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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Sandeep V. Marne, J.
Balaji Construction Company - Appellant
Versus
Anjusha Ajit Kadam & Ors. - Respondents
Second Appeal No. 731 of 2023, Interim Application No. 18286 of 2023, Interim Application No. 366 of 2024, Interim Application No. 18143 of 2023, Second Appeal No. 727 of 2023, Second Appeal No. 734 of 2023, Interim Application No. 18290 of 2023, Second Appeal No. 737 of 2023, Interim Application No. 18295 of 2023, Second Appeal No. 736 of 2023, Interim Application No. 18294 of 2023, Interim Application No. 364 of 2024, Second Appeal No. 733 of 2023, Interim Application No. 18289 of 2023, Second Appeal No. 735 of 2023, Interim Application No. 18288 of 2023, Interim Application (St) No. 3239 of 2024, Second Appeal No. 732 of 2023, Interim Application No. 18287 of 2023
Decided On : 20-02-2024
RERA - Real Estate Appellate Tribunal - Section 43(5) - The court discussed the requirement of the appellant to make a pre-deposit of the amount of interest as per MahaRERA’s order dated 31 October 2022 towards compliance of Proviso to Section 43 (5) of RERA. The court held that the appellant must deposit the amount of interest as directed by MahaRERA as a pre-condition for entertainment of Appeals before the Appellate Tribunal, even though its liability to pay such interest is not in praesenti but in future. This would however be subject to deduction of amount of interest in respect of COVID-19 pandemic period as per Notifications/Order Nos. 13 and 14 dated 2 April 2020 and 18 May 2020. The court also clarified that the entire amount awarded by MahaRERA must be deposited and the issue of deposit of any penalty does not arise in the present case.
Fact of the Case:
The Appellant, a promoter developing a project named ‘Gajanan Plaza’, was directed by MahaRERA to pre-deposit specified amounts towards compliance with proviso to Section 43 (5) of RERA. The Appellant filed Appeals before the Appellate Tribunal challenging MahaRERA’s Order. The Appellate Tribunal directed the Appellant to deposit the entire amount ordered by MahaRERA in compliance with the proviso to Section 43 (5) of RERA. The Appeals were dismissed for non-compliance, leading to the filing of Writ Petitions in the High Court.
Finding of the Court:
The court found that the Appellant must deposit the amount of interest as directed by MahaRERA as a pre-condition for entertainment of Appeals before the Appellate Tribunal, even though its liability to pay such interest is not in praesenti but in future. The court also clarified that the entire amount awarded by MahaRERA must be deposited and the issue of deposit of any penalty does not arise in the present case.
Issues: The main issues were whether the Appellants can be directed to deposit the amount of interest as a pre-condition for entertainment of Appeals before the Appellate Tribunal when the liability of the Appellant to pay such interest is not in praesenti but in future, and whether the Appellate Tribunal is justified in directing deposit of the entire amount of interest when proviso to sub-Section (5) of Section 43 permits deposit of 30% of the penalty.
Ratio Decidendi: The court held that the appellant must deposit the amount of interest as directed by MahaRERA as a pre-condition for entertainment of Appeals before the Appellate Tribunal, even though its liability to pay such interest is not in praesenti but in future. The court also clarified that the entire amount awarded by MahaRERA must be deposited and the issue of deposit of any penalty does not arise in the present case.
Final Decision: The Appeals filed by Appellant were partly allowed to the limited extent of directing the Appellate Tribunal to deduct the amount of interest payable during the moratorium period covered by Notifications/Order Nos. 13 and 14 dated 2 April 2020 and 18 May 2020 issued by MahaRERA. The Judgment and Order of the Appellate Tribunal dated 31 October 2022 was modified to this limited extent and rest of the Order was maintained. The Appellate Tribunal was directed to pass a fresh Order determining the exact amount to be pre-deposited by the Appellant for compliance with proviso to Section 43 (5) of RERA after deducting the amount of interest in respect of moratorium period as directed. An Order for fresh computation was to be passed by the Appellate Tribunal as expeditiously as possible, preferably by 31 March 2024. Only in the event of the Appellant depositing the amount so determined by the Appellate Tribunal on or before 30 April 2024, the Appeals filed by it shall stand restored. All the Appeals were disposed of with no order as to costs.
JUDGMENT :
1. These Second Appeals filed by the Appellant challenge common Order dated 27 October 2023 passed by Maharashtra Real Estate Appellate Tribunal (Appellate Tribunal) directing Appellant to pre-deposit the specified amounts towards compliance with proviso to Section 43 (5) of Real Estate (Regulation and Development) Act, 2016 (RERA).
2. Briefly stated, facts of the case are that Appellant is a promoter who is developing a project named ‘Gajanan Plaza’. Respondents are the allotees of various flats, with whom the promoter has executed Agreements for Sale agreeing to deliver possession of respective flats on various agreed dates. Respondents approached Maharashtra Real Estate Regulatory Authority (MahaRERA) by filing their respective complaints against Appellant seeking possession of their respective flats along with interest for delayed delivery of possession. MahaRERA proceeded to allow the complaints filed by Respondents by Order dated 31 October 2022 and set aside the termination letters issued by Appellants terminating the allotment letter/agreements with a further direction for execution of supplementary agreements in accordance with terms and conditions of the MOU executed with other allotees of the project. Appellant was directed to handover possession of commercial premises allotted to the Respondents as per supplementary agreements to be executed with them. Appellant was further directed to pay interest for delayed possession to the Respondents from 1 April 2019 till grant of possession. However, MahaRERA directed that the amount of interest shall be paid by the Appellant to the Respondents after obtaining full occupancy certificate by setting it off against outstanding dues with interest payable by Respondents. MahaRERA further directed that Appellant would be entitled to claim benefit of moratorium period as per Notifications/Order Nos. 13 and 14 dated 2 April 2020 and 18 May 2020.
3. Aggrieved by MahaRERA’s Order dated 31 October 2022, Appellant has filed Appeals before the Appellate Tribunal. The Appellate Tribunal passed Order dated 2 March 2023 directing the Appellant to deposit the entire amount ordered by MahaRERA in compliance of the proviso to Section 43 (5) of RERA. Since Appellant did not deposit the amount as directed by Order dated 2 March 2023, Appellate Tribunal passed Order dated 10 April 2023 holding that the Appeals are liable to be dismissed and posted the Appeals for compliance/dismissal on 26 April 2023. It appears that on 26 April 2023, the Appeals were dismissed.
4. Appellant filed various Writ Petitions in this Court challenging the Order dated 26 April 2023 complaining that MahaRERA had not quantified the amounts payable under the Order dated 31 October 2022. This Court was therefore informed that the Appellant was unable to pre-deposit the amount under Section 43 (5) of RERA. This Court therefore disposed of the Writ Petitions directing the Appellate Tribunal to quantify the amount to be pre-deposited by the Appellant. The Appellate Tribunal has accordingly passed Order dated 27 October 2023 quantifying the amount of pre-deposit to be made by the Appellant in compliance of proviso to Section 43 (5) of RERA. While doing so, the Appellate Tribunal has also considered and rejected the objection of Appellant that no deposit is required to made in terms of MahaRERA’s order. Appellant is aggrieved by the Order dated 27 October 2023 and has filed the present Appeals.
5. This Court has admitted the Appeals by formulating the following substantial questions of law:
ii) Whether the Appellate Tribunal is justified in directing deposit of the entire amount of interest when proviso to sub-Section (5) of Section 43 permits deposit of 30% of the penalty?”
6. The
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