real Estate Appellate Tribunal

has been issued the designated Appellate Tribunal i.e. Maharashtra

Revenue Tribunal ceases to have jurisdiction. Learned Senior Counsel

therefore, submits that as soon as the above referred notification dated

May 2018 was issued, in terms of the law laid down in Allahabad

Bank (supra), the Maharashtra Revenue Tribunal will have no

jurisdiction and all the appeals shall stand transferred to Maharashtra

Real Estate Appellate Tribunal.

104

SA 251.2022.doc 29.12

52.To appreciate this contention it is required to be noted that, in

Allahabad Bank (supra) the Supreme Court was considering Sections 17

and 18 of the

Recovery of Debts and Bankruptcy Act, 1993 (“

RDB Act”).

53.It is relevant to note Paragraph Nos.20 to 25 of the decision in

Allahabad Bank (supra), which reads as under :-

“

20. We shall refer to Sections 17 and 18 in Chapter

III of the RDB Act, which deal with adjudication of

the debt

"17. Jurisdiction, powers and authority of

Tribunals (1)

A Tribunal shall exercise, on and

from the appointed day, the jurisdiction, powers

and authority to entertain and decide applications

from the banks and financial b institutions for

recovery of debts due to such banks and financial

institutions.

(2) An Appellate Tribunal shall exercise, on and from

the appointed day, the jurisdiction, powers and

authority to entertain appeals against any order

made, or deemed to have been made, by a Tribunal

under this Act.

18. Bar of jurisdiction. On and from the appointed

day, no court or other authority shall have, or be

entitled to exercise, any jurisdiction, powers or

authority (except the Supreme Court, and a High

Court exercising jurisdiction under Article 226 and

227 of the Constitution) in relation to the matters

specified in Section 17."

It is clear from Section 17 of the Act that the Tribunal

is to decide the applications of the banks and

financial institutions for recovery of debts due to

them. We have already referred to the definition of

"debt" in Section 2(g) as amended by Ordinance 1 of

2000. It includes "claims" by banks and financial

institutions and includes the liability incurred and

also liability under a decree or otherwise. In this

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context Section 31 of the Act is also relevant. That

section deals with transfer of pending suits or

proceedings to the Tribunal. In our view, the word

"proceedings" in Section 31 includes "execution

proceedings" pending before a civil court before the

commencement of the Act. The suits and proceedings

so pending on the date of the Act stand transferred to

the Tribunal and have to be disposed of "in the same

manner" as applications under Section 19.

21. In our opinion, the jurisdiction of the Tribunal in

regard to adjudication is exclusive. The RDB Act

requires the Tribunal alone to decide applications for

recovery of debts due to banks or financial

institutions. Once the Tribunal passes an order that

the debt is due, the Tribunal has to issue a certificate

under Section 19(22) [formerly under Section 19(7)]

to the Recovery Officer for recovery of the debt

specified in the certificate. The question arises as to

the meaning of the word "recovery" in Section 17 of

the Act. It appears to us that basically the Tribunal is

to adjudicate the liability g of the defendant and then

it has to issue a certificate under Section 19(22).

Under Section 18, the jurisdiction of any other court

or authority which would otherwise have had

jurisdiction but for the provisions of the Act, is ousted

and the power to adjudicate upon the liability is

exclusively vested in the Tribunal. (This exclusion

does not however apply to the jurisdiction of the

Supreme Court or of a High Court exercising power

under Articles 226 or h 227 of the Constitution.) This

is the effect of Sections 17 and 18 of the Act .

22. We hold that the provisions of Sections 17 and 18

of the RDB Act are exclusive so far as the question of

adjudication of the liability of the a defendant to the

appellant Bank is concerned.

(ii) Execution of certificate by Recovery Officer: is his

jurisdiction exclusive

23. Even in regard to "execution", the jurisdiction of

the Recovery Officer is exclusive. Now a procedure

has been laid down in the Act for recovery of the debt

as per the certificate issued by the Tribunal and this

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procedure is contained in Chapter V of the Act and is

covered by Sections 25 bto 30. It is not the

intendment of the Act that while the basic liability of

the defendant is to be decided by the Tribunal under

Section 17, the banks/financial institutions should go

to the civil court or the Company Court or some other

authority outside the Act for the actual realisation of

the amount. The certificate granted under Section

19(22) has, in our opinion, to be executed only by

the Recovery Officer. No dual jurisdictions at different

stages are contemplated. Further, Section 34 of the

Act gives overriding effect to the provisions of the

RDB Act. That section reads as follows:

"34. (1) Act to have overriding effect (1) Save as

provided under sub-section (2), the provisions of this

Act shall have effect notwithstanding anything

inconsistent therewith contained in any other law for

the time being in force or in any instrument having

effect by virtue of any law other than this Act.

(2) The provisions of this Act or the rules made

thereunder shall be in addition to, and not in

derogation of, the Industrial Finance Corporation Act,

1948 (15 of 1948), the State Financial Corporations

Act, 1951 (63 of 1951), the Unit Trust of India Act,

1963 (52 of 1963), the Industrial Reconstruction

Bank of India Act, 1984 (62 of 1984) and the Sick

Industrial Companies (Special Provisions) Act, 1985

(1 of 1986)."

The provisions of Section 34(1) clearly state that the

RDB Act overrides other laws to the extent of

"inconsistency". In our opinion, the prescription of an

exclusive Tribunal both for adjudication and

execution is a procedure clearly inconsistent with

realisation of these debts in any other manner.

24. There is one more reason as to why it must be

held that the jurisdiction of the Recovery Officer is

exclusive. The Tiwari Committee which

recommended the constitution of a Special Tribunal

in 1981 for recovery of debts due to banks and

financial institutions stated in its report that the

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exclusive jurisdiction of the Tribunal must relate not

only in regard to the adjudication of the liability but

also in regard to the execution proceedings. It stated

in Annexure XI of its report that all "execution

proceedings" must be taken up only by the Special

Tribunal under the Act. In our opinion, in view of the

special procedure for recovery prescribed in Chapter

V of the Act, and Section 34, execution of the

certificate is also within the exclusive jurisdiction of

the Recovery Officer.

25. Thus, the adjudication of liability and the

recovery of the amount by execution of the certificate

are respectively within the exclusive jurisdiction h of

the Tribunal and the Recovery Officer and no other

court or authority much less the civil court or the

Company Court can go into the said questions

relating to the liability and the recovery except as

provided in the Act. Point 1 is decided accordingly. ”

(Emphasis added)

54.Perusal of Sections 17 and 18 of RDB Act and also above

discussion in the case of Allahabad Bank (supra) shows that the point

involved in the said case is concerning exclusive jurisdiction of Debts

Tribunals in view of specific provision of Sections 17, 18 and as also

Section 34 of RDB Act and not the question which is before this Court.

It is significant to note that Sub-Section (1) of Section 17 of the RDB

Act which is concerning jurisdiction, powers and authority of Tribunals

provides that a Tribunal shall exercise on and from the appointed date,

the jurisdiction, powers and authority to entertain and decide

applications from the bank and financial institutions for recovery of

debts due to such banks and financial institutions. Sub-Section (2) of

Section 17 of the RDB Act which is concerning jurisdiction, powers and

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authority of Appellate Tribunal provides that an Appellate Tribunal shall

exercise, on and from the appointed date, the jurisdiction, powers and

authority to entertain appeals against any order made or deemed to

have been made by a Tribunal under the RDB Act. Thus, it is significant

to note that Section 17 of the RDB Act provides that “from the

appointed day” the Tribunal and Appellate Tribunal will have

jurisdiction. This is not the point involved in this matter. Before this

Court the question involved is what is scope and ambit of the term

“establish” as used in Section 43 of the RERA. The said point arising

before this Court has been discussed extensively herein above. Thus, the

judgment of the Allahabad Bank (supra) will have no application in this

particular case.

55.The Appellants have also relied on the decision in the case of

Hara Parbati Cold Storage Pvt. Ltd (supra). However, the said decision

is on the basis of decision in the case of Allahabad Bank (supra), which

has been extensively discussed herein above.

56.Reliance is also placed by learned Counsel appearing for the

Appellants on the decision of learned National Company Law Appellate

Tribunal, Principal Bench, New Delhi and more particularly on

Paragraph Nos.54 and 55 of the same, which reads as under:

“54.The next arguments of the Appellant is that Section

434 of the Act was made operative from 01.06.2016 by

notification no. S.O. 1936(E) which provides that in exercise

of the powers conferred by clause (a) of sub-section (1) of

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Section 434 of the Act, 2013 (18 of 2013), ‘the Central

Government hereby appoints the 1st day of June, 2016, on

which all matters or proceedings or cases pending before the

CLB shall stand transferred to the NCLT and it shall dispose of

such matters or proceedings or cases in accordance with the

provisions of the Act, 2013 or the Companies Act, 1956’.”

55.Since, the CLB was not having the jurisdiction or

power to issue contempt notice on the alleged disobedience of

its order, therefore, 3A Capital rightly did not file any

application before the CLB which was thus not pending as on

01.06.2016 when Section 434 of the Act was made operative.

Even otherwise, Section 434(1)(a) of the Act categorically

provides that all matters, proceedings or cases pending before

the CLB, immediately before such date shall stand transferred

to the Tribunal and the Tribunal shall dispose of such matters,

proceedings or cases in accordance with the provisions of this

Act. It means that the proceedings, cases or matters which

were pending as on 01.06.2016 before the CLB shall

automatically be transferred to the Tribunal but if the

proceedings are not pending on that date then it cannot be

transferred automatically to the Tribunal.”

The above Paragraphs clearly shows that the said Judgment is in the

context of Section 434 of the Companies Act, 2013. In that case, the

Central Government has appointed the 1

day of June 2016, on which

date all matters or proceedings or cases pending before the Company

Law Board (CLB) shall stand transferred to the NCLT. Thus, in that case

a specific date has been appointed by the Central Government for the

purpose of transfer of the cases from CLB to NCLT. However, in the

present case, as discussed herein above extensively the issue is

completely different and, therefore, the said Judgment will have no

application to the facts of the present case.

57.Learned Counsel of the Appellants also relied on the judgment of

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the Supreme Court in the case of Sushil Kumar Mehta (supra). The

relevant Paragraph is Paragraph No.26, which reads as under :-

“

26. Thus it is settled law that normally a decree

passed by a court of competent jurisdiction, after

adjudication on merits of the rights of the parties,

operates as res judicata in a subsequent suit or

proceedings and binds the parties or the persons

claiming right, title or interest from the parties. Its

validity should be assailed only in an appeal or

revision as the case may be. In subsequent

proceedings its validity cannot be questioned.

decree passed by a court without jurisdiction over

the subject matter or on other grounds which goes

to the root of its exercise or jurisdiction, lacks

inherent jurisdiction. It is a coram non judice. A

decree passed by such a court is a nullity and is

non est. Its invalidity can be set up whenever it is

sought to be enforced or is acted upon as a

foundation for a right, even at the stage of

execution or in collateral proceedings. The defect

of jurisdiction strikes at the authority of the court

to pass a decree which cannot be cured by consent

or waiver of the party. If the court has jurisdiction

but there is defect in its exercise which does not go

to the root of its authority, such a defect like

pecuniary or territorial could be waived by the

party. They could be corrected by way of

appropriate plea at its inception or in appellate or

revisional forums, provided law permits. The

doctrine of res judicata under Section 11 CPC is

founded on public policy. An issue of fact or law or

mixed question of fact and law, which are in issue

in an earlier suit or might and ought to be raised

between the same parties or persons claiming

under them and was adjudicated or allowed

uncontested becomes final and binds the parties or

persons claiming under them. Thus the decision of

a competent court over the matter in issue may

operate as res judicata in subsequent suit or

proceedings or in other proceedings between the

same parties and those claiming under them. But

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the question relating to the interpretation of a

statute touching the jurisdiction of a court

unrelated to questions of fact or law or mixed

questions does not operate as res judicata even

between the parties or persons claiming under

them. The reason is obvious; a pure question of

law unrelated to facts which are the basis or

foundation of a right, cannot be deemed to be a

matter in issue. The principle of res judicata is a

facet of procedure but not of substantive law. The

decision on an issue of law founded on fact in issue

would operate as res judicata. But when the law

has since the earlier decision been altered by a

com-petent authority or when the earlier decision

declares a transaction to be valid despite

prohibition by law it does not operate as res

judicata. Thus a question of jurisdiction of a court

or of a procedure or a pure question of law

unrelated to the right of the parties founded purely

on question of fact in the previous suit, is not res

judicata in the subsequent suit. A question relating

to jurisdiction of a court or interpretation of

provisions of a statute cannot be deemed to have

been finally determined by an erroneous decision

of a court. Therefore, the doctrine of res judicata

does not apply to a case of decree of nullity. If the

court inherently lacks jurisdiction consent cannot

confer jurisdiction. Where certain statutory rights

in a welfare legislation are created, the doctrine of

waiver also does not apply to a case of decree

where the court inherently lacks juris-diction.

”

(Emphasis added)

58.The Supreme Court in the case of Sushil Kumar Mehta (supra)

was considering the issue of

res judicata particularly in case of a

decision which has been passed in a proceeding without jurisdiction and

therefore, the same is a nullity. As held herein above by giving elaborate

reasons it has been held by this Court that the designated Appellate

Tribunal i.e. Maharashtra Revenue Tribunal has jurisdiction to deal with

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the Appeal under RERA upto 23rd December 2018 and, therefore, the

impugned Order dated 1st November 2018 passed by the learned

President, Maharashtra Revenue Tribunal, Mumbai and Incharge,

Maharashtra Real Estate Appellate Tribunal, Mumbai is within

jurisdiction. Therefore, the said decision in the case of Sushil Kumar

Mehta (supra) is not applicable.

59.Learned Counsel of the Appellants have also relied on the

decision of Hasham Abbass Sayyad (supra) and Harshad Chiman Lal

Modi (supra) to support the contention regarding issue of jurisdiction.

However, by elaborately considering the scheme of RERA, the objects

and reasons for enacting RERA and by interpreting Section 43 of RERA

read with Rule 8 of Real Estate Appellate Tribunal Rules it has already

been held herein above that the designated Appellate Tribunal i.e.

Maharashtra Revenue Tribunal and Incharge, Maharashtra Real Estate

Appellate Tribunal has jurisdiction to decide the said issue. Therefore,

these decisions have no application to this case.

60.Learned Counsel of the Appellants has relied on the decision of

the Supreme Court in the case of Baswaraj (supra) as also

Commissioner of Agricultural Income Tax (supra) and submitted that a

statutory provision may cause hardship or inconvenience to a particular

party but the Court has no choice but to enforce it giving full effect to

the same. Learned Counsel submitted that as in view of clear and

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unambiguous provision of Section 43 of the RERA and in view of

notification dated 8

May 2018, all appeals which are pending before

the Maharashtra Revenue Tribunal shall stand transferred to

Maharashtra RERA Appellate Tribunal. Learned Counsel more

particularly relied on Paragraph No.12 of Baswaraj (supra), which reads

as under :-

“

12. It is a settled legal proposition that law of

limitation may harshly affect a particular party but

it has to be applied with all its rigour when the

statute so prescribes. The court has no power to

extend the period off limitation on equitable

grounds.

"A result flowing from a statutory

provision is never an evil. A court has no power to

ignore that provision to relieve what It considers a

distress resulting from its operation." The statutory

provision may cause hardship or inconvenience to a

particular party but the court has no choice but to

enforce it giving full effect to the same. The legal

maxim dura lex sed lex which means "the law is

hard but it is the law", stands attracted in such a

situation. It has consistently been held that,

"inconvenience is not" a decisive factor to be

considered while interpreting a statute.”

(Emphasis added)

61.The above legal position is well settled. There is no manner of

doubt that once Maharashtra RERA Appellate Tribunal is established all

appeals which are pending before designated Appellate Tribunal i.e.

Maharashtra Revenue Tribunal shall stand transferred to Maharashtra

RERA Appellate Tribunal. Therefore, the issue which is involved in this

Second Appeals is the scope of the term “established” as in Section 43 of

RERA, which has been discussed in earlier part of the judgment

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extensively. As held herein above the Maharashtra RERA Appellate

Tribunal has established from the date on which the same has become

functional i.e. with effect from 24

December 2018 and the same is very

clear from the Notification dated 24

October 2019 issued by the State

of Maharashtra under Sub-Section (1) of Section 43 of the RERA.

Therefore, the impugned decision of learned President, Maharashtra

Revenue Tribunal, Mumbai and Incharge, Real Estate Appellate

Tribunal, Mumbai dated 1

November 2018 is within jurisdiction. It is

very clear that all appeals which were pending before the designated

Appellate Tribunal i.e. Maharashtra Revenue Tribunal and Incharge,

Real Estate Appellate Tribunal, Mumbai shall stand transferred on 24

December 2018 immediately to Real Estate Appellate Tribunal, Mumbai.

62.Mr. Kamat, learned Senior Counsel relied on judgment of High

Court of Jharkhand at Ranchi in the matter of Arjun Kumar Singh

(supra). Paragraph No.4 of the said judgment, reads as under :-

“

4. Learned counsel appearing for the appellant

has submitted that the

petitioner was, working as

Signal Man/Sipoyee in the Indian Army and Major

General, Ground Officer Commanding (GOC), 23rd

Infantry Division, passed an order of discharge of

this petitioner and therefore, the petition was

preferred initially, before the Hon'ble Patna High

Court and thereafter. before this High Court under

Article 226 of the Constitution of India, thereafter,

Armed Forces Tribunal came into force vide

Notification dated 18.11.2009/ The Armed Forces

Tribunal at Kolkata came into force and the said

Tribunal is working since 23.11.2009 and therefore,

by virtue of Section 34 of the Armed Forces Tribunal

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Act, 2007 (hereinafter referred to as the Act, 2007

for the sake of brevity), the writ petition bearing

W.P. (S) No. 1769 of 2004 stood transferred to the

said Armed Forces Tribunal, automatically, by virtue

of Sub-section (1) of Section 34 of the Act. 2007

and hence, the judgment and order passed by the

learned Single Judge deserves to be quashed and set

aside because there was want of jurisdiction on the

part of this Court and this appellant (original

petitioner) is ready and willing to go before the

Armed Forces Tribunal at Kolkata and shall

cooperate in hearing before the said Tribunal and

shall not ask for unnecessary adjournments and

shall also cooperate in earlier disposal of this

petition on merit.

”

(Emphasis added)

63.It is significant to note that in the said decision of Arjun Kumar

Singh (supra) the Armed Forces Tribunal came into force vide

notification dated 18

November 2009 and the said tribunal started

working since 23

November 2009 and therefore it has been held that

the Writ Petition pending before the High Court Jharkhand stood

transferred to the said Armed Forces Tribunal automatically by virtue of

Section 34 of Armed Forces Tribunal Act, 2007. Thus, in fact the said

decision supports the contention of the Respondent that what is

contemplated by “establishment” of the tribunal is establishment of

functional tribunal. In any case, the said aspect in the context of the

provisions of RERA have been extensively discussed earlier. Thus, the

said decision is not relevant.

64.Learned Counsel of the Appellants also relied on judgment of

Supreme Court in the case of B. Premanand (supra) and more

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particularly on Paragraph Nos.15 and 16 of the same which reads as

under :-

“

15. As observed by this Court in CIT (Ag) v. Keshab Chandra

Mandalto: a AIR-p. 270, para 20)

"20....

Hardship or inconvenience cannot alter the

meaning of the language employed by the

legislature if such meaning is clear on the face of

the statute.…"

(emphasis supplied)

16. Where the words are unequivocal, there is no scope for

importing any rule of interpretation (vide Pandian Chemicals

Ltd. v. CIP). It is only where b the provisions of a statute are

ambiguous that the court can depart from a literal or strict

construction (vide Nasiruddin v. Sita Ram Agarwal 2), Where

the words of a statute are plain and unambiguous effect must

be given to them (vide Bhaiji v. SDO).”

(Emphasis added)

65.It is also relevant to note Paragraph No.17 of the said decision of

B. Premanand (supra), which reads as under :-

“

17. No doubt in some exceptional cases departure

can be made from the literal rule of the

interpretation, e.g. by adopting a purposive

construction, Heydon mischief rule, etc. but that

should only be done in very exceptional cases.

Ordinarily, it is not proper for the court to depart

from the literal rule as that would really be

amending the law in the garb of interpretation,

which is not permissible (vide J.P. Bansal v. State of

Rajasthan's and State of Jharkhand v. Govind

Singh16). It is for the legislature to amend the law

and not the court (vide State of Jharkhand v.

Govind Singh).

”

66.This aspect has been elaborately discussed herein above. In any

case, establishment of Maharashtra RERA Appellate Tribunal on paper

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cannot be considered as “establishment” unless the Chairman and the

Members take oath as they enter their respective Offices only after

taking oath.

67.Learned Counsel of the Appellants also relied on the decision of

House of Lords in the case of Britnell (supra) and more particularly

on the following paragraph :-

“The purpose of a transitional provision being to

facilitate the change from one statutory regime to

another, it could not properly be regarded as

authorising innovation by widening the ambit of

the substantive legislation.

As Staughton LJ observed in the Court of Appeal, it

is not possible to give a definitive description of

what constitutes a transitional provision. In

Thornton on Legislative Drafting (3rd edn, 1987) p

319 it is said:

The function of a transitional provision is to make

special provision for the application of legislation

to the circumstances which exist at the time when

that legislation comes into force.'

One feature of a transitional provision is that its

operation is expected to be temporary, in that it

becomes spent when all the past circumstances

with which it is designed to deal have been dealt

with, while the primary legislation continues to

deal indefinitely with the new circumstances which

arise after its passage.”

(Emphasis added)

68.It is correct that the purpose of a transitional provision being to

facilitate the change from one statutory regime to another could not

properly be regarded as authorizing innovation by widening the ambit

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of the substantive legislation. However, in this particular case, the

Government Resolution dated 8

May 2018 by which Chairperson and

Members of the Appellate Tribunal were appointed cannot be held to

be the Notification issued under Sub-Section (1) of Section 43 of

RERA. As discussed extensively herein above that the Notification

dated 24

October 2019 has been issued under Sub-Section (1) of

Section 43 of RERA by which the Maharashtra Real Estate Appellate

Tribunal has been established w.e.f. 24

December 2018. Thus, there

is no question of establishment of the Maharashtra Real Estate

Appellate Tribunal on 8

May 2018. It is further significant to note

that by the said notification, notification dated 28

December 2017 by

which Maharashtra Revenue Tribunal at Bruhanmumbai Constituted

and functioning under the Maharashtra Revenue Code, 1966 was

designated to be the Appellate Tribunal under RERA is superseded

and it is specifically recorded that the tribunal started functioning

with effect from 24

December 2018. Thus, the said decision in

Britnell (supra) has no application.

69.Learned Counsel of the Appellants have relied on the decision of

the Supreme Court in the case of Nelson Motis (supra) and more

particularly on paragraph no.8 of the same. In the said case it has

been held that if the words of a statute are clear and free from any

vagueness and are, therefore, reasonably susceptible to only one

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meaning, it must be construed by giving effect to that meaning,

irrespective of consequences. When the language is plain and

unambiguous and admits of only one meaning, no question of

construction of a statute arises, for the act speaks for itself. This

aspect has already been discussed in earlier part of the judgment. It is

settled legal position that the provisions of the Act must receive such

construction at the hands of the court as would advance the object

and purpose underlying the Act and at any rate not to defeat it. If the

words of the statute are clear and unambiguous, it is the plainest duty

of the court to give effect to the natural meaning of the words used in

the provision. The question of construction arises only in the event of

an ambiguity or the plain meaning of the words used in the statute

would be self-defeating. As Section 43 clearly contemplates that the

Appropirate Government shall appoint Maharashtra Real Estate

Appellate Tribunal and until that time any Appellate Tribunal

functioning under any law to be designated as Appellate Tribunal to

hear and dispose of appeals filed under RERA and accordingly,

Maharashtra Revenue Tribunal has been designated as Appellate

Tribunal. This aspect has already been elaborately discussed earlier. In

any case, Maharashtra Real Estate Appellate Tribunal was established

by notification dated 24

October 2019 with effect form 24

December 2018 and therefore there is no substance in the contention

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raised by the Appellants.

70.Learned Counsel of the Appellants has also relied on the decision

of the Supreme Court in the case of Sansera Engineering (supra) and

submitted that the subordinate legislation cannot override the parent

statute. Subordinate legislation can always be in aid of the parent

statute. At the cost of repetition, it is observed that subordinate

legislation cannot override the parent statute. Subordinate legislation

which is in aid of the parent statute has to be read in harmony with

the parent statute. Subordinate legislation cannot be interpreted in

such a manner that parent statute may become otiose or nugatory.

This submission is made in view of Rule 8 of the Real Estate Appellate

Tribunal Rules and on the assumption that the Maharashtra Real

Estate Appellate Tribunal was established by Government Resolution

dated 8

May 2018. The observations of the Supreme Court in

Sansera Engineering (supra) are not at all applicable to the present

case. The scope of Rule 8 of Real Estate Appellate Tribunal Rules is

totally different which provides that every person appointed as the

Chairperson of the Appellate Tribunal shall before entering upon his

office shall make and subscribe an oath of Office and Secrecy in

prescribed format. As discussed extensively herein above that the

Notification dated 24

October 2019 has been issued under Sub-

Section (1) of Section 43 of RERA by which the Maharashtra Real

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Estate Appellate Tribunal has been established w.e.f. 24

December

2018. Thus, there is no question of establishment of the Maharashtra

Real Estate Appellate Tribunal on 8

May 2018. Thus the said

contentions raised are without any basis.

71.Thus, for the above reasons there is no substance in the First

Substantial Question of Law.

72.The Substantial Questions of Law Nos.3, 4 and 5 as framed by

Order dated 12th December 2024 will be considered hereinafter. The

said substantial questions of law are treated as 2nd, 3rd and 4th

substantial questions of law. They are reproduced herein below for

ready reference:

SECOND SUBSTANTIAL QUESTION OF LAW:

Whether, in exercise of power to designate an authority as the

Appellate Tribunal under the first proviso to Section 43(4) of

RERA, it is necessary for the State Government to give due

regard to the provisions of Section 43(3) of RERA and ensure

that the composition of such alternate authority is in

accordance therewith?

THIRD SUBSTANTIAL QUESTION OF LAW:

Whether in exercise of power under the first proviso to

Section 43(4) of RERA, the State Government (as the

delegatee of such power) can designate an authority to

function as the Appellate Tribunal in a manner contrary to or

ultra vires Section 43(3) of RERA?

FOURTH SUBSTANTIAL QUESTION OF LAW:

Whether a single member bench of the Hon’ble Maharashtra

Revenue Tribunal, exercising power under the first proviso to

Section 43(4) of RERA has jurisdiction to adjudicate appeals

under Section 44 of RERA?

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73.The said substantial questions of law are concerning composition

of designated Appellate Tribunal i.e. Maharashtra Revenue Tribunal,

constituted by exercising power conferred by first proviso to sub-section

(4) of section 43 and are raised particularly in view of the provision of

Section 43(3) of RERA, which specifies that every bench of the

Appellate Tribunal shall consist of at least one Judicial Member and one

Administrative or Technical Member. In view of the said contentions,

the above substantial questions of law were framed.

74.As the impugned Order is passed by the President of the

Maharashtra Revenue Tribunal acting as Incharge Chairman of the

Maharashtra Real Estate Appellate Tribunal, it is contended on behalf of

the Appellants that single Member being the President of the Tribunal

who was a Judicial Member has no jurisdiction to pass the impugned

Order. In view of the said contentions the above substantial questions of

law were framed.

75.As these substantial questions of law are interconnected they are

decided together.

SUBMISSIONS OF THE APPELLANTS CONCERNING SECOND, THIRD

AND FOURTH SUBSTANTIAL QUESTIONS OF LAW:

76.Learned Counsels for the Appellants inter alia raised the

following contentions:

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i.The first proviso to Section 43(4) of RERA provides that until the

establishment of the Appellate Tribunal under Section 43(1) of RERA,

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 RERA. The second proviso to

Section 43(4) of RERA provides that after the Appellate Tribunal under

said 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. Section 43(3) of RERA provides that every bench

of the Appellate Tribunal shall consist of at least one judicial member

and one administrative or technical member. Upon the enforcement of

RERA, in January 2018, the State Government designated the Hon'ble

Maharashtra Revenue Tribunal as the Appellate Tribunal under the first

proviso to Section 43(4) of RERA to act as the Appellate Tribunal,

pending the establishment of the Appellate Tribunal under Section

43(1) of RERA. It is a matter of record that the Maharashtra Revenue

Tribunal hearing appeals under RERA was comprised of a Single

Member, being the President of the Tribunal, who was a Judicial

Member.

ii.It is submitted that under Section 43(3) of the RERA, it is

mandated that every Bench of the Appellate Tribunal shall consists of at

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least one Judicial Member and one Administrative or Technical Member.

This Hon'ble Court has, in its judgments in Man Global Ltd vs. Bharat

Prakash Joukani,

(Paragraph 6) and Larsen and Toubro Ltd vs. Rekha

Sinha

, (Paragraph 6) has held that a single Member of the Appellate

Tribunal does not have jurisdiction to dispose of any appeal or

application, in view of the plain language of Section 43(3) of RERA. In

fact, in the judgment in Larsen and Toubro Ltd. (supra), this Court

expressly held that even the provision of Section 55 of RERA cannot

validate any proceeding by a single Member of the Appellate Tribunal as

the same would be contrary to Section 43(3) of RERA. It is further

submitted that the aforesaid principles of law will apply with equal

force to any Tribunal designated to act as the Appellate Tribunal under

the first proviso to Section 43(4) of RERA. In view thereof, it is

submitted that the Hon'ble Maharashtra Revenue Tribunal acting

through the Hon'ble President sitting singly, and hearing and deciding

appeals filed under Section 44 of the RERA, did not have jurisdiction to

adjudicate upon such appeals.

iii.It is further submitted that, under the first proviso to Section

43(4) of RERA, the Parliament has delegated to the State Government

the power to designate any Appellate Tribunal functioning under any

law to be the Appellate Tribunal to hear appeals under RERA. However,

22 2019 SCC OnLine Bom 2466

23 2019 SCC OnLine Bom 13273

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while exercising such delegated power, the State Government cannot

act contrary to or ignore the express provisions of RERA (under which

such delegation takes place), in respect of the composition of the

Appellate Tribunal. It is well settled that a delegatee of power cannot

act contrary to the provisions of the statute and must act within the four

corners of the delegation. In this regard attention of this Hon'ble Court

is invited to the paragraphs 76-77 of the judgment of the Hon'ble

Supreme Court in DDA v. Joint Action Committee, Allottee of SFS

Flats

iv.It is submitted that the Hon'ble Supreme Court, in Dr. Mahabal

Ram v. Indian Council of Agricultural Research & Ors.

, while

considering the validity of Section 5(6) of the Administrative Tribunals

Act, 1985 has held in para 6 that while allocating work under sub-

section (6), the Chairman should keep in mind the nature of the

litigation, and where questions of law and interpretation of

constitutional provisions are involved, they should not be assigned to a

single member.

SUBMISSIONS OF THE RESPONDENTS CONCERNING SECOND,

THIRD AND FOURTH SUBSTANTIAL QUESTIONS OF LAW:

77.Learned Counsels for the Respondents inter alia raised the

24 (2008) 2 SCC 672

25 (1994) 2 SCC 401

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following contentions:

i.The section 43(3) contemplates the constitution of "bench" but

not the constitution of the "tribunal". The first proviso to section 43 (4)

is the proviso for the purpose of making a protem arrangement of

functioning (designate) appellate tribunal (not a Bench) until the

establishment of (permanent) appellant tribunal under section 43 (1).

Which clearly differentiate that any Appellate Tribunal functioning

under any law for the time being inforce can hear the appeals under the

RERA after such designation under first proviso of the section 43(4).

ii.The contentions advanced by the appellant that the bench of the

designated appellate tribunal as per the first proviso of section 43 (4) of

RERA is required to be in consonance with section 43 (3) of RERA is not

valid and correct argument. Because, the first proviso of section 43(4)

does not provide for the constitution of "bench" rather it is an

alternative arrangement of functional designated appellate tribunal for

the purpose of hearing of the appeals till the establishment of the

(permanent) appellate tribunal.

iii.The first proviso of section 43 (4) clearly mandates … "shall

designate, by order, any appellate tribunal functioning under any law

for the time being inforce, …” and give liberty to Government to

designate “any Appellate Tribunal” “functioning under any law” for the

time being inforce. The designated tribunal, MRT was a functioning

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tribunal under the Maharashtra Land Revenue Code at the time of

designation under RERA. It may be noted that the said MRT was

functioning validly as per it's own establishment under Maharashtra

Land Revenue Code “with single member bench” presided over by a

retired High court judge of Bombay high court. It is reiterated that the

first proviso of sec. 43 (4) has given an alternative to sec. 43 (1) which

is about the establishment of the “appellate tribunal” therefore the same

does not have any relation to the constitution of “bench” and its

members as per sec. 43 (3) of the RERA.

iv.It is submitted that the arguments of quorum non-judice and

subject matter jurisdiction shall only prevail when the said, “any”

Appellate Tribunal functioning under “any” law has not been

constituted as per the said (any) law, under which the said Tribunal has

been constituted and functioning. Hence, contentions advanced on

behalf of appellant about application of section 43(3) to the 43(4) first

proviso is not maintainable in the present factual matrix of the case. It is

not the case of the appellant that the MRT, the designated appellate

tribunal was itself incapacitated because of its erroneous constitution of

the bench under the Maharashtra Land Revenue Code.

v.It is the settled position of the law that the proviso cannot always

be furthering the object of the section instead it's arrangement may be

completely alien to the provision of the said section, where the proviso

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has been appended. A proviso is added to the principal clause with

objective of taking out the scope of that principal clause what is

included in it and what the legislature desires should be excluded

further. A proviso to a section is intended to take out a part of the main

section for special treatment. The proviso may entirely change the very

concept of the intendment of the enactment by insisting in the certain

mandatory conditions to be fulfilled in order to make enactment

workable. It is therefore submitted that the first proviso of section 43(4)

is supplement to section 43(1) for the purpose of giving an alternate

arrangement for the (Permanent) Appellate Tribunal, functioning under

any law for the intermittent period till the time (Permanent) Appellate

Tribunal is not established under the RERA. Reliance is placed in

support of this contention on S. Sundaram Pillai v. V.R. Pattabhiram

the para no.27, 30 sub para f, h and j, para no.32, 33, 37, 39, 42, 43

sub para 2 are relied upon.

REASONING CONCERNING SECOND, THIRD AND FOURTH

SUBSTANTIAL QUESTIONS OF LAW :-

78.While considering the first substantial question of law, this Court

has extensively considered the scheme of Section 43 of RERA. This -

Court has also discussed in detail the important objects and purposes of

RERA and the discussion of M/s Newtech Promoters (supra) of the

Supreme Court concerning objects and purposes of RERA. The legal

26 (1985) 1 SSC 591

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position concerning interpretation of statutes is also discussed in detail.

79.It is settled legal position that the provisions of the Act must

receive such construction at the hands of the court as would advance

the object and purpose underlying the Act and at any rate not to defeat

it. If the words of the statute are clear and unambiguous, it is the

plainest duty of the court to give effect to the natural meaning of the

words used in the provision. The question of construction arises only in

the event of an ambiguity or the plain meaning of the words used in the

statute would be self-defeating. The court is entitled to ascertain the

intention of the legislature to remove the ambiguity by construing the

provision of the statute as a whole keeping in view what was the

mischief when the statute was enacted and to remove which the

legislature enacted the statute. In matters of interpretation one should

not concentrate too much on one word and pay too little attention to

other words. No provision in the statute and no word in any section can

be construed in isolation. Every provision and every word must be

looked at generally and in the context in which it is used. The

elementary principle of interpreting any word while considering a

statute is to gather the

sententia legis or mens of the legislature. The

maxim

sententia legis or mens contemplates that the essence of the law

lies in the spirit, and not in its letter, the letters are just a way to express

the intentions of the law makers. Where the words are clear and there is

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no obscurity, and there is no ambiguity and the intention of the

legislature is clearly conveyed, there is no scope for the court to take

upon itself the task of amending or altering the statutory provisions. It

is necessary to cull out the legislative policy from various factors like the

words in the statute, the Preamble to the Act, the Statement of Objects

and Reasons, and in a given case, even the attendant circumstances.

After the legislative policy is found, then the words used in the statute

must be so interpreted such that it advances the purpose of the statute

and does not defeat it. A statute must be construed having regard to the

legislative intent. It has to be meaningful. A construction which leads to

manifest absurdity must not be preferred to a construction which would

fulfill the object and purport of the legislative intent.

80.Before applying the above principles of the interpretation of

statutes to Section 43 of RERA, it is necessary to set out hereinbelow

the relevant portion of Section 43 of RERA in the context of these

substantial questions of law :

“

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) ...

(3) Every bench of the Appellate Tribunal shall consist

of at least one Judicial Member and one

Administrative or Technical Member.

(4) ...

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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) …..

81.The scheme of Section 43 in the context of the substantial

questions of law under consideration is as follows :

(i) The appropriate Government by notification,

establish Real Estate Appellate Tribunal.

(ii) Until the establishment of Real Estate Appellate

Tribunal, 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 RERA.

(iii) After the Real Estate Appellate Tribunal 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.

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82.In view of above settled legal position concerning interpretation

of statutes, it is necessary to consider Section 43 of RERA and more

particularly the first proviso to Sub-Section (4) of Section 43 which

provides that until the establishment of an Appellate Tribunal under

Sub-Section (1) of Section 43, 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 RERA. This proviso is very specific. The words used are clear

and unambiguous. What the first proviso to Sub-Section (4) of Section

43 provides is that until the establishment of an Appellate Tribunal

under Sub-Section (1) of Section 43 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 RERA.

83.Learned Counsel of the Respondent is right in contending that the

section 43(3) contemplates the constitution of "bench" but not the

constitution of the "tribunal". The first proviso to section 43 (4) is the

proviso for the purpose of making a protem arrangement of functioning

(designate) appellate tribunal (not a Bench) until the establishment of

(permanent) appellant tribunal under section 43 (1). Which clearly

differentiate that any Appellate Tribunal functioning under any law for

the time being inforce can hear the appeals under the RERA after such

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designation under first proviso of the section 43(4).

84.It is undisputed that the Government of Maharashtra, by

exercising powers conferred by the first proviso to Sub-Section (4) of

Section 43 of RERA being the appropriate Government designated the

Maharashtra Revenue Tribunal at Brihanmumbai constituted and

functioning under the Maharashtra Land Revenue Code, 1966, to be the

Appellate Tribunal to hear the appeals under RERA, until the

establishment of the Maharashtra Real Estate Appellate Tribunal under

Sub-Section (1) of Section 43 of RERA. Thus, the said notification dated

28th December 2017 has been appropriately issued by exercising

powers conferred by the first proviso to Sub-Section (4) of Section 43 of

RERA.

85.By no stretch of imagination, the constitution of Real Estate

Appellate Tribunal i.e. permanent Appellate Tribunal can be equated

with the designated Appellate Tribunal i.e. temporary Appellate

Tribunal, which is the Appellate Tribunal functioning under any law for

the time being inforce to be designated as the Appellate Tribunal to

hear appeals under RERA as pro-tem arrangement.

86.The contention raised that the first proviso to Sub-Section (4) of

Section 43 is not an independent provision but the same is a part of the

scheme contemplated under Section 43 concerning establishment of the

Real Estate Appellate Tribunal and, therefore, every bench of the

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Appellate Tribunal shall consist of at least one Judicial Member and one

Administrative or Technical Member.

87.Before considering said submission, it is required to be noted that

the first proviso to Sub-Section (4) of Section 43 is the proviso for the

purpose of making a

pro tem arrangement, by which Appellate Tribunal

functioning under any law for the time being in force is to be

designated as the Appellate Tribunal to hear appeals under RERA till

formation of regular Real Estate Appellate Tribunal under Sub-Section

(1) of Section 43. Thus, perusal of Sub-Section (1) of Section 43 read

with Sub-Section (3) of Section 43 and the said first proviso to Sub-

Section (4) of Section 43 clearly shows that different provisions are

made for formation and establishment of regular Real Estate Appellate

Tribunal and pro-tem arrangement of temporary designated Appellate

Tribunal i.e. any Appellate Tribunal functioning under any law for the

time being inforce to be designated by the appropriate Government

until establishment of regular Real Estate Appellate Tribunal. The said

provisions are very clear and unambiguous.

88.The requirement of the first proviso to Sub-Section (4) of Section

43 for the purpose of designating an Appellate Tribunal which is

functioning under any law for the time being inforce to be the Appellate

Tribunal to hear appeals under RERA is that the said Appellate Tribunal

is a Appellate Tribunal under any law for the time being inforce and

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such Appellate Tribunal should be functioning under such other law.

Thus, the requirements of composition of the Real Estate Appellate

Tribunal as contemplated under Sub-Sections (1) and (3) of Section 43

read with Section 45 specifying composition of Appellate Tribunal and

Section 46 specifying qualification and the manner in which the

Chairperson and Members to be selected will not apply to pro-tem

arrangement as contemplated under the first proviso to Sub-Section (4)

of Section 43 of RERA. There is no dispute that the designated Tribunal

i.e. Maharashtra Revenue Tribunal is functioning Tribunal under the

Maharashtra Land Revenue Code and the said Tribunal was functioning

validly as per its own establishment under the Maharashtra Land

Revenue Code.

89.As the contentions have been raised by both the sides regarding

scope of a proviso, it is necessary to set out the Judgment of the

Supreme Court in S. Sundaram Pillai

(supra). In the said decision, by

analysing various decisions the Supreme Court has set out the different

purposes of proviso. The relevant Paragraph is Paragraph No.43 of the

said decision, which reads as under:

“43.We need not multiply authorities after authorities on

this point because the legal position seems to be clearly and

manifestly well established. To sum up, a proviso may serve

four different purposes:

(1) qualifying or excepting certain provisions from the

main enactment:

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(2) it may entirely change the very concept of the

intendment of the enactment by insisting on certain

mandatory conditions to be fulfilled in order to make the

enactment workable:

(3) it may be so embedded in the Act itself as to become an

integral part of the enactment and thus acquire the tenor

and colour of the substantive enactment itself; and

(4) it may be used merely to act as an optional addenda to

the enactment with the sole object of explaining the real

intendment of the statutory provision.

”

(Emphasis added)

90.Thus, there is substance in the contention raised by the learned

Counsel appearing for the Respondents that the first proviso of section

43(4) is supplement to section 43(1) for the purpose of giving an

alternate arrangement for the (Permanent) Appellate Tribunal,

functioning under any law for the intermittent period till the time

(Permanent) Appellate Tribunal is not established under the RERA.

91.In fact, in this particular case, first proviso to Sub-Section (4) of

Section 43 is a specific different arrangement i.e. pro-tem arrangement

till the formation and establishment of the Real Estate Appellate

Tribunal as contemplated under Sub-Section (1) of Section 43. The said

first proviso clearly shows that the same is a pro-tem arrangement for

hearing appeals under RERA immediately after enactment of RERA, till

formation and establishment of regular Real Estate Appellate Tribunal

as contemplated under Section 43(1) of RERA.

92.As already noted herein above, the RERA was inter alia enacted

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as the Real Estate and Housing Sector was largely unregulated and the

consequence was that consumers were unable to procure complete

information for enforced accountability towards builders and developers

in the absence of an effective mechanism in place. It is also noted in the

objects and reasons of RERA that though, the Consumer Protection Act,

1986 was available to cater the demand of homebuyers in the real

estate sector but the experience shows that such mechanism was

inadequate to address the needs of the home buyers and promoters in

the real estate sector. The need for RERA was badly felt for establishing

an oversight mechanism to enforce accountability in the real estate

sector and providing an adjudicating machinery for speedy dispute

redressal mechanism and safeguarding the investments made by the

homebuyers through legislation to the extent permissible under the law.

The Statement of Objects and Reasons of RERA indicates that the primal

position of the Regulatory Authority is to regulate the real estate sector

having jurisdiction to ensure compliance with the obligation cast upon

the promoters, the allottees and the real estate agents. The RERA

provided for the establishment of the Real Estate Regulatory Authority

for regulation and promotion of real estate sector and to ensure sale of

plot, apartment or building, as the case may be, in an efficient and

transparent manner and to protect the interest of consumers in real

estate sector and establish the Real Estate Appellate Tribunal to hear

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appeals from the decisions, directions or orders of the Authority. RERA

was enacted with an object to ensure greater accountability towards

consumers, to significantly reduce frauds and delays and also the high

transaction costs, and to balance the interests of consumers and

promoters by imposing certain responsibilities on both, and to bring

transparency of the contractual conditions, set minimum standards of

accountability and a fast-track dispute resolution mechanism, to impose

liability upon the promoter to pay such compensation to the allottees, in

the manner as provided, in case if the promoter fails to discharge any

obligations imposed on him.

93.The said first proviso to Sub-Section (4) of Section 43 is required

to be interpreted, having regard to the legislative intent of RERA. It is

settled legal position that the a construction which leads to manifest

absurdity must not be preferred to and construction which will fulfill

the object and purpose of the legislative intent. The legislative intent for

enacting RERA is very clear that immediately after enactment of RERA

and after Section 43 has come into effect what is contemplated is that

the appropriate Government designates any Appellate Tribunal

functioning under any law for the time being inforce to be an Appellate

Tribunal to hear appeals under RERA. Thus, what is contemplated is

immediately making available as protem arrangement an appellate

forum to the allottee or even to the promoter to enforce accountability

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and for providing an adjudicating machinery for speedy dispute

redressal mechanism till formation and establishment of regular Real

Estate Appellate Tribunal. Thus, the arrangement contemplated under

said first proviso is a protem arrangement by which the State

Government is empowered to designate any Appellate Tribunal

functioning under any law for the time being inforce to be the Appellate

Tribunal to hear appeals under RERA. Thus, it is clear that such

designated Appellate Tribunal is therefore to function only till formation

and establishment of Real Estate Appellate Tribunal and is a functioning

Appellate Tribunal under any other law for the time being in force.

Thus, the legislative intent is to immediately make available functioning

Appellate Tribunal to all the stakeholders of Real Estate Sector.

94.It is also required to be noted that the composition of Real Estate

Appellate Tribunal as per Sections 45 and 46 of RERA inter alia includes

Chairperson who is or has been a Judge of a High Court. The State

Government by exercising powers conferred by the first proviso to Sub-

Section (4) of Section 43 of RERA designated the Maharashtra Revenue

Tribunal at Brihanmumbai constituted and functioning under the

Maharashtra Land Revenue Code to be the Appellate Tribunal to hear

appeals under RERA until the establishment of Maharashtra Real Estate

Appellate Tribunal under Sub-Section (1) of Section 43 of RERA. It

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appears that the Government of Maharashtra even while designating

any Appellate Tribunal functioning under any law for the time being

inforce to be the Appellate Tribunal to hear appeals under RERA took

into consideration the aspect that the President of Maharashtra Revenue

Tribunal, Mumbai is a retired High Court Judge.

95.The reliance is placed by the Appellants on the Judgment of

Larsen and Toubro Ltd. (supra) and also on the Judgment of Man

Global Ltd. (supra). The issue in both these decisions was whether a

sole Member of the Maharashtra Real Estate Appellate Tribunal i.e.

regular and permanent Appellate Tribunal constituted by the

Appropriate Government by exercising power under sub-section (1) of

Section 43 of RERA can decide any appeal or application filed in any

appeal. In both these decisions by relying on Section 43(3) of RERA it

has been held that a Sole Member of the Maharashtra Real Estate

Appellate Tribunal has no jurisdiction to dispose of appeal or any

application. As already discussed herein above, Sub-Section (3) of

Section 43 of RERA provides that every bench of the Appellate Tribunal

shall consist of at least one Judicial Member and one Administrative or

Technical Member. However, the said provision is concerning the

regular Maharashtra Real Estate Appellate Tribunal as constituted and

established under Sub-Section (1) of Section 43 of RERA and nothing to

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do with the designated Appellate Tribunal to be designated by the

Appropriate Government by exercising power under first proviso to sub-

section (4) of Section 43. i.e. Maharashtra Revenue Tribunal designated

to act as Real Estate Appellate Tribunal till formation of permanent Real

Estate Appellate Tribunal. Thus, reliance on these decisions is totally

misconceived.

96.The contention raised by relying on the decision of the Supreme

Court in DDA v. Joint Action Committee (supra) that a delegattee of

power cannot act contrary to the provisions of statutes and must act

within the four corners of the delegation is totally misconceived. The

Section 43 empowers appropriate Government to establish regular and

permanent Real Estate Appellate Tribunal as also to designate any

Appellate Tribunal functioning as such under any law for the time being

in force as protem arrangement till establishing regular and permanent

Real Estate Appellate Tribunal. The appropriate Government is defined

in Section 2(g), as follows:

“2. Definitions.—In this Act, unless the context otherwise

requires,—

…

...

(g) “appropriate Government” means in respect of matters

relating to,—

(i) the Union territory without Legislature, the Central

Government;

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(ii) the Union territory of [Puducherry and Union territory

of Jammu and Kashmir], the Union territory Government;

(iii) the Union territory of Delhi, the Central Ministry of

Urban Development;

(iv) the State, the State Government.”

(Emphasis Supplied)

97.Thus, in the context of the present case the Government of

Maharashtra is the appropriate Government which has been empowered

to establish Maharashtra Real Estate Appellate Tribunal and till

establishment of the same as a protem arrangement designating any

Appellate Tribunal functioning under any law for the time being inforce

to be the Appellate Tribunal to hear appeals under RERA. As already

discussed herein above the Government of Maharashtra by exercise of

power under first proviso of Sub-Section (4) of Section 43 has

designated Maharashtra Revenue Tribunal constituted under the

Maharashtra Land Revenue Code, 1966 and functioning as such, to be

the Appellate Tribunal to hear appeals under RERA till formation of

Maharashtra Real Estate Appellate Tribunal. Thus, there is no substance

in the contention raised by the learned Counsels appearing for the

Appellants that the Government of Maharashtra has acted contrary to

the provisions of statutes.

98.The reliance of Appellants on Dr. Mahabal Ram (supra) is totally

misconceived as the question involved in the said case was whether a

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single member of the Central Administrative Tribunal set up under the

Administrative Tribunals Act, 1985, has jurisdiction to dispose of

matters coming before the Tribunal under the said act. Thus, the said

question is totally different and therefore, it is not relevant to the

present case. In any case, as discussed herein above in the present case

the issue is concerning Designated Appellate Tribunal i.e. temporary

Appellate Tribunal constituted under the first proviso to Sub- Section

(4) of Section 43, which provides that until the establishment of an

Appellate Tribunal under Section 43(1), 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 RERA. Thus the said judgment is not applicable.

99.Thus, for the above reasons there is no substance in the Second,

Third and Fourth Substantial Questions of Law.

100.Hereinafter the substantial questions of law Nos.1 and 2 as

framed by Order dated 12

December 2024 will be considered. The said

substantial questions of law are renumbered as substantial questions of

law nos. 5 and 6. The said substantial questions of law are as follows:

FIFTH SUBSTANTIAL QUESTION OF LAW:

When the Agreement for Sale between the Promoter and

the Allottee makes provision for force majeure events,

which have the effect of postponing the agreed date of

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possession, can authorities under RERA fix / provide for a

date of possession while adjudicating claims under Section

18 of RERA?

SIXTH SUBSTANTIAL QUESTION OF LAW:

Whether the authorities under RERA have the power to

determine or rewrite or revise the date of handover of

possession, in exercise of power under Section 18 of RERA?

101. The impugned order of the learned Appellate Tribunal

directs the Appellants to pay interest to the allottees at the rate of

10.05% effective from 1

February 2014 till handing over actual

possession. As there is a force majeure clause in the agreement

executed between the promoter and the allottees, it is the contention

of the Appellants that as a result of the force majeure clause,

effectively the agreed date of possession has been postponed and as

by the impugned order the agreed dated of possession has been fixed

by the learned Appellate Tribunal while adjudicating the claim under

Section 18 of RERA, in effect the agreement or contract has been re-

written by the learned Maharashtra Revenue Tribunal i.e. the

designated Appellate Tribunal.

102. In view of the said contentions raised, this Court has

framed the above substantial questions of law.

SUBMISSIONS OF THE APPELLANTS CONCERNING THE FIFTH

AND SIXTH SUBSTANTIAL OF LAW:

103. The learned Counsel appearing for the Appellants have

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raised the following contentions:

i.Reliance is placed on Section 18 of RERA and it is

submitted that a bare reading of Section 18(1)

demonstrates that the terms of the Agreement for Sale,

inter alia, in respect of the date for handover of possession

would be required to be taken into consideration while

adjudicating any liability under Section 18(1) of RERA. The

terms of the Agreement for Sale would axiomatically

include any attendant provisions which stipulate an

extension/exclusion of time for compliance of obligations

thereunder. It is submitted that any adjudication under

Section 18(1) dehors the terms of the Agreement for Sale

or by ignoring the terms thereof or contrary thereto would

be perverse and unsustainable in law. The failure or

inability to give possession of a unit in accordance with the

terms of the Agreement for Sale or duly completed by the

date specified in the agreement for sale is the sine qua non

for any liability to fasten on the Promoter.

ii.In the present case, the date specified in the

Agreement for Sale executed by the Appellant and the

Respondent (Clause 14@ Pg. 20 of the Compilation of

Lower Court Proceedings) is 31

December 2009, subject to

146

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reasonable extension of time in the event of happening of

any of the contingencies specified in the same clause. Thus,

while adjudicating liability under Section 18(1), the

Maharashtra Real Estate Appellate Tribunal was required to

consider the said Clause 14 and its effect. However, as is

evident from the impugned Order, the Appellate Tribunal

has failed to consider the same. Thus, the impugned Order

is contrary to the very foundational premise of Section

18(1) of RERA.

iii.It is submitted that this Court in its judgment in Sanvo

Resorts Private Limited & Ors. vs. Shital Nilesh Deshmukh

and more particularly paragraph No.18 and 19 has

inter

alia

, held that the promoter is entitled to justify delay in

completion of construction on the basis of the terms of the

agreement for sale, while defending claims under Section

18(1) of RERA.

iv.It is submitted that in case the promoter fails to

complete the project despite genuine efforts, the concerned

authorities would look into genuine cases and mould reliefs

while determining liability under Section 18 of RERA.

Thus, the element of adjudication is inherent under Section

18 of RERA. To substantiate the said contention, reliance is

27 Second Appeal No.512 of 2022

147

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placed on the decision of this Court in the case of Nilkamal

Realtors Suburban Pvt. Ltd. & Anr. vs. Union of India &

Ors.

and more particularly on paragraph No.137 of the

same.

v.It is submitted that as per the settled legal position,

the Court must enforce contracts between the parties as

entered into by such parties and cannot rewrite the

contracts. It is a Court’s duty to give effect to the terms of

the bargain struck between the parties.

vi.It is submitted that the terms of the Agreement for

Sale executed by the allottee and the promoter are binding

on the parties and ought to be enforced by

Courts/authorities. The Respondent is relying upon the

same Agreement for Sale wherein the Clauses for extension

of timelines has been mutually inserted for alleging delay

in possession. It is not in dispute that the Respondent has

acted in furtherance of the Agreement for Sale. It is not

even in dispute that the Respondent has ever challenged or

terminated the Clause 14 of the Agreement for Sale. That

being the case, the Respondent is bound by the Clauses on

extension in the possession date mutually agreed to be

inserted in the Agreement for Sale. The Agreement for Sale

282017 SCC OnLine Bom 9302

148

SA 251.2022.doc 29.12

has to be given effect and interpreted as was entered into

between the parties and in entirety. Neither party can pick

and choose what clause of the Agreement for Sale is

binding upon him and what is not. Further, it is settled law

that Courts must also enforce Agreements as envisaged

between the Parties, and cannot come up with different

bargains for either party than what the parties themselves

have contracted to in writing.

vii.To substantitate the above contentions, reliance is

placed on the following decisions of the Supreme Court:

1. Venkataraman Krishnamurthy v. Lodha Crow

Buildmart Pvt. Ltd.

2. Central Bank of India v. Hartford Fire Insurance

Co. Ltd.

3. Hongkong and Shanghai Banking Corporation

Ltd. v. Awaz

4. Neelkamal Realtors Suburban Pvt. Ltd. vs. Union

of India

5. Bharathi Knitting Company v. DHL Worldwide

Express Courier Division of Airfreight Ltd.

viii.It is submitted that while enforcing provisions of RERA

and determining liability thereunder, the authorities under

292024 INSC 132

30AIR 1965 SC 1288

312024 INSC 1044

32 2017 SCC OnLine Bom 9302

33 (1996) 4 SCC 704

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RERA ought not to curtail the freedom of contract between

the parties and contracts which have been entered into

freely and voluntarily shall be enforced. In this regard,

reliance is placed on the judgment of the Supreme Court in

the case of Zoroastrian Co-operative Housing Society Ltd v.

District Registrar, Co-operative Society (Urban)

and more

particularly paragraphs nos. 27 to 30 of the same.

ix.The term "on demand" in the context of the right of an

Allottee to refund of amounts paid is found in the main

enacting portion of Section 18(1) of RERA and the said

term does not find place in the proviso to Section 18(1) of

RERA. Accordingly, the Allottee's right under the proviso to

Section 18(1) cannot be treated as unqualified. The

absence of the words "on demand must be given due

consideration in the course of interpretation.

x.It is well settled that the function of a proviso is

generally to create an exception to what is stated in the

main enactment and further that, while interpreting a

proviso, care must be taken that it is used to remove/carve

out special cases from the general enactment and provide

for them separately. In this regard, reliance is placed on the

judgment of the Supreme Court in Shah Bhojraj Kovarji Oil

34 2005) 5 SCC 632

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Mills and Ginning Factory v. Subhashchandra Yograj Sinha

and in particular, paragraphs 9 and 10 thereof and also the

judgment of the Hon'ble Supreme Court in Sundaram Pillai

(supra) and more particularly paragraphs nos. 32 and 33 of

the same.

xi.The Supreme Court in Newtech (supra) was

considering the import of the principal enactment in

Section 18(1), which relates to the Allottee's right of refund

of money and not the proviso to Section 18(1), which

relates to the right of an allottee to continue in the project

and seek interest. Paragraph 24 of the said judgment

clearly refers to unforeseen events or stay orders of Court /

Tribunal, as being factors which are to be disregarded while

considering a claim for refund under Section 18(1). This is

because when a party has already made up its mind to seek

an exit from the Project, such party cannot be compelled to

stay put in the Project, thereby making his right to refund

an unconditional/unqualified right. In the present case, the

delays have been occasioned on account of foreseen events,

which have been set out in the Agreement for Sale

executed between the Allottee and the Promoter and which

ought to be taken into account while determining any

35 AIR 1961 SC 1596

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liability under the proviso to Section 18(1) of RERA. It may

also be noted that none of the Respondents in any of the

Appeals are desirous of a refund. They were admittedly

already offered refunds with interest vide letters addressed

by the Appellant much before they even filed any case

under RERA.

xii.It is is well settled that a judgment is an authority for

what is decided by and not anything further. It is also well

settled that a little difference in facts or additional facts

may make a lot of difference in the precedential value of a

decision. Attention of this Hon'ble Court is invited to the

judgment of the Hon'ble Supreme Court in the case of

Bhavnagar University vs. Palitana Sugar Mill (P) Ltd.

, and

in particular, paragraph 59 thereof. It is also well settled

that the judgments of the Court ought not to be read as

provisions of a statute and that the observations therein

must be read in the context in which they appear. The

reliance is placed on the decision of the Supreme Court in

the case of Haryana Financial Corporation vs. Jagdamba Oil

Mills

(paragraph 19).

xiii.It ought to be noted that what was being decided by

36 (2003) 2 SCC 111

37 (2002) 3 SCC 496

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the Hon'ble Supreme Court of India in Imperia Structures

Limited v/s Anil Patni

, more particularly Paragraphs 32

and 34 therein and in Newtech (supra) was not whether or

not the right of an allottee under Section 18 was

unconditional or not. In fact, none of the five questions

framed in Newtech (supra) deal with the aforesaid issue. It

is held by the Hon'ble Supreme Court in the case of Arun

Kumar Aggarwal v. State of M.P.

, Para 34 therein, that a

mere obiter of a Court does not have precedential value.

xiv.It has also been held by the Division bench of this

Court in the case of Neelkamal (supra) that: (i) That the

authority in genuine cases after considering the mitigating

events encountered by the promoter has the power to

mould reliefs; and (ii) That the advent of RERA does not

rewrite or displace contractual understandings as regards

possession entered into by parties prior to the promulgation

of RERA. Therefore, even the Division Bench of this Court

has laid emphasis on adjudication based on consideration

of mitigating events that come under contractual clauses of

Agreements entered into between the parties.

xv. It is important to note that Clause 2.3 of the model form

38 (2020) 10 SCC 78

39 (2014) 13 SCC 707

153

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of agreement for sale, notified under the MahaRERA Rules,

2017 itself provides that possession dates can be subject to

extension based on clauses providing extension in an

agreement for sale, thereby confirming that even the RERA

envisages situations where the developer can be allowed

extension on account of reasons outside it's control. In the

aforesaid circumstances, it is submitted that firstly,

authorities under RERA do not have the power to fix or

provide for a fresh date of possession / revise or rewrite the

date of possession under Section 18 of RERA. However, the

authorities under RERA are bound, by law, to adjudicate

and determine the date of possession in the context of

exclusion / extensions envisaged in the Contract as well as

those arising out of force majeure events, contractual or

legal, especially those well within the allottee's knowledge,

while adjudicating liability under Section 18 of RERA.

SUBMISSIONS OF THE RESPONDENTS CONCERNING THE FIFTH

AND SIXTH SUBSTANTIAL OF LAW:

104. The learned Counsel appearing for the Respondents

submitted as follows:

i.The Neelkamal (supra) clearly acknowledges the

extension of time to be given to the promoter. Therefore, if

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the promoter can seek extension of time for the completion

of project, which includes the date of possession and the

authorities grants such extension then there cannot be any

hindrance to the authorities either to fix the date of

completion of project including handing over of the

possession to the allottees. It is also settled that the delay

and/or extension cannot be for indefinite period. In such

case the MahaREAT under Section 53 of RERA is competent

to grant/fix the date of completion of the project which

includes the date of possession. The Supreme Court has

decided that there has to be a reasonable time frame for

handing over of the possession. The possession should be

given in three years, irrespective of the fact that whatever

the agreement says. Therefore, the question of law calling

upon and referring to the agreement saying that force

majeure clause can keep extending the time limit for the

purpose of giving possession for unlimited period is not

maintainable at all.

ii.It is the settled position of law that RERA is retroactive

act and it is applicable to the ongoing projects where the

Occupation Certificate has not been granted, the RERA

shall be applicable and the act requires the registration of

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project. Accordingly, the subject project has been registered

also. After registration of the project, the promoter can only

be absolved from the criminal liability on the extension of

the date of possession, but the same cannot absolve the

promoter from civil liability, which includes unconditional

and unqualified interest on delayed possession.

iii.It is submitted that adjudication of claim under section

18, either for the compensation or interest on delayed

possession has to be from the date of the agreement

actually entered into between the promoter and the flat

purchaser and default is to be considered from the agreed

date of possession The RERA being retroactive act when

applies to the ongoing project, where the possession has

not been given, in such case, once the project is registered,

the possession date/ date of completion of the project is to

be given by the promoter. In that case, if any default occurs

on the part of the promoter, the authorities while

adjudicating the claim under section 18 has to refer to the

date of possession. The section 6 of RERA grants extension

of registration of the project thereby the possession date

also gets extended. The section 6 of the RERA does not give

automatic extension of the project completion rather there

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SA 251.2022.doc 29.12

is hearing to take place for the extension of project

including the date/time line for giving possession.

Therefore, there is no hindrance in fixing the date of

possession by the Authorities while adjudicating the claim

under section 18 of RERA.

iv.It is further submitted that, in the matter of Pioneer

urban land and infrastructure Ltd v. union of India

, the

Supreme Court has stated that the allottee of the flats are

financial creditors and the money advanced by the allottee

to real estate promoter is to be considered as a financial

debt. The para 23 of the aforesaid judgment clearly

observes that RERA being retroactive act, the registration of

the project is only granted by the authority when it is

satisfied that the promoter is a bona fide promoter who is

likely to perform his part of the bargain satisfactory.

Registration of project ensures only for a certain period and

can only be extended due to force majeure or events for a

maximum period of one year by the authority on being

satisfied that such events have in fact taken place, which

clearly shows that the authority can extend the period of

the project that includes possession. In the present case,

after ascertainment of the fact of the Force Majeure clause

40 (2019) 8 SCC 416

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SA 251.2022.doc 29.12

claimed by the promoter the MahaREAT was kind enough

to extend the date of completion of project which includes

the date possession after considering their force majeure

claims. Therefore, interest on delayed possession was

awarded from 1 February 2014 and accordingly the learned

MahaREAT ordered the timeline for the completion of the

construction only on the inquiry from the learned Counsel,

when the learned Counsel informed the percentage of

construction completed on that date. In that case it may be

fairly concluded that the question of law as framed no. 1 &

2 hereinabove may be fairly deemed as redundant and

infructuous.

v.In the matter of Neelkamal (supra), the para 128 of

the aforesaid judgment clearly suggest that the delay in

handing over the possession would be counted from the

date, mentioned in the agreement for sale, entered into by

the promoter and the flat purchasers. Which further

suggest that while adjudicating claim under section 18, the

delay while handing over the possession and interest for

the same shall be counted from the date of agreed date of

possession mentioned in the agreement. Under the

provision of RERA, the promoter is given a facility to revise

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the date of the completion of project and declare the same.

The extension for the completion of project or date of

possession, facility is already given to the promoter under

RERA. If the promoter has been granted liberty to revise

the date of completion of project that does not mean that

RERA contemplates to rewrite the contract between the flat

purchasers and promoter. The RERA gives opportunity to

the promoter to extend the date of the completion of

project and revise the date of the possession date. Hence,

the same may be also exercised validly by the authorities

under the law.

vi.In the matter of Pioneer Urban Land Infrastructure

Limited v. Govinda Raghawan

the respondents rely upon

paragraph nos 6 to 6.8 and paragraph no.7, which clearly

shows the importance of the delay in possession of the flat

and thereafter it has further discussed in para no.6.1 that a

person cannot be made to wait indefinitely for the

possession of the flat allotted to him. It has been further

recorded in paragraph no.6.3 of the aforesaid judgment

that if the promoters are writing, only one-sided

agreement, then the same cannot be relied upon and

cannot be enforced. Therefore, the agreement cannot be

41 (2019) 5 SCC 725

159

SA 251.2022.doc 29.12

one-sided, which can be required to be enforced under any

law for the time being in force. The para 6.4 and 6.5 of the

judgment discusses purposely that how the one-sided

agreement has been made in the subject case, and Supreme

Court has taken a view that one sided agreement cannot

prevail upon. Supreme Court was pleased to further specify

about the Constitutional guarantees to all person, promises

equality before the law and equal protection of laws. The

same principle applies to the equality of bargaining power

irrespective of economic strength of the contracting parties.

It will also apply to a situation in which weaker party is in a

position to obtain goods, services or means legally, upon

the terms imposed by the stronger party. So, in the given

circumstances, the one-sided agreement or dominating

agreement cannot be accepted, cannot be relied upon by

the court of law.

vii.The learned MahaREAT in first Appeal no. 52949 of

2021, in the matter of Vinay Agrawal v. Amrita Chakraborty

which has persuasive value has discussed in detail about

the multiple issues on the basis of the various judgments of

Hon'ble Supreme Court and this Court, which are vital to

be mentioned here under. The para 14 of the judgment says

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that respondents have absolute right to claim interest as

prescribed under section 18 of the act for delaying delivery

of possession of the subject flat. The para of 16 the

aforesaid judgment states that the extension of registration

granted by MahaRERA in the light of para No. 119, 256 of

the judgment of this Court in the case of Neelkamal (supra)

clarify and does not contemplate rewriting of contract

between the purchaser and the promoter. Para 256 of the

judgment further clarify that by giving opportunity to the

promoter to prescribe fresh timeline under section 4(2)(1)

sale. Para 17, further mentions about the delivery date on

MahaRERA website, which is revised without consent of the

allottee. Therefore, revised project registration/ completion

date mentioned on the website cannot be accepted as

agreed date of delivery of possession as per Section 18 of

the act. It further concludes that, party cannot take

advantage of its own wrong. Para 19 of the aforesaid

judgment further clarify about the applicability of Act.

viii.The direction was passed by the Hon'ble MahaREAT

for completing the construction within the stipulated

period, on the basis of the fact that Respondent's (appellant

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herein) buildings were ready and constructed upto 80%

and 90% in year 2018. Because in the same layout when

the booking was taken in the year 2006-2007, plan was to

construct 490 flats only but now the plan is to construct

1003 flats in the same layout. Therefore, the entire

objective of the appellant is to remove the flat

purchasers/respondents from the aforesaid project at any

cost by creating the adverse circumstances.

ix.It is respectfully submitted that both questions stand

concluded in favour of the Respondents. The settled legal

position, as affirmed in Imperia Structures Ltd. v. Anil

Patni

, categorically holds that the promoter cannot

indefinitely postpone possession by relying upon force

majeure clauses or contractual stipulations. The Supreme

Court therein recognised that allottees are entitled to seek

relief under Section 18 of the RERA, notwithstanding any

contrary clauses in the agreement.

x.In Pioneer Urban Land & Infrastructure Ltd. v.

Govinda Raghavan

, the Apex Court reiterated that flat

purchasers cannot be compelled to wait endlessly for

possession, and that one-sided clauses enabling promoters

42 (2020) 10 SCC 783

43 (2019) 5 SCC 725

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to unilaterally delay handover are unconscionable, opposed

to public policy, and unenforceable.

xi.This Court in Neelkamal (supra), upheld the

constitutionality of RERA and clarified in para 128 and

para 256 that the revised project timelines declared under

Section 4 cannot dilute the promoter's liability under the

agreement for sale. These pronouncements, read conjointly,

establish beyond cavil that the authorities under RERA

possess the jurisdiction and indeed the obligation to fix a

reasonable date of possession while adjudicating claims

under Section 18, and that the promoter cannot evade civil

liability by resorting to contractual clauses or extensions.

REASONING CONCERNING FIFTH AND SIXTH SUBSTANTIAL

QUESTIONS OF LAW:

105. For considering Substantial Question of Law Nos.5 and 6, it

is necessary to analyse Section 18 of RERA. The said Section is

reproduced herein below for ready reference:

“18.Return of amount and compensation.—(1) If the

promoter fails to complete or is unable to give possession of

an apartment, plot or building,—

(a) in accordance with the terms of the agreement for sale

or, as the case may be, duly completed by the date specified

therein; or

(b) due to discontinuance of his business as a developer on

account of suspension or revocation of the registration

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under this Act or for any other reason, he shall be liable on

demand to the allottees, in case the allottee wishes to

withdraw from the project, without prejudice to any other

remedy available, to return the amount received by him in

respect of that apartment, plot, building, as the case may

be, with interest at such rate as may be prescribed in this

behalf including compensation in the manner as provided

under this Act:

Provided that where an allottee does not intend to withdraw

from the project, he shall be paid, by the promoter, interest

for every month of delay, till the handing over of the

possession, at such rate as may be prescribed.

(2) The promoter shall compensate the allottees in case of

any loss caused to him due to defective title of the land, on

which the project is being developed or has been developed,

in the manner as provided under this Act, and the claim for

compensation under this subsection shall not be barred by

limitation provided under any law for the time being in force.

(3) If the promoter fails to discharge any other obligations

imposed on him under this Act or the rules or regulations

made thereunder or in accordance with the terms and

conditions of the agreement for sale, he shall be liable to pay

such compensation to the allottees, in the manner as provided

under this Act.

”

(Emphasis added)

106. As far as the scheme under Section 18 of RERA is

concerned, the same is discussed in paragraph Nos. 19 to 25 of the

Newtech Promoters (supra). The said paragraphs are set out herein

below :

“19

. Section 18(1) of the Act spells out the consequences if

the promoter fails to complete or is unable to give possession

of an apartment, plot or building either in terms of the

agreement for sale or to complete the project by the date

specified therein or on account of discontinuance of his

business as a developer either on account of suspension or

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revocation of the registration under the Act or for any other

reason, the allottee/homebuyer holds an unqualified right to

seek refund of the amount with interest at such rate as may

be prescribed in this behalf.

20. Section 18(2) of the Act mandates that in case, loss is

caused to allottee due to defective title of the land, on which

the project is being developed or has been developed, the

promoter shall compensate the allottee and such claim for

compensation under Section 18(2) shall not be barred by

limitation provided under any law for the time being in

force.

21. Section 18(3) of the Act states that where the promoter

fails to discharge any other obligation under the Act or the

rules or regulations framed thereunder or in accordance with

the terms and conditions of the agreement for sale, the

promoter shall be liable to pay “such compensation” to the

allottees, in the manner as prescribed under the Act.

22. If we take a conjoint reading of sub-sections (1), (2)

and (3) of Section 18 of the Act, the different contingencies

spelt out therein, (a) the allottee can either seek refund of

the amount by withdrawing from the project; (b) such

refund could be made together with interest as may be

prescribed; (c) in addition, can also claim compensation

payable under Sections 18(2) and 18(3) of the Act; (d) the

allottee has the liberty, if he does not intend to withdraw

from the project, will be required to be paid interest by the

promoter for every months' delay in handing over possession

at such rates as may be prescribed.

23. Correspondingly, Section 19 of the Act spells out “Rights

and duties of allottees”. Section 19(3) makes the allottee

entitled to claim possession of the apartment, plot or

building, as the case may be. Section 19(4) provides that if

the promoter fails to comply or being unable to give

possession of the apartment, plot or building in terms of the

agreement, it makes the allottees entitled to claim the refund

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of amount paid along with interest and compensation in the

manner prescribed under the Act.

24. Section 19(4) is almost a mirror provision to Section

18(1) of the Act. Both these provisions recognise right of an

allottee two distinct remedies viz. refund of the amount

together with interest or interest for delayed handing over of

possession and compensation.

25. The unqualified right of the allottee to seek refund

referred under Section 18(1)(a) and Section 19(4) of the Act

is not dependent on any contingencies or stipulations

thereof. It appears that the legislature has consciously

provided this right of refund on demand as an unconditional

absolute right to the allottee, if the promoter fails to give

possession of the apartment, plot or building within the time

stipulated under the terms of the agreement regardless of

unforeseen events or stay orders of the court/tribunal, which

is in either way not attributable to the allottee/homebuyer,

the promoter is under an obligation to refund the amount on

demand with interest at the rate prescribed by the State

Government including compensation in the manner provided

under the Act with the proviso that if the allottee does not

wish to withdraw from the project, he shall be entitled for

interest for the period of delay till handing over possession at

the rate prescribed.”

107.Thus the Supreme Court has held that a conjoint reading of sub-

sections (1), (2) and (3) of Section 18 of the RERA shows that

inter alia

different contingencies are spelt out therein including following :i.The allottee can either seek refund of the amount by withdrawing

from the project and in that case such a refund could be made

together with interest as may be prescribed and in addition, can

also claim compensation.

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ii.The allottee is at liberty, to continue in the project, if he does not

intend to withdraw from the project and in that case the allottee

will be required to be paid interest by the promoter for every

months’ delay in handing over possession at such rates as may be

prescribed.

108. In the matter between Vinay Shravankumar Agrawal v.

Bhushan Kashinath Pawaskar

along with connected Second Appeals

this Court has considered the scope of Section 18. The discussion in

the said decision is relevant and the same is as under.

109.The object and reasons of the said Act and the peculiar position of

allottees as explained by the Supreme Court to the effect that the buyer

borrows money to pay for a house and simultaneously plays the role of

a financer as building projects collect money upfront and this puts the

buyer in a very vulnerable position i.e. the weakest stakeholder with a

high financial exposure clearly shows that the legislative intent to use

“shall “ in Section 18 of the said Act is to make the same mandatory.

110.While interpreting Section 18 of the RERA, in Imperia Structures

Limited Vs. Anil Patni & Anr.

, the Supreme Court has held that Section

18 is unqualified right of allottee to get refund and interest at the

prescribed rate, by withdrawing from the project, if the promoter fails

44 Decision dated 24th October 2024 in Second Appeal (Stamp) No.9171 of 2023

45(2020) 10 SCC 783

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to give possession of an apartment as per dates specified in the home

buyers agreement and also entitled for compensation. It is further held

that in case home buyers does not intend to withdraw from the project

then he is entitled to and must be paid interest for every month’s delay

till the handing over of the possession. It is the absolute right of the

allottee either to continue in the project or to withdraw from the

project. The relevant discussion in the case of Imperia (supra) is in

paragraph 25, which reads as under:

“25. In terms of Section 18 of the RERA Act, if a promoter

fails to complete or is unable to give possession of an

apartment duly completed by the date specified in the

agreement, the promoter would be liable, on demand, to

return the amount received by him in respect of that

apartment if the allottee wishes to withdraw from the Project.

Such right of an allottee is specifically made “without

prejudice to any other remedy available to him”. The right so

given to the allottee is unqualified and if availed, the money

deposited by the allottee has to be refunded with interest at

such rate as may be prescribed. The proviso to Section 18(1)

contemplates a situation where the allottee does not intend to

withdraw from the Project. In that case he is entitled to and

must be paid interest for every month of delay till the handing

over of the possession. It is up to the allottee to proceed either

under Section 18(1) or under proviso to Section 18(1). The

case of Himanshu Giri came under the latter category. The

RERA Act thus definitely provides a remedy to an allottee who

wishes to withdraw from the Project or claim return on his

investment

.”

(Emphasis added)

Thus it is specifically held by the Supreme Court that the proviso

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to Section 18(1) contemplates the situation where the allottee does not

intend to withdraw from the project, however, there is delay in handing

over possession of the apartment. In that case, he is entitled to and

must be paid interest for every month’s delay till handing over the

possession and it is the entire discretion of the allottee either to

withdraw from the project and seek refund, interest and compensation

or to continue with the project and seek interest for every month’s delay

in handing over possession.

111.The scheme of RERA as well as the object and reasons of the

RERA, the scope of the relevant provisions and the decisions in Imperia

(supra) and Newtech (supra) makes it very clear that an allottee has an

unqualified right to either withdraw from the project and to seek

refund, interest and compensation and if the allottee does not intend to

withdraw from the project, in spite of delay, then the allottee has been

given unqualified right to get interest per month for delayed possession

till receipt of possession. It is clear that the same is an unqualified right

of allottee and there is no conditions attached for exercise of said right.

112.In Newtech Promoters (supra), the said para No.25 in the case of

Imperia (supra) is quoted with approval in paragraph No.78. The

relevant discussion is to be found in paragraph Nos.77 to 80 in Newtech

Promoters (supra) which reads as under :

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“77. The further submission made by the learned counsel for

the appellants is that the return of the amount adversely

impacts the promotor and such a question can be looked into

by the adjudicating officer in the better prospective. The

submission has no foundation for the reason that the

legislative intention and mandate is clear that Section 18(1)

is an indefeasible right of the allottee to get a return of the

amount on demand if the promotor is unable to hand over

possession in terms of the agreement for sale or failed to

complete the project by the date specified and the

justification which the promoter wants to tender as his

defence as to why the withdrawal of the amount under the

scheme of the Act may not be justified appears to be

insignificant and the Regulatory Authority with summary

nature of scrutiny of undisputed facts may determine the

refund of the amount which the allottee has deposited, while

seeking withdrawal from the project, with interest, that too

has been prescribed under the Act, as in the instant case, the

State of Uttar Pradesh has prescribed MCLR + 1% leaving no

discretion to the Authority and can also claim compensation

as per the procedure prescribed under Section 71(3) read

with Section 72 of the Act.

78. This Court while interpreting Section 18 of the Act, in

Imperia Structures Ltd. v. Anil Patni [Imperia Structures Ltd.

v. Anil Patni, held that Section 18 confers an unqualified

right upon an allottee to get refund of the amount deposited

with the promoter and interest at the prescribed rate, if the

promoter fails to complete or is unable to give possession of

an apartment as per the date specified in the home buyer's

agreement in para 25 held as under :

“25.In terms of Section 18 of the RERA Act, if a

promoter fails to complete or is unable to give

possession of an apartment duly completed by the

date specified in the agreement, the promoter

would be liable, on demand, to return the amount

received by him in respect of that apartment if the

allottee wishes to withdraw from the Project. Such

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right of an allottee is specifically made “without

prejudice to any other remedy available to him”.

The right so given to the allottee is unqualified and

if availed, the money deposited by the allottee has

to be refunded with interest at such rate as may be

prescribed. The proviso to Section 18(1)

contemplates a situation where the allottee does

not intend to withdraw from the Project. In that

case he is entitled to and must be paid interest for

every month of delay till the handing over of the

possession. It is up to the allottee to proceed either

under Section 18(1) or under proviso to Section

18(1). The case of Himanshu Giri came under the

latter category. The RERA Act thus definitely

provides a remedy to an allottee who wishes to

withdraw from the Project or claim return on his

investment.”

79. To safeguard the interests of the parties, on being

decided by the Regulatory Authority/adjudicating officer, it is

always subject to appeal before the Tribunal under Section

43(5) provided condition of pre-deposit being complied with

can be further challenged in appeal before the High Court

under Section 58 of the Act and, thus, the legislature has put

reasonable restriction and safeguards at all stages.

80. The further submission made by the learned counsel for

the appellants that if the allottee has defaulted the terms of

the agreement and still refund is claimed which can be

possible, to be determined by the adjudicating officer. The

submission appears to be attractive but is not supported with

legislative intent for the reason that if the allottee has made

a default either in making instalments or made any breach of

the agreement, the promoter has a right to cancel the

allotment in terms of Section 11(5) of the Act and proviso to

sub-section (5) of Section 11 enables the allottee to approach

the Regulatory Authority to question the termination or

cancellation of the agreement by the promotor and thus, the

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interest of the promoter is equally safeguarded.”

(Emphasis added)

113. In the light of above discussion about the relevant

provisions of RERA as interpreted by the Supreme Court, it is

necessary to consider the substantial questions of law.

114. As noted hereinabove, Section 18 of the RERA gives

unqualified statutory right to the allottees if there is delay in handing

over possession by the promoter and if the allottee does not intend to

withdraw from the project, he shall be paid every month’s interest for

delay in handing over possession as such rate as may be prescribed.

Thus, the statutory right has been created in favour of the allottees

i.e. flat purchasers.

115. As held in Imperia (supra) and Newtech (supra), right

given to the allottees by Section 18 is an unqualified right.

116. It is the main submission of learned Counsel appearing for

the Appellants that as in Clause No. 14 of the Agreement for Sale

executed between the Appellant and the Flat Purchasers in Second

Appeal No.260 of 2022, there is clause regarding force majeure, the

time for handing over possession stands automatically extended. For

considering the said submission, it is necessary to set out said Clause

No. 14 of Agreement of Sale, which reads as under :

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“14. On Receipt of full and final amount as payable

under this agreement by the Purchasers, the

DEVELOPERS shall give possession of the said premises

to the Purchaser/s on or before 31-12-2010. If the

Developers fails to handover the possession of the said

flat to the purchaser on the said date, the Developers

shall be liable to pay the interest @ 9% (Nine) p.a. to

the purchasers as provided under section 8 of MOF Act,

1963, until the possession of the said flat is handed over

to the purchasers. If the DEVELOPERS unable keep the

said premises ready for occupation on account of

reasons beyond its control and of its agents on aforesaid

date or the dates prescribed for the payment, the

amounts already received by it in respect of the said

premises. It is mutually agreed between the Purchaser &

Developers that if the Developer is unable to hand over

the possession of said flat on above mentioned

stipulated date for the reason beyond the control of

developers, then developers is not liable to pay any

interest as provided under the MOFA. The Developers

herein agree that they shall be liable on demand by the

Purchaser to refund to the Purchasers the amounts

already received by them in respect of the said premises.

Till the said amount is refunded by the Developers to the

Purchasers there shall be subject to prior encumbrances

if any, be charge on the said premises in question. It is

further agreed that upon refund of the said amount as

stated hereinabove, the Purchaser shall have no right,

title, interest, claim, demand or dispute of any nature

whatsoever either against the Developers or against the

said preemies in any manner whatsoever and the

developers shall be entitled to deal and dispose of the

said premises to any person or party as the Developers

may desire at their absolute discretion. Provided that the

DEVELOPERS shall be entitled to the reasonable

extension of time for keeping the said premises ready for

occupation on the aforesaid date if the completion of

buildings in which the said premises are to be situated is

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delayed on account of : -

a) Non-availability of steel, cement, other buildings

material, water or electricity supply

b) War, civil commotion, act of God;

c) Any notice, order, rule, notification of the

Government and/or other public or competent authority

court or tribunal any Quasi-judicial body or authority.

d) Delay in getting plans occupancy certificate,

completion certificate and permissions from B.M.C. &

other authorities.

e) Non-payment and/or delay in payment by the

Purchaser/s of the balance amount of the agreed

purchase price, as payable in installments on the due

dated as stated hereinabove to the DEVELOPERS.

f) Force majeure circumstances or conditions or other

the control of or unforeseen by the DEVELOPERS

including strikes or other agitation by the workers,

employees of laborers of the DEVELOPERS or other

contractors or suppliers.”

(Emphasis added)

117. At this stage only, it is required to be noted that as per

Clause No. 14, the date fixed for handing over possession is 31

December 2010, whereas the learned Appellate Tribunal has directed

payment of interest to the allottees at the rate of 10.05% per annum

effective from 1

February, 2014 till handing over actual possession.

In fact, as far as other flat purchasers are concerned the date of

handing over possession is 31

December 2008 and 31

December

2009. The said Order has not been challenged by the allottees. Thus,

the extension of time granted upto 1

February 2014 is beneficial to

the Appellants.

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118. It is required to be noted that in this case, as the

Respondents have decided to continue with the project, they have got

unqualified right to get interest in view of delayed possession. It is

required to be noted that the Agreement for Sale in case of Samira

Sultan Ali Mohammed is dated 31

December, 2007. The agreed date

of handing over possession as per Clause 14 is 31

December, 2010.

Admittedly, till 2026, possession of the flat has not been handed over.

As noted earlier one of the Respondent i.e. the Allottee has paid 100%

of the consideration and some of the Allottees i.e. Respondents have

paid between 50% to 60% of the consideration. In any case, most of

the Respondents i.e. the Allottees have paid substantial consideration

towards the purchase of flats to the Appellant- Promoter about more

than 15 years back. The Agreements are of the year 2006-07 and the

date of handing over possession is of 2008-10 and till the year 2026

the possession of the respective flats has not been handed over to the

respective Allottees. As far as the Tower C is concerned the same has

been partly constructed earlier and thereafter it has been demolished

and now it has again being constructed.

119. Thus, even after a period of almost twenty years of

execution of agreement, and after lapse of about sixteen years from

the agreed date of handing over possession, the possession has not

been handed over.

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120. The Appellants have also relied on Clause 15 of the

agreement executed with the flat purchasers, which reads as under :

“15. The Developer has already informed to the

purchaser/s and the Purchaser hereby acknowledges that

the land on which the proposed buildings are being

constructed/ developed is the subject matter of the forest

issues/disputes. The Developer has already filed a Writ

Petition No.1578 of 2006 before the Hon'ble High Court

at Bombay challenging the mutation entry inserted by

the City Survey Officer in the property card register

stating that the said land is the forest land and no

development/construction will be allowed unless NOC

from the forest department is obtained in respect of the

said land. In the said Writ Petition the Hon'ble High

Court at Bombay passed an order dated 25th July 2006

and granted injunctions to the developer as prayed in the

said Writ Petition. Thereafter, State Govt. of Maharashtra

has challenged the said order dated 25th July 2006

passed by Hon'ble High Court at Bombay by filing a

Special Leave Petition (SLP) No. 14068 of 2006 in the

Hon'ble Supreme Court of India and Hon'ble Supreme

Court of India vide its order dated 25th April, 2007

directed that no third party interests to be created on the

said land. The said Writ Petition and SLP are still

pending before the Hon'ble High Court at Bombay and

Hon'ble Supreme Court of Indla respectively for the final

hearing.

In view of the aforesaid position and pendency of the

matter, the Developer hereby expressly inform and clarify

to the Purchaser/s that the Developer will not be

liable/responsible to handover possession of the said flat

on 31.12.2010 as mentioned in clause no. 14 of this

Agreement, and due to this unavoidable circumstance,

the Developer will be entitled for automatic extension of

time for handing the possession of the flat to the

purchaser/s until Writ Petition and SLP are finalized by

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the respective Hon'ble Court. The Purchaser/s hereby

state, declare, confirm that in case of any delay after

31.12.2010 in handing over possession of the said flat

the Purchaser will not demand/ask/ insist for any

interest consideration and/or compensation of any

nature from the Developer and accordingly the

Purchaser/s hereby unconditionally and irrevocably

waive all such claim, interest, demand from the

Developer or otherwise.

”

121. In view of the above clause and earlier Clause 14, it is

necessary to set out the reasons given by the learned Appellate

Tribunal, which are to be found in paragraph Nos. 13 to 18, which

read as under :

“

13)

In Suit no.962/14 pending before Hon'ble

High Court, on February 14, 2018 Runwal were

restrained from creating third party interest in

respect of an area of 14,343.76 sq.ft. in A-1

Building. On 2

July, 2018, based on Minutes of

Order, same area was directed to be maintained and

an undertaking was given by Runwal not to transfer,

alienate, deal with, dispose of or encumber such

area of 14,306 sq.ft, in A-1 Bldg.

14) Thus, the stay or its impact would not

generate any momentum in favour of the Promoter

to take shelter and scaffolding to protract the matter

of handing over possession. The mitigating

circumstances referred by Shri Jagtiani highlighted

hereinbefore, were not of such grave quality which

has inhibited or stalled complete construction

activities of the Promoter. The Government of India

clarification in respect of Environmental Clearance

indicated in Notification dated 21

August, 2013

Paragraph 2 & 3 thereof reads as under:

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"2. And whereas the above said notification

was further amended vide notification

number S,O. 356(E), dated the 4

May,

1994, Clause (c) of sub-paragraph (III) of

paragraph (2) of the said notification

provides that -

"the clearance granted shall be

valid for a period of five years from

commencement of the construction

or operation".

3. And whereas the intent of the Central

government has been and has always been

that the validity of the environmental

clearance is five years "for” commencement

of the construction or operation and not

that the environment clearance is only for

five years "from" the commencement of

construction or operation.

This also need not be ignored.

15)Thus, the Promoter cannot be further

permitted to put a blame to the Environmental

Clearance. Even if all the constraints flashed by

Promoter are positively considered but the issue that

triggers here is there was adequate time for the

Promoter to complete the project in given schedule.

There should not be a misconception that unilateral

terms in Agreement dehors the statutory obligations

will prevail. In fact, they are contrary to the

statutory Scheme. The Preamble referred to above,

Rule 4 indicated above, provides for a revised date

of possession for an ongoing project, commensurate

with extent of balance development. As indicated

hereinbefore, Building B-2 is complete by 80% and

Building B-1 by 90%. In the situation, it is beyond

comprehension to extend time to the Promoter to

meet the dreams of flat purchases by July 2024.

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reasonableness on both the sides. The matter needs

to be looked There should be with larger picture

from a wider perspective to the benefit of both the

stakeholders. The Allottees should not be tormented

viciously.”

16) The dialogue of resolution of controversy by

providing escalation, as stated earlier has failed.

Escalation letters signed by three Allottees

(AT006000000000291, AT006000000000290 and

AT006000000000281) will not tilt the picture from

liability of the Promoter to pay interest for delayed

possession.

(17) The Allottees have stated in the light of stage of

the construction, the Promoter should be directed to

hand over possession within a period of 12 months.

However, I propose it should be 18 months. So far as

Bldg. C is concerned, the reasonable period could be

30 months. However, considering the facts as

pointed by Shri Jagtiani, and giving concession, to

strike balance between the parties, I propose to

award interest in favour of Allottees after orders in

the S.L.P. dated 30

January, 2014. The Promoter

shall release interest in favour of the Allottees /

Appellants effective from 1

February, 2014. This

will be in tune with Scheme of RERA Preamble and

Judgement in Neelkamal.

18) Shri Jagtiani has also referred to the

judgement of Hon'ble Supreme Court reported in

(2013) 12 Supreme Court Cases 776 in the matter of

Hansa V. Gandhi Versus Deep Shankar Roy and Ors.

In the said Judgement, Letter of Intent was issued in

favour of Appellant / Plaintiff therein and suit for

specific performance was filed. The Letter of Intent

provided, 'only upon payment of purchase price, the

developer and the purchaser were to enter into an

Agreement with regard to sale of flats. However, in

this context, Hon'ble Supreme Court directed that no

specific performance of one flat could be granted,

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however, allowed of Plaintiff's money with 9% per

annum. Then the Letter of Cancellation was written

by developer to the purchaser. In the instant case,

for few of the Appellants, Allotment Letters are

issued. Almost all the stipulations are briefly

identified/ except date of handing over possession.

That will not change the scenario as it should be in

consonance to the prevailing statute Maharashtra

Ownership of Flats (Regulation of the Promotion of

Construction, Sale, Management and Transfer) Act,

1963 (MOFA)' which mandates specification of date

of possession. Impact of MOFA is not taken away as

could be seen in Section 88 of RERA. Thus, non-

mention of date of possession in the Allotment

Letter will not detrimental to such Allottees.”

(Emphasis added)

122. Thus, although the date of handing over possession is from

2008-2010, the learned Appellate Tribunal, by taking into

consideration several aspects, as set out in the reasons, has specified

that payment of interest be granted to the Allottees with effect from

February, 2014. It is also required to be noted that as contended

by the Respondents, when the agreements were executed with the flat

purchasers in the year 2006-2007, the plan was to construct only 490

flats but now the plan is to construct 1003 flats in the same layout.

Thus, in fact, the delay has not adversely affected the promoter.

123. Although, it is the contention of the Appellants that the

circumstances namely pendency of High Court Petition and the SLP

are set out in the agreement and therefore, it is specifically mentioned

that there will be delay in handing over possession, it is required to be

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noted that the Appellants have accepted 100% consideration from the

Respondents in Second Appeal No. 259 of 2022, the Appellants have

accepted from about five Allottees i.e. Respondents consideration of

about 50%-60% and from about four Allottees i.e. Respondents

consideration of 36%-41% has been accepted. All these amounts were

paid about 15 years ago and till the year 2026 the possession of

respective flats has not been handed over to the flat purchasers. If it is

the case of the Appellants that construction could not be made for the

reasons which are already set out in flat purchasers’ agreement, then

the Appellant should not have accepted the huge considerations.

124. As noted herein above, what is granted by the learned

Appellate Tribunal is only interest for delayed possession. The factors

on which the Appellants have relied and which are considered by the

learned Appellate Tribunal in the Impugned Order and granting

benefit of extension of about five years and two months/ four years

and two months/ three years and two months for respective Allottees

for giving interest, are in fact the factors required to be taken into

consideration if allottee withdraws from the project and seeks

compensation. In all these Second Appeals, the Appellants have

continued with the project. As noted hereinabove, even after a delay

of more than 18/17/16 years, the allottees could not get possession.

The observations of the Supreme Court in Newtech (Supra) in

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SA 251.2022.doc 29.12

paragraph No. 12 to the effect that in India, the data shows that about

more than 77% of total assets of an average Indian household are

held in real estate and it is the single largest investment of an

individual in his lifetime, the real estate in India has a peculiar

feature, the buyer borrows money to pay for a house and

simultaneously plays the role of a financer as building projects collect

money upfront and this puts the buyer in a very vulnerable position—

the weakest stakeholder with a high financial exposure, are squarely

applicable to the present case. In the present case, the agreements

were executed with flat purchasers in the year 2006-2007 wherein the

date of handing over possession is 2008-2009-2010 and till 2026, the

flat purchasers are not handed over possession even after paying

valuable consideration.

125. Apart from the reasons given by the learned Appellate

Tribunal, as far as Clauses of the Agreement executed between the

Appellants and allottees, the same shows that one sided clauses are

incorporated. The Supreme Court in the case of Pioneer Urban Land

and Infrastructure Limited vs. Govindan Raghavan

has held in

paragraph Nos. 6.7, 6.8 and 7 as under :

“6.7. In Central Inland Water Transport Corpn. Ltd. v.

Brojo Nath Ganguly [Central Inland Water Transport Corpn.

Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156 : 1986 SCC

(L&S) 429] this Court held that: (SCC p. 216, para 89)

46 (2019) 5 SCC 725

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“89. … Our Judges are bound by their oath to

“uphold the Constitution and the laws”. The

Constitution was enacted to secure to all the citizens

of this country social and economic justice. Article 14

of the Constitution guarantees to all persons equality

before the law and the equal protection of the laws.

… This principle is that the courts will not enforce

and will, when called upon to do so, strike down an

unfair and unreasonable contract, or an unfair and

unreasonable clause in a contract, entered into

between parties who are not equal in bargaining

power. It is difficult to give an exhaustive list of all

bargains of this type. No court can visualise the

different situations which can arise in the affairs of

men. One can only attempt to give some illustrations.

For instance, the above principle will apply where the

inequality of bargaining power is the result of the

great disparity in the economic strength of the

contracting parties. It will apply where the inequality

is the result of circumstances, whether of the creation

of the parties or not. It will apply to situations in

which the weaker party is in a position in which he

can obtain goods or services or means of livelihood

only upon the terms imposed by the stronger party or

go without them. It will also apply where a man has

no choice, or rather no meaningful choice, but to give

his assent to a contract or to sign on the dotted line in

a prescribed or standard form or to accept a set of

rules as part of the contract, however unfair,

unreasonable and unconscionable a clause in that

contract or form or rules may be. This principle,

however, will not apply where the bargaining power

of the contracting parties is equal or almost equal.

This principle may not apply where both parties are

businessmen and the contract is a commercial

transaction. … These cases can neither be

enumerated nor fully illustrated. The court must

Judge each case on its own facts and circumstances.”

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SA 251.2022.doc 29.12

(emphasis supplied)

6.8.A term of a contract will not be final and binding if it is

shown that the flat purchasers had no option but to sign on

the dotted line, on a contract framed by the builder. The

contractual terms of the agreement dated 8-5-2012 are ex

facie one-sided, unfair and unreasonable. The incorporation

of such one-sided clauses in an agreement constitutes an

unfair trade practice as per Section 2(1)(r) of the Consumer

Protection Act, 1986 since it adopts unfair methods or

practices for the purpose of selling the flats by the builder.

7.In view of the above discussion, we have no hesitation

in holding that the terms of the apartment buyer's

agreement dated 8-5-2012 were wholly one-sided and

unfair to the respondent flat purchaser. The appellant

builder could not seek to bind the respondent with such

one-sided contractual terms.

”

(Emphasis added)

126. As already discussed hereinabove, in the present case, the

agreements were executed with flat purchasers in the year 2006-2007

wherein the date of handing over possession is 2008/2009/2010 and

till 2026, the flat purchasers were not handed over possession even

after paying valuable consideration and in these circumstances the

Appellants are relying on the clauses of the agreement to deny the

benefit to the Allottees of proviso to Section 18(1) of RERA of

receiving interest on the amount paid by the flat purchasers due to

delay in handing over possession. Thus, the above observations in the

case of Pioneer Urban Land and Infrastructure Limited vs. Govindan

Raghavan (supra) are squarely applicable to the present case.

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SA 251.2022.doc 29.12

127. In view of the facts and circumstances of this case, various

decisions of the Supreme Court on which the Appellants have relied

are not applicable to the present case.

128. The contentions of the Appellants regarding proviso to

Section 18(1) of RERA are also misconceived as scheme of RERA

including of Section 18 of the same has been considered by the

Supreme Court in Newtech (supra) and it has been specifically held

that allottee has unqualified right to get interest if there is delayed

possession. The contention that in Newtech (supra), the Supreme

Court was considering the prayer of the home-buyers for refund of the

investments made along with interest and therefore the said decision

will not apply to the present case as in the present case, the allottees

are continuing with the project, is a misconceived contention, as in

the Newtech (supra), the Supreme Court has considered and

interpreted the scheme of RERA. Thus, various judgments cited

regarding a little difference in facts or additional facts may make a lot

of difference in the precedential value of a decision will not apply to

the present case.

129. The reliance on the judgment of Sanvo Resorts Private

Limited (Supra) is totally misconceived. In fact, the observations of

the said judgment in paragraph Nos. 21 clearly supports the case of

the Respondents. The said paragraph No. 21 is as under :

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SA 251.2022.doc 29.12

“21. In this context, the Supreme Court in the case of

Newtech Promoters and Developers Pvt. Ltd.(supra) in

paragraphs 22 and 25 has expressly observed that the

allottee has an unqualified right to claim interest under

Section 18(1) of the RERA Act if the promoter fails to

discharge his obligation in accordance with the terms and

conditions of the agreement. This unqualified right is not

dependent on any contingencies or stipulations and

therefore the legislature has consciously provided this right

of refund as an unconditional absolute right to the allottee

if the promoter fails to give possession within the stipulated

time regardless of unforeseen events or stay order of the

Court which is in either way not attributable to the

allottee.”

(Emphasis added)

130. The reliance on the judgment of Neelkamal (supra) of this

Court is also misconceived as after considering the scheme of the

RERA, the Supreme Court in Newtech (supra) has held that the right

to receive interest for delayed possession as per Section 18 is

unqualified right of the allottee.

131.Thus, for the above reasons there is no substance in the Fifth and

Sixth Substantial Questions of Law.

132. The additional substantial question of law framed by order

dated 7

April, 2025 will be considered hereinafter. The said

substantial question of law is numbered as seventh and the same is

reproduced hereinbelow :

SEVENTH SUBSTANTIAL QUESTION OF LAW :

When agreement in the form of a booking form, gets

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SA 251.2022.doc 29.12

frustrated on account of force majeure as well as due to

making its performance impossible, whether such an

agreement can be considered while exercising power under

section 18 of RERA?

133. This substantial question of law is involved only in Second

Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022.

134. The submissions in Second Appeal No. 253 of 2022 were

advanced by Mr. Rajeev Chavan, learned Senior Advocate and Second

Appeal No. 257 of 2022, the same were advanced by Mr. Ditendra

Mishra, learned Advocate appearing for the Appellant. Mr. Anjani

Kumar Singh has advanced the submissions on behalf of the

Respondents.

135. The above substantial question of law has been framed as it

is the contention of the Appellants that on 18

September, 2007, and

January, 2006, respectively, allottees in these two Second Appeals

booked respective flats in “C” Wing however, due to certain

circumstances, the agreement has frustrated as understood in law and

the parties are discharged from obligations thereunder.

136. The factual aspects as set out by the Appellants in written

submissions regarding Second Appeal No. 253 of 2022 are set out

hereinbelow as according to the Appellants, the frustration of contract

has taken place due to the said factual aspects.

Sr. No. Date Event

1 18.9.2007The Respondent (Second Appeal No. 253

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SA 251.2022.doc 29.12

of 2022) submitted a booking form for

booking Flat No.1101 in 'C' Wing for a

total consideration of Rs.57,61,050/-+

applicable taxes and other charges.

2 21.9.2007 to

1.12.2008

The Respondent (Second Appeal No. 253

of 2022) paid Rs. 22,00,000/-.

3 18.10.2017 The Appellant issued a Declaration on

the registration page of the subject

project that Tower-C is unstable and is

required to be demolished.

4 29.6.2018 MCGM issued a Note Sheet insisting on

requirement of two staircases for Tower-

5 10.10.2018 Technical Report issued by Mahimtura

Consultants Pvt. Ltd, inter alia, stating

that structural elements of Tower-C are

deficient and it would be practical and

time efficient to demolish and rebuilt the

structure rather than retrofit the same

with additional requirements including

staircase.

6 19.2.2019 The Appellant furnished a Declaration

that Tower-C is required to be

demolished as it is not possible to

provide a second staircase as required

under DCPR 2034 without affecting the

structural stability of Tower-C.

7 3.4.2019 Recommendation of Mahimtura

Consultants Pvt. Ltd to demolish the

existing building, inter alia, in view of

the necessity to provide second staircase

under DCPR 2034.

812.8.2019Letter addressed by the Appellant to the

Respondent informing him that Tower-C

is required to be demolished and calling

upon him to accept revised prices

(nominal additional cost).

9 13.2.2020MCGM granted permission to demolish

Tower - C.

(Emphasis added)

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In Second Appeal No. 257 of 2022 the total consideration is

Rs.39,30,250/- whereas, the Respondent has paid on 31

December

2006 total amount of Rs.15,12,589/-. Thus, about 40% of the

consideration has been accepted by the Appellants, whereas about

39% of the consideration has been accepted by the Appellants in

Second Appeal No. 253 of 2022.

SUBMISSIONS OF THE APPELLANTS CONCERNING SEVENTH

SUBSTANTIAL QUESTION OF LAW:-

137. Mr. Rajeev Chavan, learned Senior Advocate for the

Appellant in Second Appeal No. 253 of 2022 and Mr. Ditendra Mishra,

learned Advocate in Second Appeal No. 257 of 2022 appearing for the

Appellants,

inter alia raised the following contentions :

i.It is submitted that the original allotment of Flat No.1101 and

Flat No.703 in Tower C is/stood frustrated as understood in law and

the parties are discharged from obligations thereunder. There is no

flat of the specifications and nature that was sold to the Respondents

in Appeal nos. 253 of 2022 and 257 of 2022 in existence due to the

above. The claim of the Respondents in the abovesaid appeals is hit by

Section 56 of the Indian Contract Act, 1872.

ii.It is pertinent to note that, apart from the Respondents in Appeal

No. 253 of 2022 and Appeal No. 257 of 2022, there were 42 similarly

placed buyers in Tower - C as well. The Appellant has either returned

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the monies of such buyers with interest, or shifted them to another

tower in the project on revised terms, and both such options were also

given to the aforesaid Respondents in the abovesaid appeals, but to no

avail.

iii.As submitted, on account of the Forest Land issue and other

issues, the Appellant was unable to continue and complete

construction of the subject project. In the meantime, DCPR 2034 was

enforced. Consequently, the Appellant was required to be compliant

with the provisions thereof in respect of the subject project as the

same was incomplete on the date enforcement of DCPR 2034.

iv.As is evident that the note sheet of MCGM, an additional staircase

of 2 meters was insisted upon as per DCPR 2034 in respect of Tower

C. As is also evident from the documents referred to hereinabove, it

was not possible to retrofit at second staircase on Tower-C (which was

already constructed upto 12th floor in 2005) without affecting its

structural stability. In the meanwhile, since the structure was at a

standstill since several years, it had also become dilapidated and a

threat to life and property. Consequently, the said Tower-C was

required to be demolished.

v.The contention of the Respondent that the aforesaid frustration is

self-induced as the Appellant increased the height of the structure

which led to the requirement of a second staircase. The aforesaid

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contention is false as the original Tower C was proposed to be a 22

storied structure and its height was proposed to be 80.15 meters.

DCPR 2034 requires any structure having a height of more than 70

meters to contain 2 staircases. There was no such requirement in DCR

1991. Thus, the requirement of a second staircase was based on the

original proposal of 22 floors. In any event, since the building had

become dilapidated, and the MCGM had allowed the Appellant to

demolish the same, the question of self-induced frustration does not

arise.

vi.It is well settled that if the performance of any part of the

contract becomes impossible, the contract stands frustrated, and the

parties are absolved of any further obligations or performance thereof.

In this regard, attention of this Hon'ble Court is invited to the

following decisions:-

(i) Satyabrata Ghose vs. Mugneeram Bangur and

Company

, (paragraphs 8 to 18);

(ii) Industrial Finance Corporation of India Ltd vs.

Cannanore Spinning and Weaving Mills Ltd

, (paragraphs

40 to 42);

(iii) Loop Telecom and Trading Ltd vs. Union of India

(paragraphs 56 and 57).

47 (1953) 2 SCC 437

48 (2002) 5 SCC 54

49 (2022) 6 SCC 762

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vii.It is further submitted that even paragraph 308 of the decision of

this Hon'ble Court in Neelkamal Realtors (supra) recognizes the

concept of frustration in the context of RERA.

viii. The Respondent Buyer's contentions that their consent is

required to demolish the Tower C, or to change plans of the project is

squarely contrary to the Clause 1 of the Model Agreement for Sale, as

notified under the MahaRERA Rules, 2017, which provide that where

a promoter is required to change the plans of a project due to change

of law, or directions of the authorities etc., consent of the Buyers is

not required.

ix. In the aforesaid circumstances, it is submitted that the contract

having stood frustrated, the Appellant is not liable under Section 18

of RERA and on this ground alone, the impugned Order is liable to be

set aside.

x.In addition to the above submissions, it is submitted that due to

the demolition of said Tower C, majority of the affected allottees have

accepted the reasonable price escalation and therefore it is submitted

that price escalation of Rs. 2,500/- per sq. ft. will be applied if the

Respondents in Second Appeal No. 253 of 2022 and Second Appeal

No. 257 of 2022 accept the same.

SUBMISSIONS OF THE RESPONDENTS CONCERNING SEVENTH

SUBSTANTIAL QUESTION OF LAW:-

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138. Mr. Singh, learned Counsel of the Respondents raised the

following contentions:

i. It is submitted that the award was passed on 1st November

2018, thereafter the appellant has filed these all present second

appeals. The appeals were admitted on the deposit of 30% of the

award amount. And the execution of the impugned order dated 1st

November 2018 is stayed.

ii.During the course of hearing, the appellant in the aforesaid

appeals have filed an affidavit in second appeal no. 253 of 2022,

bringing the subsequent facts on record which cannot be considered

in the second appeal because the MahaREAT is the last facts finding

court and is the court of records. In the second appeal, no additional

facts can be considered by this Hon'ble court as per the settled

position of law

iii.However, the appellant has filed an application which was

converted as an affidavit by order dated 11th March 2025 passed by

this Hon'ble Court, bringing the subsequent facts of 2019, 2020 and

2021 on record before this Hon'ble Court. In reply to the said affidavit

filed by the appellant, the respondent has also filed reply affidavit on

20th June 2025 rebutting all the manufactured, concocted and

afterthought contentions raised by the appellant before this Hon'ble

Court about the building no. C.

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iv.The fact remains that building no. C also known as tower no. 2,

originally registered under Project registration number

P51800012621 as an ongoing project and subsequently after

demolition registered as new project under Maharera project

registration number P51800032538 on 10 January 2022. Which is

valid up to 31 March 2027, it clearly shows that everything has been

done subsequent to the award dated 1st November 2018 passed and

during the pendency of the present second appeal, but the brazen

conduct of the appellant was that, the appellant never filed an

application to inform the court or in any proceeding has felt necessary

in respect of order of this Hon'ble Court, that appropriate permission

ought to have been taken. But, appellant has never deemed it

important and now, as an afterthought denying the rights, title and

interest of the respondents in the said flats. It is a matter of record,

neither in original appeal any such grounds are made, even previously

the matter was finally heard and kept for judgement, during the last

hearing before reserving for the judgement no such argument was

advanced and no such fact was brought on record. Therefore, all these

developments, as set forth are afterthought, concocted and not

maintainable in the eye of law.

v.It is submitted that, in the said building, flat no. 1101 was

allotted to Mr. Korgaonkar and flat number 703 was allotted to Mr

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Satish Shirshekhar, the constructions of the flats were completed.

Therefore, the specific consent ought to have been taken before the

demolition of the said two flats of the respondents but the brazen

conduct of appellant was that, appellant never deemed fit to seek any

consent also from the flat purchasers. The retrofitting of building no.

B1 and B2 were also C for carried out and there was an option also

for building no. retrofitting, but the same has not been done

purposely and intentionally only to avail more benefit that is from

22nd floor to 46th floor permission was obtained to consume the

entire benefits as available in the layout under DCPR of 2034. The

appellant with dishonest claim of frustration of contract are trying to

justify their dishonest conduct and now trying to deprive the

respondents from their dream home.

vi.It is submitted that the said reply affidavit dated 9

May 2025

tendered on 20th June 2025 may be read as if the same is reproduced

herein, the para no. 3 to 20 confirms that the afterthought, concocted

factual matrix mentioned in the affidavit by the appellant has not

been available before the MahaREAT on 1st November 2018. More so,

the said created and concocted facts were applied when the relevant

second appeals were sub-judice before this hon'ble court and the

building no. C has been demolished without seeking permission from

this Hon'ble court. The appellant had also failed to adhere to the

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terms of section 14 of RERA Act and without permission of the

respondents and other flat purchasers had changed the entire plan,

specification and design of the said flat and building which is not

permissible under section 14 of the RERA.

vii. It is therefore submitted that the contentions advanced on behalf

of the appellant for building No. C is manufactured, concocted and

afterthought contentions. The same is subsequently designed and

cultivated only to argue a case of frustration of contract. However,

there is no such case has been made out and neither existed at the

time when the award was passed. In view thereof, it is respectfully

submitted that the entire case of the frustration of contract and

impossibility of contract is not maintainable.

viii. The appellant has heavily relied upon for the frustration of

contract. However, on the basis of facts, there is no case made out by

the appellant for the frustration of contract or impossibility of

contract due to alleged force majeure as framed in the question of

Law no. 8, but even though the appellant has heavily relied upon, in

support of the case of frustration of contract, Satyabrata Ghose

(supra). The judgment of Satyabrata Ghose (supra) is completely

dealt with, in the judgement of the Supreme Court in the matter of

Energy Watchdog vs. Central Electricity

, regulatory commission and

others relied upon by the respondent. The aforesaid judgment has

50 (2017) 14 SCC 80

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dealt with the doctrine of frustration, Section 56 of the contract act in

detail and the circumstances when it may be applied. The respondent

refers to paragraph no. 34 to 42 at page no. 33 to 36 and para no. 47

at page no. 42. If the paragraph number 34 to 42 and 47 is to be read

and applied to the present facts of the case, then it can be clearly

concluded that in the present factual matrix, the frustration of

contract does not apply to the present case. It is submitted that, this

entire argument has been raised completely afterthought without

mentioning the same in the grounds of appeal. This issue has been

raised subsequently filed by way of an affidavit along with certain

documents which were not available on the award dated 1st

November 2018. Further, the exhibit A to the reply affidavit dated 9th

May 2025 filed by the respondents clearly shows that the proposal

was made by the architect of the appellant for demolition of the

building no. C. The provision of retrofitting was available for the said

building no. C. The provision of second staircase was also

maintainable and suggested by the Municipal Commissioner and the

same was valid as per the order of municipal Commissioner but only

to garner more benefit and double profit and consumption of

complete layout benefit under DCPR 2034, the architect of the

appellant has proposed to demolish the building instead of

retrofitting. However, the retrofitting was done in the building no. B1

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and B2 in the same layout, it is respectfully submitted that the

demolition of building was not an act of

force majeure. Rather it was

a well designed and planned proposal given by the appellant in the

given circumstances to avail heavy profit and the municipal

corporation had never enforced to demolish the said building no. C.

The appellant is taking a fraudulent, concocted and afterthought

submission only to avail the doctrine of frustration of contract, as per

section 56 of the contract act. As per the judgements relied upon,

which clearly says that escalation in price or et cetera cannot be a

reason for the frustration of contract. In the present case presuming

for a moment, if any escalation of price has taken place for any

reason, but the purpose of the contract cannot be declared frustrated,

it is submitted that the contentions of frustration of contract does not

apply to the present case at all.ix.The respondents have also relied upon 2021, SC online Bombay

12330 in the matter of Bombay Dying & manufacturing Company

Limited versus Ashok Narang and another. The para no. 7 at page

no.5, of the aforesaid judgement, the questions of law has been

framed. Total 10 questions of law have been framed which is self-

explanatory and which have also the bearing on the case of the

respondent herein. The para 21 of the aforesaid judgment deals with

the fact that no agreement is required and only the allottee can also

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be entitled to the claim on the basis of the allotment letter. The para

27 of the aforesaid judgment and page no. 16 clearly states that the

provisions of RERA do not rewrite the clause of completion or

handing over possession in the agreement for sale. It only enables the

promoter to give fresh time line, independent of the time period

stipulated in the agreement for sale entered into between him and the

flats purchasers, so that he's not visited with the consequences laid

down. In other words by giving opportunity to the promoter to

prescribe fresh time line under section 4(2) (1) (C). He is not

absolved, of the liability under the agreement for sale. The promoter

cannot see any concession from the same and the interest on delayed

possession under section 18 is to be ordered and be given in favour of

the respondents. The para 28 further continues and confirms the civil

liability of interest on delay. Para 37 of the judgement clearly states

that after due analysis of the various sections and rules about the

rights of allottees which is defined under section 2(d) of the act of

2016. Accordingly, it comes to conclusion that none of the provision

set out a requirement of formal written agreement for sale in order to

enable the allottee to enforce the rights It is submitted that the only

holder of the flat Mr. Nitin Korgaonkar shall be eligible and entitled

for the relief as made there in. The non- availability of the agreement

shall never become an hindrance in the claims to be made on behalf

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of the respondent. The para 46 of the aforesaid judgment clearly says

that the tribunal is a final fact finding authority and therefore new

facts if any brought subsequent to that and that is also without

permission and with brazen conduct and by violating the section 14 of

the act, the same cannot be accepted because the same was also not

available before the tribunal at the relevant period of time while

passing the award. In the para 48, the judgement of Fortune

infrastructure, pioneer, urban land was discussed that the flat

purchaser cannot wait for indefinite period of time for getting their

dream home and maximum time period of three years can be

reasonable time period for completion of the contract, however, in the

present matter because of no fault of the respondent, the respondent

has waited for their dream home from 2006-7 till date and the

learned tribunal has awarded the interest on delayed possession from

1st February 2014 and around seven years of mitigating

circumstances benefit has been given to the appellant, but still is

acting in a very greedy manner and since 2014 till today, after about

10 years, the appellant is acting in a dillydallying, manner. It is

submitted that on the basis of the facts the award was passed by the

learned MahaREAT, the said award is still subsisting and the same is

temporarily stayed in such case the subsequent designed conduct of

the appellant can not be allowed to avail the law of frustration of

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contract. The conduct of the appellant was foreseen, planned and

applied intentionally, hence the arguments advanced by the appellant

is frivolous.

x.As far as question of law no. 8 is concerned, the appellant has

heavily relied upon the subsequent demolition of the building no. C

after the award passed dated on 1 November 2018 and during the

pendency of second appeal on the basis of impossibility of contract

and frustration of contract. The appellant has relied upon various

judgements of High Court and Supreme Court, which are mentioned

here under. The appellant has relied upon (2002) 5 SCC 54. The

appellant has relied upon para no. 40, 42 and 43 of the aforesaid

judgment at page no. 21 and 22. However, the para 40 of the said

judgment relied upon by the appellant supports the case of the

respondent because in the last line, at para 40 at page no. 21, it

mentions about situations which would be considered as unforeseen.

However, in the present matter the supervening event, if any, have

been avoided and overcame, because from the tower of 22 floors, the

48 floors of towers has been permitted to construct, therefore no

frustration of contract can be made applicable in the present case. It is

submitted that para 40,41,32 actually supports the case of the

respondents because the retrofitting was done to building number B1,

B2 so it could have also been done for building no. C. Further it is

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surprised to note that a supervening event which has allegedly

occurred for the building C has not been occurred for building

number B1/B2,. Though the age, constructions, and layout of the said

building no. B1 & B2 are the same.

xi.Appellant has relied upon judgment in the matter of M/s Imperial

Structures Limited (supra) and another and have relied upon by

Appellants of para 33 at page no. 42 (Para 37 of (2020) 10 Supreme

Court cases 783). It is submitted that the reference to the para 33 is

completely misleading. The aforesaid para 33 talks about the rights

available to flat purchasers as per the builders buyers agreement, the

cause of action and the date of possession. Though after registration

under the RERA extension of time has been given for the possession.

The Pioneer judgement, as relied upon by the respondents is a direct

and subsequent judgement passed by Hon'ble Bombay High Court.

xii.The appellant has also relied upon the Newtech (supra), in the

aforesaid judgment, the appellant has relied upon para 9, 24, 71,72

for the purpose of contentions that the respondents in the matter of

building no. C can only be entitled to the compensation. However,

that argument does not survive in view of the judgements as relied

upon and discussion made on the frustration of contract. The flats

purchasers are entitled to their claim on the basis of allotment letter

and agreements. Hence, the contentions advanced on behalf of the

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appellant in para number 9,24, 71,72 does not apply. Instead, the said

New tech judgement supports in various ways, the case of the

respondents, the respondents also rely upon the following paragraphs

of the Newtech judgement in support of their case, para 77(in few

judgements para 78) talking about unconditional and unqualified

right to seek interest for delayed possession. The respondents also rely

upon para no. 13.

xiii. The judgment of Satyabrata Ghose (supra), has been heavily

relied upon by the appellant for the purpose of frustration of contract.

However, the aforesaid judgment of 1953 is led by judgment of 2017

that is Energy Watchdog (supra) judgment which has been dealt with

by the respondent, the same has completely covered the findings of

Satyabrata judgement. Hence this judgement is not required to be

dealt with separately.

xiv. In continuation of the same, the appellant has relied upon the

judgement of Loop Telecom (supra). The appellant has relied upon

para 57 page 51. The said para 57 is an emphasis given to the

judgment of Satyabrata Ghose (supra) as mentioned here in above

and while giving the elaboration the court has come to the conclusion

that doctrine of frustration does not only limited to the cases of

physical possibility rather to the cases of human possibility or legality

of the act agreed to be contractually done. it has already been

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discussed that none of the aforesaid factual matrix have been applied

to the present case. The supervening conditions cannot be picked up

and chosen between three building of B1, B2 and building no. C. The

building no. C was demolished by the appellant for the benefit of the

appellant and for earning more revenue by the appellant. The facts

has been manufactured and created to apply and argue the case of the

frustration of contract, which is not maintainable.

xv. The appellant has also relied upon Amar Singh (supra), at para

no. 20 page no. 11. Which talks about the contract which becomes

impossible or unlawful because of event that the promisor could not

prevent. In the present case, there was no such circumstances arose

prior to the award dated 1st November 2018 and even otherwise also,

whatever the situation arose, it was as per the proposal made by the

appellant for demolition of the building no. C for getting the better

benefits, and in any case, the situation was not impossible and

unlawful because lawful agreement was entered into and in the same

layout building no. B1 and B2 continued, retrofitted and completed,

so there was no impossibility because if impossibility would have been

there in that case, the 22 floors of tower would have not been

converted into the 48 floors of Towers in any circumstances. It is

submitted that the fact was concocted and created for the better

benefit of the appellant and it never attracts the doctrine of the

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frustration of contract.

xvi. The declaration dated 19th February 2019 shows that contract

was not impossible to perform, which is mentioned in the affidavit of

the appellant in para No. 09. It is very clearly undertaken that rights

of the flat purchasers shall be protected. Therefore, the said

undertaking clearly shows that contract was possible, and it has been

made possible to increase the floors around double in the number.

xvii. The appellant has also relied upon the decision in the

matter of M/s Man Global (supra)In the aforesaid judgment. The

appellant has relied upon para 18,19, 20,25, which talks about the

section 18 of Rera its applicability, it also discusses about the Imperia

structures judgment scope of Section 18, finding of the court about

the purpose of the act enacted to achieve the objectives. It is

submitted that the discussions as set forth in the aforesaid paragraphs

applies to the basic principles of the act and its applicability.

xviii. It is respectfully submitted that the plea of frustration of

contract advanced by the Appellants is misconceived. The doctrine of

frustration under Section 56 of the Indian Contract Act, as clarified in

Energy Watchdog v. CERC, (2017) 14 SCC 80, does not apply where

performance remains possible and only commercial expediency is

altered. The deliberate demolition of Building C to exploit DCPR 2034

benefits was a calculated business choice, not a supervening

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impossibility. Further, the Bombay High Court in Bombay Dyeing &

Mfg. Co. Ltd. v. Ashok Narang, 2021 SCC OnLine Bom 12330, has

reiterated that allottees are entitled to relief even on the basis of

allotment letters, and that subsequent unilateral changes by

promoters cannot defeat accrued rights. Therefore, Question 8 must

be answered in the negative and against the Appellant.

REASONING REGARDING SEVENTH SUBSTANTIAL QUESTION OF

LAW :-

139. As the contention is raised by the Appellants regarding

frustration of the contract and reliance is placed on Section 56 of the

Indian Contract Act, 1872, it is necessary to set out Section 56, which

is as follows :

56. Agreement to do impossible act.—An agreement

to do an act impossible in itself is void.

Contract to do an act afterwards becoming

impossible or unlawful.—A contract to do an act

which, after the contract is made, becomes

impossible, or, by reason of some event which the

promisor could not prevent, unlawful, becomes void

when the act becomes impossible or unlawful.

Compensation for loss through non-performance of

act known to be impossible or unlawful.— Where

one person has promised to do something which he

knew, or, with reasonable diligence, might have

known, and which the promisee did not know, to be

impossible or unlawful, such promisor must make

compensation to such promisee for any loss which

such promisee sustains through the non-

performance of the promise.

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140. Thus, what first part of Section 56 contemplates is that an

agreement to do an act impossible in itself is void. It is not even the

contention of the Appellants that by the agreement, what is agreed is

to do an impossible act. Therefore the said first part of Section 56 is

not relevant.

141. Second part of Section 56 contemplates that a contract to

do an act which, after the contract is made, becomes impossible, or,

by reason of some event which the promiser or could not prevent,

unlawful, becomes void when the act becomes impossible or

unlawful. It is the contention of the Appellants that as now the said

Tower C is demolished, it has become impossible to perform the

areement. Thus, it is necessary to consider whether in the facts and

circumstances, it becomes impossible for the Appellants to perform

the contract.

142. Before considering the above aspect, it is necessary to set

out relevant decisions of the Supreme Court interpreting Section 56 of

the Contract Act.

143. Mr. Chavan, learned Senior Counsel has very heavily relied

on the decision of the Supreme Court in the case of Satyabrata Ghose

(Supra) and more particularly on paragraph Nos. 9 to 11 and 21 of

the same, which read as under :

“

9. The first paragraph of the section lays down the

law in the same way as in England. It speaks of

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something which is impossible inherently or by its

very nature, and no one can obviously be directed to

perform such an act. The second paragraph

enunciates the law relating to discharge of contract

by reason of supervening impossibility or illegality of

the act agreed to be done. The wording of this

paragraph is quite general, and though the

illustrations attached to it are not at all happy, they

cannot derogate from the general words used in the

enactment. This much is clear that the word

“impossible” has not been used here in the sense of

physical or literal impossibility. The performance of

an act may not be literally impossible but it may be

impracticable and useless from the point of view of

the object and purpose which the parties had in

view; and if an untoward event or change of

circumstances totally upsets the very foundation

upon which the parties rested their bargain, it can

very well be said that the promissor finds it

impossible to do the act which he promised to do.

10. Although various theories have been

propounded by the Judges and jurists in England

regarding the juridical basis of the doctrine of

frustration, yet the essential idea upon which the

doctrine is based is that of impossibility of

performance of the contract; in fact impossibility and

frustration are often used as interchangeable

expressions. The changed circumstances, it is said,

make the performance of the contract impossible and

the parties are absolved from the further

performance of it as they did not promise to perform

an impossibility. The parties shall be excused, as Lord

Loreburn says [F.A. Tamplin Steamship Co. Ltd. v.

Anglo-Mexican Petroleum Products Co. Ltd., (1916)

2 AC 397 at p. 403 (HL)] : (AC p. 406)

“… if substantially the whole contract

becomes impossible of performance, or in

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other words impracticable, by some cause for

which neither was responsible.”

(emphasis supplied)

In Joseph Constantine Steamship Line Ltd. v. Imperial

Smelting Corpn. Ltd. [Joseph Constantine Steamship Line

Ltd. v. Imperial Smelting Corpn. Ltd., 1942 AC 154 (HL)] ,

Viscount Maugham observed that the “doctrine of

frustration is only a special case of the discharge of contract

by an impossibility of performance arising after the contract

was made”. Lord Porter agreed with this view and rested

the doctrine on the same basis. The question was

considered and discussed by a Division Bench of the

Nagpur High Court in Kesari Chand v. Governor General in

Council [Kesari Chand v. Governor General in Council, ILR

1949 Nag 718] and it was held that the doctrine of

frustration comes into play when a contract becomes

impossible of performance, after it is made, on account of

circumstances beyond the control of the parties. The

doctrine is a special case of impossibility and as such comes

under Section 56 of the Contract Act. We are in entire

agreement with this view which is fortified by a recent

pronouncement of this Court in Ganga Saran v. Firm Ram

Charan Ram Gopal [Ganga Saran v. Firm Ram Charan Ram

Gopal, 1951 SCC 1053 at p. 1059 : 1952 SCR 36 at p. 42] ,

where Fazl Ali, J., in speaking about frustration observed in

his judgment as follows : (Ganga Saran case [Ganga Saran

v. Firm Ram Charan Ram Gopal, 1951 SCC 1053 at p. 1059

: 1952 SCR 36 at p. 42] , SCC p. 1059, para 17)

“17. It seems necessary for us to emphasise that so far

as the courts in this country are concerned, they must look

primarily to the law as embodied in Sections 32 and 56 of

the Contract Act, 1872.”

We hold, therefore, that the doctrine of frustration is really

an aspect or part of the law of discharge of contract by

reason of supervening impossibility or illegality of the act

agreed to be done and hence comes within the purview of

Section 56 of the Contract Act. It would be incorrect to say

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that Section 56 of the Contract Act applies only to cases of

physical impossibility and that where this section is not

applicable, recourse can be had to the principles of English

law on the subject of frustration. It must be held also, that

to the extent that the Contract Act deals with a particular

subject, it is exhaustive upon the same and it is not

permissible to import the principles of English law dehors

these statutory provisions. The decisions of the English

courts possess only a persuasive value and may be helpful

in showing how the courts in England have decided cases

under circumstances similar to those which have come

before our courts.

11.It seems necessary, however, to clear up some

misconception which is likely to arise because of the

complexities of the English law on the subject. The law of

frustration in England developed, as is well known, under

the guise of reading implied terms into contracts. The court

implies a term or exception and treats that as part of the

contract. In Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3

B&S 826 : 122 ER 309] , Blackburn, J. first formulated the

doctrine in its modern form. The court there was dealing

with a case where a music hall in which one of the

contracting parties had agreed to give concerts on certain

specified days was accidentally burnt by fire. It was held

that such a contract must be regarded “as subject to an

implied condition that the parties shall be excused, in case,

before breach, performance becomes impossible from

perishing of the thing without default of the contractor”.

Again in Robinson v. Davison [Robinson v. Davison, (1871)

LR 6 Exch 269] there was a contract between the plaintiff

and the defendant's wife (as the agent of her husband) that

she should play the piano at a concert to be given by the

plaintiff on a specified day. On the day in question she was

unable to perform through illness. The contract did not

contain any term as to what was to be done in case of her

being too ill to perform. In an action against the defendant

for breach of contract, it was held that the wife's illness and

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the consequent incapacity excused her and that the

contract was in its nature not absolute but conditional upon

her being well enough to perform. Bramwell, B. pointed

out in course of his judgment that in holding that the

illness of the defendant incapacitated her from performing

the agreement the court was not really engrafting a new

term upon an express contract. It was not that the

obligation was absolute in the original agreement and a

new condition was subsequently added to it; the whole

question was whether the original contract was absolute or

conditional and having regard to the terms of the bargain,

it must be held to be conditional.

21.It is well-settled and not disputed before us that if and

when there is frustration the dissolution of the contract

occurs automatically. It does not depend, as does recission

of a contract on the ground of repudiation or breach, or on

the choice or election of either party. It depends on the

effect of what has actually happened on the possibility of

performing the contract [Denny, Mott & Dickson Ltd. v.

James B. Fraser & Co. Ltd., 1944 AC 265 at p. 275 (HL)] .

What happens generally in such cases and has happened

here is that one party claims that the contract has been

frustrated while the other party denies it. The issue has got

to be decided by the court “ex post facto, on the actual

circumstances of the case.

”

(Emphasis added) 144. Mr. Singh, learned Counsel appearing for the Appellants

relied on the decision of the Supreme Court in the case of Energy

Watchdog (Supra) and more particularly on paragraph Nos. 34 to 42

and 47, which read as under :

“34. “Force majeure” is governed by the Contract Act,

1872. Insofar as it is relatable to an express or implied

clause in a contract, such as the PPAs before us, it is

governed by Chapter III dealing with the contingent

contracts, and more particularly, Section 32 thereof.

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Insofar as a force majeure event occurs dehors the

contract, it is dealt with by a rule of positive law under

Section 56 of the Contract Act. Sections 32 and 56 are set

out herein:

“32. Enforcement of contracts contingent on an

event happening.—Contingent contracts to do or

not to do anything if an uncertain future event

happens, cannot be enforced by law unless and

until that event has happened.

If the event becomes impossible, such contracts

become void.

***

56. Agreement to do impossible act.—An

agreement to do an act impossible in itself is void.

Contract to do act afterwards becoming impossible or

unlawful.—A contract to do an act which, after the

contract is made, becomes impossible, or, by reason of

some event which the promisor could not prevent,

unlawful, becomes void when the act becomes impossible

or unlawful.

Compensation for loss through non-performance of act

known to be impossible or unlawful.—Where one person

has promised to do something which he knew, or, with

reasonable diligence, might have known, and which the

promisee did not know, to be impossible or unlawful, such

promisor must make compensation to such promisee for

any loss which such promisee sustains through the non-

performance of the promise.”

35. Prior to the decision in Taylor v. Caldwell [Taylor v.

Caldwell, (1863) 3 B&S 826 : 122 ER 309 : (1861-73) All

ER Rep 24] , the law in England was extremely rigid. A

contract had to be performed, notwithstanding the fact

that it had become impossible of performance, owing to

some unforeseen event, after it was made, which was not

the fault of either of the parties to the contract. This

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rigidity of the Common law in which the absolute sanctity

of contract was upheld was loosened somewhat by the

decision in Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3

B&S 826 : 122 ER 309 : (1861-73) All ER Rep 24] in

which it was held that if some unforeseen event occurs

during the performance of a contract which makes it

impossible of performance, in the sense that the

fundamental basis of the contract goes, it need not be

further performed, as insisting upon such performance

would be unjust.

36. The law in India has been laid down in the seminal

decision of Satyabrata Ghose v. Mugneeram Bangur & Co.

[Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR

310 : (1953) 2 SCC 437 : AIR 1954 SC 44]. The second

paragraph of Section 56 has been adverted to, and it was

stated that this is exhaustive of the law as it stands in

India. What was held was that the word “impossible” has

not been used in the section in the sense of physical or

literal impossibility. The performance of an act may not be

literally impossible but it may be impracticable and useless

from the point of view of the object and purpose of the

parties. If an untoward event or change of circumstance

totally upsets the very foundation upon which the parties

entered their agreement, it can be said that the promisor

finds it impossible to do the act which he had promised to

do. It was further held that where the Court finds that the

contract itself either impliedly or expressly contains a

term, according to which performance would stand

discharged under certain circumstances, the dissolution of

the contract would take place under the terms of the

contract itself and such cases would be dealt with under

Section 32 of the Act. If, however, frustration is to take

place dehors the contract, it will be governed by Section

56.

37. In Alopi Parshad & Sons Ltd. v. Union of India [Alopi

Parshad & Sons Ltd. v. Union of India, (1960) 2 SCR 793 :

AIR 1960 SC 588] , this Court, after setting out Section 56

of the Contract Act, held that the Act does not enable a

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party to a contract to ignore the express covenants thereof

and to claim payment of consideration, for performance of

the contract at rates different from the stipulated rates, on

a vague plea of equity. Parties to an executable contract

are often faced, in the course of carrying it out, with a

turn of events which they did not at all anticipate, for

example, a wholly abnormal rise or fall in prices which is

an unexpected obstacle to execution. This does not in

itself get rid of the bargain they have made. It is only

when a consideration of the terms of the contract, in the

light of the circumstances existing when it was made,

showed that they never agreed to be bound in a

fundamentally different situation which had unexpectedly

emerged, that the contract ceases to bind. It was further

held that the performance of a contract is never

discharged merely because it may become onerous to one

of the parties.

38. Similarly, in Naihati Jute Mills Ltd. v. Khyaliram

Jagannath [Naihati Jute Mills Ltd. v. Khyaliram Jagannath,

(1968) 1 SCR 821 : AIR 1968 SC 522] , this Court went

into the English law on frustration in some detail, and

then cited the celebrated judgment of Satyabrata Ghose v.

Mugneeram Bangur & Co. [Satyabrata Ghose v.

Mugneeram Bangur & Co., 1954 SCR 310 : (1953) 2 SCC

437 : AIR 1954 SC 44]. Ultimately, this Court concluded

that a contract is not frustrated merely because the

circumstances in which it was made are altered. The

courts have no general power to absolve a party from the

performance of its part of the contract merely because its

performance has become onerous on account of an

unforeseen turn of events.

39. It has also been held that applying the doctrine of

frustration must always be within narrow limits. In an

instructive English judgment, namely, Tsakiroglou & Co.

Ltd. v. Noblee Thorl GmbH [Tsakiroglou & Co. Ltd. v.

Noblee Thorl GmbH, 1962 AC 93 : (1961) 2 WLR 633 :

(1961) 2 All ER 179 (HL)], despite the closure of the Suez

Canal, and despite the fact that the customary route for

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shipping the goods was only through the Suez Canal, it

was held that the contract of sale of groundnuts in that

case was not frustrated, even though it would have to be

performed by an alternative mode of performance which

was much more expensive, namely, that the ship would

now have to go around the Cape of Good Hope, which is

three times the distance from Hamburg to Port Sudan. The

freight for such journey was also double. Despite this, the

House of Lords held that even though the contract had

become more onerous to perform, it was not

fundamentally altered. Where performance is otherwise

possible, it is clear that a mere rise in freight price would

not allow one of the parties to say that the contract was

discharged by impossibility of performance.

40. This view of the law has been echoed in Chitty on

Contracts, 31st Edn. In Para 14-151 a rise in cost or

expense has been stated not to frustrate a contract.

Similarly, in Treitel on Frustration and Force Majeure, 3rd

Edn., the learned author has opined, at Para 12-034, that

the cases provide many illustrations of the principle that a

force majeure clause will not normally be construed to

apply where the contract provides for an alternative mode

of performance. It is clear that a more onerous method of

performance by itself would not amount to a frustrating

event. The same learned author also states that a mere rise

in price rendering the contract more expensive to perform

does not constitute frustration. (See Para 15-158.)

41. Indeed, in England, in the celebrated Sea Angel case

[Edwinton Commercial Corpn. v. Tsavliris Russ

(Worldwide Salvage & Towage) Ltd. (The Sea Angel),

2007 EWCA Civ 547 : (2007) 2 Lloyd's Rep 517 (CA)] ,

the modern approach to frustration is well put, and the

same reads as under:

“111. In my judgment, the application of the

doctrine of frustration requires a multi-factorial

approach. Among the factors which have to be

considered are the terms of the contract itself, its

matrix or context, the parties' knowledge,

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expectations, assumptions and contemplations, in

particular as to risk, as at the time of the contract,

at any rate so far as these can be ascribed

mutually and objectively, and then the nature of

the supervening event, and the parties' reasonable

and objectively ascertainable calculations as to

the possibilities of future performance in the new

circumstances. Since the subject-matter of the

doctrine of frustration is contract, and contracts

are about the allocation of risk, and since the

allocation and assumption of risk is not simply a

matter of express or implied provision but may

also depend on less easily defined matters such as

“the contemplation of the parties”, the application

of the doctrine can often be a difficult one. In

such circumstances, the test of “radically

different” is important: it tells us that the doctrine

is not to be lightly invoked; that mere incidence of

expense or delay or onerousness is not sufficient;

and that there has to be as it were a break in

identity between the contract as provided for and

contemplated and its performance in the new

circumstances.”

(emphasis in original)

42. It is clear from the above that the doctrine of

frustration cannot apply to these cases as the fundamental

basis of the PPAs remains unaltered. Nowhere do the PPAs

state that coal is to be procured only from Indonesia at a

particular price. In fact, it is clear on a reading of the PPA

as a whole that the price payable for the supply of coal is

entirely for the person who sets up the power plant to

bear. The fact that the fuel supply agreement has to be

appended to the PPA is only to indicate that the raw

material for the working of the plant is there and is in

order. It is clear that an unexpected rise in the price of coal

will not absolve the generating companies from

performing their part of the contract for the very good

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reason that when they submitted their bids, this was a risk

they knowingly took. We are of the view that the mere fact

that the bid may be non-escalable does not mean that the

respondents are precluded from raising the plea of

frustration, if otherwise it is available in law and can be

pleaded by them. But the fact that a non-escalable tariff

has been paid for, for example, in the Adani case, is a

factor which may be taken into account only to show that

the risk of supplying electricity at the tariff indicated was

upon the generating company.

….

47. We are, therefore, of the view that neither was the

fundamental basis of the contract dislodged nor was any

frustrating event, except for a rise in the price of coal,

excluded by Clause 12.4, pointed out. Alternative modes

of performance were available, albeit at a higher price.

This does not lead to the contract, as a whole, being

frustrated. Consequently, we are of the view that neither

Clause 12.3 nor 12.7, referable to Section 32 of the

Contract Act, will apply so as to enable the grant of

compensatory tariff to the respondents. Dr Singhvi,

however, argued that even if Clause 12 is held

inapplicable, the law laid down on frustration under

Section 56 will apply so as to give the respondents the

necessary relief on the ground of force majeure. Having

once held that Clause 12.4 applies as a result of which rise

in the price of fuel cannot be regarded as a force majeure

event contractually, it is difficult to appreciate a

submission that in the alternative Section 56 will apply. As

has been held in particular, in Satyabrata Ghose case

[Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR

310 : (1953) 2 SCC 437 : AIR 1954 SC 44], when a

contract contains a force majeure clause which on

construction by the Court is held attracted to the facts of

the case, Section 56 can have no application. On this short

ground, this alternative submission stands disposed of.

”

(Emphasis added)

145. An analysis of Section 56 of Indian Contract Act as also the

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above decisions of the Supreme Court in the cases of Satyabrata

Ghose (supra) and Energy Watchdog (supra) lay down following

principles :

i.Something which is impossible inherently or by its very

nature, and no one can obviously be directed to perform

such an act.

ii.The second paragraph enunciates the law relating to

discharge of contract by reason of supervening impossibility

or illegality of the act agreed to be done.

iii.This much is clear that the word “impossible” has not

been used here in the sense of physical or literal

impossibility. The performance of an act may not be

literally impossible but it may be impracticable and useless

from the point of view of the object and purpose which the

parties had in view; and if an untoward event or change of

circumstances totally upsets the very foundation upon

which the parties rested their bargain, it can very well be

said that the promissor finds it impossible to do the act

which he promised to do.

iv.Essential idea upon which the doctrine is based is that

of impossibility of performance of the contract; in fact

impossibility and frustration are often used as

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interchangeable expressions. The changed circumstances, it

is said, make the performance of the contract impossible

and the parties are absolved from the further performance

of it as they did not promise to perform an impossibility.

v.The doctrine of frustration comes into play when a

contract becomes impossible of performance, after it is

made, on account of circumstances beyond the control of

the parties. The doctrine is a special case of impossibility

and as such comes under Section 56 of the Contract Act.

vi.The Act does not enable a party to a contract to ignore

the express covenants thereof and to claim payment of

consideration, for performance of the contract at rates

different from the stipulated rates, on a vague plea of

equity. Parties to an executable contract are often faced, in

the course of carrying it out, with a turn of events which

they did not at all anticipate, for example, a wholly

abnormal rise or fall in prices which is an unexpected

obstacle to execution. This does not in itself get rid of the

bargain they have made. It is only when a consideration of

the terms of the contract, in the light of the circumstances

existing when it was made, showed that they never agreed

to be bound in a fundamentally different situation which

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had unexpectedly emerged, that the contract ceases to

bind.

vii.The performance of a contract is never discharged

merely because it may become onerous to one of the

parties.

viii.Ultimately, the Supreme Court concluded that a

contract is not frustrated merely because the

circumstances in which it was made are altered. The

courts have no general power to absolve a party from the

performance of its part of the contract merely because its

performance has become onerous on account of an

unforeseen turn of events.

ix.The contract had become more onerous to perform, it

was not fundamentally altered. Where performance is

otherwise possible, it is clear that a mere rise in freight

price would not allow one of the parties to say that the

contract was discharged by impossibility of performance.

x.A force majeure clause will not normally be construed

to apply where the contract provides for an alternative

mode of performance. It is clear that a more onerous

method of performance by itself would not amount to a

frustrating event.

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xi.The application of the doctrine of frustration requires

a multi-factorial approach. Among the factors which have

to be considered are the terms of the contract itself, its

matrix or context, the parties' knowledge, expectations,

assumptions and contemplations, in particular as to risk,

as at the time of the contract, at any rate so far as these

can be ascribed mutually and objectively, and then the

nature of the supervening event, and the parties'

reasonable and objectively ascertainable calculations as to

the possibilities of future performance in the new

circumstances.

xii.The doctrine is not to be lightly invoked; that mere

incidence of expense or delay or onerousness is not

sufficient; and that there has to be as it were a break in

identity between the contract as provided for and

contemplated and its performance in the new

circumstances.

146. Thus, it is clear that the doctrine of frustration comes into

play when a contract becomes impossible of performance, after it is

made, on account of circumstances beyond the control of the parties.

The doctrine is a special case of impossibility and as such comes

under Section 56 of the Contract Act. However, the performance of a

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contract is never discharged merely because it may become onerous

to one of the parties. It is settled legal position that this doctrine is not

to be lightly invoked; that mere incidence of expense or delay or

onerousness is not sufficient; and that there has to be as it were a

break in identity between the contract as provided for and

contemplated and its performance in the new circumstances.

147. Thus, on the touchstone of above principles it is necessary

to consider the present case.

148. As noted herein above the Appellants have relied on

opinion dated 3

April 2019 of Mahimtura Consultants Private

Limited. The said opinion

inter alia states that the measures to be

employed for retrofitting will require 10 to 12 months and the

balance building can only be constructed after retrofitting. It is further

stated that the work of retrofitting will have to be undertaken by a

specialized contractor and will require prohibitive costs. These

reasons

inter alia set out in said opinion dated 3

April 2019 clearly

shows that case for invocation of Section 56 of the Contract Act is not

made out. As per the settled legal position the performance of a

contract is never discharged merely because it may become onerous

to one of the parties and that this doctrine is not to be lightly invoked;

that mere incidence of expense or delay or onerousness is not

sufficient; and that there has to be as it were a break in identity

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between the contract as provided for and contemplated and its

performance in the new circumstances. It is required to be noted that

the other two towers namely B1 and B2 in the same layout were

constructed after retrofitting. The said towers are also situated in

same circumstances. It is surprising and shocking that the Appellants

has not invoked the doctrine of frustration with respect to those

towers. In fact, there is substance in the contention raised on behalf of

the Respondents that the said doctrine of frustration is invoked to

garner more benefit and double profit and consumption of complete

layout benefit under DCPR, 2034. It is significant to note that earlier

only 22 floors were to be constructed and now the permission has

been granted to construct 48 floors. Thus, it is very clear that the

Appellant has invoked this clause of frustration just to deprive the

Respondents in Second Appeal No. 253 of 2022 and Second Appeal

No.257 of 2022, their statutory rights and to garner more benefit.

149. It is further significant to note that the Appellants have

obtained permission for demolition of tower C and construction of a

new tower of 48 floors from Municipal Corporation of Greater

Mumbai by giving a declaration dated 19

February 2019, inter alia

stating as follows:

“9. We further state and declare that the rights of the

existing/ current purchasers of Apartments/ flats/

premises in Building No.C will be safeguarded.”

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150. It is shocking to note that the Appellants obtained the

permission from MCGM for demolition of Building No. C by playing

fraud as false undertaking has been given stating that the Appellants

would protect and safeguard the rights of the flat purchasers in

Building No.C and after getting approval for construction of 48 floors

and after demolishing Building No.C now the Appellants have

malafidely invoked doctrine of frustration. Thus, these two Second

Appeals namely Second Appeal No. 253 of 2022 and Second Appeal

No. 257 of 2022, are required to be dismissed with exemplary costs of

Rs.1,00,000/- each to be paid by the Appellants to the respective

Respondents.

151. Thus, for the above reasons there is no substance in the

Seventh Substantial Question of Law.

152. Hereinafter, the substantial question of law no.7 framed by

order dated 24

December 2024 shall be taken up for consideration.

The same is now numbered as the Eighth substantial question of law.

EIGHTH SUBSTANTIAL QUESTION OF LAW :

Whether the impugned Judgment and Order is perverse and

unreasoned?

153. At the outset it is required to be noted that while making

oral submissions although the same were advanced in great detail

with respect to all other substantial questions of law, neither of the

parties have advanced any submissions with respect to this substantial

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question of law. However, in the written arguments certain

submissions with respect to this substantial question of law are

incorporated.

SUBMISSIONS OF THE APPELLANTS CONCERNING EIGHTH

SUBSTANTIAL QUESTION OF LAW:-

154. In the written submissions of the Appellants following

contentions are raised:

i.It is submitted that the impugned Order is unreasoned. It is

evident from the record that elaborate arguments and submissions

were made by the Appellant before the Hon'ble Revenue Tribunal. It is

the duty of every quasi -judicial forum to pass a speaking order which

entails recording all submissions of the Parties, framing questions for

determination and delivering the final decision after dealing with the

all the arguments and submissions made before it.

ii.A perusal of the Impugned Order, including paragraphs 13 to 17

thereof shows that the Hon'ble Revenue Tribunal has not dealt with

all of the arguments of the Appellant, and further, given no reasons

whatsoever in support of its conclusions. This makes the Impugned

Order non – speaking.

iii.Every litigant has the right to know why it's submissions and

arguments before the Court have been rejected so that it can lay the

foundation of challenge to such order. However, from the Impugned

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Order, it can be seen that all of the arguments and submissions of the

Appellant have not been dealt with by the Revenue Tribunal.

iv.It is well settled that giving of reasons in support of conclusions

and findings is an indispensable part of compliance with the

principles of natural justice.

v.The Appellants have relied on following decisions of the Supreme

Court in support of above contentions:

1. Oryx Fisheries Private Limited vs. Union of India

2. Kranti Associates (P) Ltd. vs. Masood Ahmed Khan

SUBMISSIONS OF THE RESPONDENTS CONCERNING EIGHTH

SUBSTANTIAL QUESTION OF LAW:-

155. In the written submissions of the Respondents following

contentions are raised:

i.It is respectfully submitted that the impugned oral judgment

dated 01/11/2018 passed by the MahaREAT was well reasoned, based

on a complete appreciation of facts and law, and requires no

interference. The Appellants' failure to deliver possession within the

stipulated time, despite repeated assurances, letters, and financial

demands between 2005-2008, constitutes a clear breach of statutory

duties under RERA. Even after the expiry of the extended 18 months

granted under the order, possession has not been handed over, and

51 (2010) 13 SCC 427

52 (2010) 9 SCC 496

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the allottees continue to suffer grave hardship.

ii.Under Section 18(1) and its proviso, the Respondents, who chose

not to withdraw from the project, are unconditionally entitled to

interest for every month of delay until possession is actually delivered.

The Hon'ble Supreme Court in Imperia Structures Ltd. (supra) and

Newtech (supra) has affirmed that such right is absolute and not

contingent upon contractual clauses or force majeure claims. The

Appellants' reliance on environmental litigation or subsequent

demolition of Building C is misconceived, as performance remained

legally and physically possible, and their conduct in altering

sanctioned plans, seeking escalation charges, and demolishing

structures to exploit DCPR 2034 benefits demonstrates mala fides

rather than impossibility.

iii.In view of the aforesaid settled legal position, statutory mandate,

and binding judicial precedents, it is humbly prayed that the question

of law No.7 be decided in favour of the respondents holding that the

impugned judgment and order is effective, valid, subsisting and

binding, and cannot be interfered with and the second appeals filed

by the appellant be dismissed forthwith exemplary cost, and the

Respondents be granted the reliefs awarded by the MahaREAT,

together with continuing interest till actual possession is delivered.

iv.The Respondents have also raised various contentions regarding

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other substantial questions of law while dealing with this substantial

question of law. The same are not relevant.

REASONING CONCERNING EIGHTH SUBSTANTIAL

QUESTION OF LAW:-

156. As already noted herein above, no oral submissions were

raised with respect to this substantial question of law. In fact the

written submissions of the Appellants except general contentions, do

not make any reference to the particulars i.e. the point which is

argued and not considered by the learned designated Appellate

Tribunal.

157. As already noted herein above, the learned designated

Appellate Tribunal has passed the impugned order by giving detailed

reasons. In fact, while considering various aspects as set out in

paragraph No.13 to 17, which are already set out in earlier part of

this judgment, the learned designated Appellate Tribunal has granted

interest to the allottees w.e.f. 1

February 2014, although the

possession date as per the agreements executed with allottees were of

the year 2008-2010.

158. It is correct that Supreme Court in various decisions has

held that giving of reasons in support of conclusions and findings is

an indispensable part of compliance with the principles of natural

justice. However, in this particular case, detailed reasons are given by

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the learned designated Appellate Tribunal. Apart from that, no

particulars are pointed out to this Court with respect to this aspect.

159. Thus, there is no substance in the contentions raised by the

Appellants.

160. Thus, for the above reasons there is no substance in the

Eighth Substantial Question of Law.

FINAL ORDER:

161. For the above reasons, there is no substance in any of the

Substantial Questions of Law raised by the Appellants.

162. Accordingly, all the Second Appeals are dismissed with

costs.

163. Second Appeal No.251 of 2022, Second Appeal No.254 of

2022, Second Appeal No.255 of 2022, Second Appeal No.256 of

2022, Second Appeal No.258 of 2022, Second Appeal No.259 of

2022, Second Appeal No.260 of 2022 and Second Appeal No.261 of

2022 are dismissed with costs of Rs.10,000/- in each of the Second

Appeals to be paid to the respective Respondents, within a period of

four weeks from today.

164. Second Appeal No. 253 of 2022 and Second Appeal No.

257 of 2022 are dismissed with a cost of Rs.1,00,000/-, to be paid to

the respective Respondents, within a period of four weeks from today.

165. In view of the dismissal of the Second Appeals, nothing

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survives in the Civil Applications/Interim Applications and the same

are also disposed of.

166. After pronouncement of this judgment, Mr. Kamat, learned

Senior Advocate seeks stay of this judgment and order and

continuation of the interim order dated 4

December 2018 which was

operating in these Second Appeals. However, the position on record

shows that the Agreement with respective Appellants, i.e., flat

purchasers are of the year 2006-2007. After a period of 20 years,

possession is not handed over to the flat purchasers. As far as Second

Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022 are

concerned, this Court, on the basis of undertaking submitted by the

Appellants, has recorded that the permission from the MCGM for

demolition of Tower C has been obtained by misrepresenting the

MCGM and by playing fraud on MCGM by representing that the flat

purchasers’ interest would be safeguarded and thereafter now

belatedly for the first time at the stage of Second Appeal, contention

is raised regarding frustration of the contract.

167. Accordingly, no case is made out for grant of stay of this

order.

[MADHAV J. JAMDAR, J.]

230

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