The determination of whether an appellant is a 'promoter' within the meaning of the proviso to sub-section (5) of Section 43 is a jurisdictional question to be decided by the Appellate Tribunal before passing any order of pre-deposit.

JUDGMENT :

1. These Second Appeals, which are connected, are heard together. Mr. Sharma, learned Counsel appearing for the Appellant in Second Appeal (St.) No.92158 of 2020, seeks leave to withdraw the appeal. The second appeal is dismissed as withdrawn with no order as to costs. In view of the disposal of the second appeal, the Interim Application made therein does not survive and is also disposed of.

2. The two remaining second appeals, i.e. Second Appeal (St.) No.92186 of 2020 and Second Appeal (St.) No.92146 of 2020, raise significant points of law arising under the proviso to sub-section (5) of Section 43 of Real Estate (Regulation and Development) Act, 2016 (“Act”), concerning, particularly, pre-deposit to be ordered, when a promoter files an appeal with the Appellate Tribunal under sub-section (5) of Section 43 of the Act. The Appellants in both these appeals are claiming that they do not come under the expression “promoter” used in the proviso and hence, are not liable to make any pre-deposit.

3. The Appellant in Second Appeal (St.) No.92146 of 2020, i.e. Chourangi Builders & Developers Pvt Ltd (“Chourangi”), was the original developer, who had issued allotment letters to the allottee flat purchasers contesting these appeals and who had entered into agreements for lease, covered by the Act, with them. The development rights, in pursuance of which these deocuments were executed, were originally conferred on Chourangi by Maharashtra Airport Development Company Limited (“MADC”), a Special Planning Authority under the Maharashtra Regional and Town Planning Act, 1966 for colonizing areas around Nagpur Airport. It appears that MADC subsequently terminated the development agreement in favour of Chourangi and appointed Nagpur Integrated Township Pvt. Ltd (“NIT”) - companion appellant in Second Appeal (St.) No.92186 of 2020 - as a developer for the project. A tripartite agreement was thereupon entered into between MADC, Chourangi and NIT for taking over of the project by the latter. In pursuance of this tripartite agreement, Chourangi claims to have given an option to all its allottees including the Respondents herein to opt either for return of their monies paid for their allotments or substitute their agreements by agreements with NIT for the allotted premises; in either case, it was NIT, who was to be responsible for dealing with the allottees. There are disputes between the parties on various issues arising out of this arrangement, such as, whether, under the tripartite agreement, NIT could be said to be liable to the allottees for any lapse on the part of Chourangi prior to the execution of the tripartite agreement, or whether the allottees in the present case had opted for any particular option, and if so, which, or whether, so far as the allottees in the two second appeals herein are concerned, which of the two, i.e. Chourangi and NIT, could be said to be a promoter ? A prima facie appreciation of these issues was necessary to decide the question of application of the proviso to sub-section (5) of Section 43 of the Act. Only after such appreciation could the Appellate Tribunal have passed a pre-deposit order either against Chourangi or against NIT or against both. Far from satisfying this mandate, what appears from the orders impugned herein by both Chourangi and NIT is that the Tribunal has passed orders of pre-deposit under the proviso against both without any discussion as to their respective status as promoter/s for the purposes of these appeals. An important question of law, besides the question on merit briefly indicated above, which immediately arises, as a result, is whether the Appellate Tribunal, whilst acting under sub-section (5) of Section 43 of the Act, could make an order of pre-deposit against any appellant before it without considering whether he is a “promoter” within the meaning of the proviso to that sub-section. The second appeals are, accordingly, admitted on this question of law and are taken up for h