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2020 Supreme(Bom) 1318
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. GUPTE, J.
M/s. Renaissance Infrastructure through its Partners & Others - Appellant
Versus
Parth B. Suchak & Another - Respondent
Second Appeal (ST.) No. 92626 of 2020 with Interim Application No. 92628 of 2020
Decided On : 25-09-2020
For the Appellants :Prasad S. Dani, Senior Advocate i/b Sachin Pawar, Advocate.
For the Respondents:Rubin Vakil a/w Prashant Ghelani, Ankul Kalal, Vinay Shingada i/b Markand Gandhi & Co., Advocates.
The main legal point established in the judgment is the interpretation and application of the proviso to sub-section (5) of Section 43 of the Real Estate Act, which mandates a pre-deposit for entertaining an appeal.
Headnote:
Real Estate Act - Non-compliance with pre-deposit order - Section 44 - Section 43(5) - Summary of the Real Estate Act and Sections 43(5) and 44: The court discussed the case of non-compliance with a pre-deposit order passed by RERA Appellate Tribunal under Section 44 of the Real Estate Act. The court also considered the proviso to sub-section (5) of Section 43 of the Act, which mandates a pre-deposit for entertaining an appeal. The judgment highlighted the nature of the agreement between the parties, emphasizing that it was an agreement for sale between a promoter and an allottee, and the grounds urged by the appellant against pre-deposit. The court concluded that there was no infirmity in the impugned orders passed by the Appellate Tribunal and dismissed the second appeal.
Fact of the Case:
The case involved a dispute between the complainant-allottee and the respondent-promoter regarding the possession of land and a warehousing building, as well as the payment of compensation for loss of rent. The Adjudicating Officer ordered the respondent to pay compensation to the complainant-allottee and hand over possession of the premises, which was challenged by the respondent before the Appellate Tribunal.
Finding of the Court:
The court found that the agreement between the parties was an agreement for sale, and the appellant was liable to make a pre-deposit under the proviso to sub-section (5) of Section 43 of the Real Estate Act. The court concluded that there was no substantial question of law for consideration and dismissed the second appeal.
Issues: The issues involved non-compliance with a pre-deposit order, the nature of the agreement between the parties, and the grounds urged by the appellant against pre-deposit.
Ratio Decidendi: The court held that the agreement between the parties was an agreement for sale, and the grounds urged by the appellant did not support his case against pre-deposit under the proviso to sub-section (5) of Section 43 of the Act.
Final Decision: The Second Appeal was dismissed, and the Interim Application was disposed of. The Appellant was given four weeks' time to pay the amount ordered by the adjudicating authority, RERA, with directions to the executing authority not to conduct the sale of attached property during this period. The court also stated that if the amount was not paid within four weeks, the Tehsildar could proceed with the sale of the attached property.
JUDGMENT :
1. Heard learned Counsel for the parties.
2. This second appeal is from dismissal of an appeal preferred under Section 44 of the Real Estate Act for non-compliance with a pre-deposit order passed by RERA Appellate Tribunal. Respondent No.1 was the original complainant before the adjudicating officer- RERA, whereas the Appellant was the respondent-promoter in the complaint, and who had challenged the order of the adjudicating officer before the Appellate Tribunal.
3. It was the case of the complainant that he had purchased six plots of land together with pre-engineered steel portal framed rectangular building, termed as ‘warehousing building’, from the respondent promoter under an agreement for sale dated 10 December 2009. It was submitted that possession of the suit premises was to be handed over to the complainant-allottee on or before 9 March 2010. It was submitted that since the possession was not so handed over, as per Condition No.4 of the agreement, the promoter was liable to compensate the complainant for loss of rent, which was agreed at the rate of Rs.10/- per sq. ft. per month. This compensation, according to the complainant, worked out to Rs.5.04 Crores, calculated upto 30 June 2018, that is to say, after the grace period of six months of the agreed date of possession and till the time of filing of the complaint (i.e. for about 80 months). The Adjudicating Officer, by his order dated 20 March 2019, ordered the Appellant herein to pay compensation to the complainant-allottee from 9 September 2010 and till handing over possession of the warehousing building at the rate of Rs.6,30,000/- per month in addition to the direction for handing over possession of the plots with the warehousing building and execution of conveyance in favour of the applicants. This order was carried by the Appellant herein before the Appellate Tribunal, who, by its orders dated 9 January 2020 and 24 January 2020, after considering the application of the Appellant-promoter herein for waiver of pre-deposit, as per proviso to sub-section (5) of Section 43 of the Real Estate Regulation and Development Act 2016 (“Act”), ordered the Appellant to deposit 50 per cent of the amount computed as per the impugned order before the Appellate Tribunal as a condition for entertaining the appeal. Since this amount was not deposited by the Appellant herein, the appeal was dismissed by the Appellate Tribunal by its final order dated 20 March 2019. These three orders are the subject matter of challenge in the present second appeal.
4. Mr. Dani, learned Senior Counsel appearing for the Appellant, submits that the Appellant was not liable to make any pre-deposit under the proviso to Section 43 (5) of the Act. Learned Counsel urges three grounds in support of his submission. Firstly, it is submitted that the Appellant is not a promoter, since the agreement between the parties, which gave rise to the complaint, was not an agreement for sale, but an agreement in lieu of the Respondent’s share in the partnership of the Appellant. It is submitted that Respondent No.1 was an erstwhile partner in the Appellant firm and upon his retirement, the agreement of 10 December 2009 was executed in lieu of his share in the partnership. Mr. Dani, secondly, submits that the original claim of the Respondent was pre-mature and devoid of merit. Learned Counsel, thirdly, submits that the order is in the nature of liquidated damages and the adjudicating officer had no jurisdiction to order such damages.
5. None of the grounds urged by Mr. Dani bears on the liability of the Appellant herein to make a pre-deposit under the proviso of subsection (5) of Section 43 of the Act. The Appellant has been developing plots of land and entered into an agreement for allotment and sale of six plots within the project, together with a constructed building, to Respondent No.1 herein. Under this agreement, termed as “agreement for sale”, the Appellant was bound to hand over possession of the suit premi
