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2023 Supreme(MP) 1005

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE
SUBODH ABHYANKAR, J.
G. S. Enterprises, Indore And Others – Appellants
Versus
Yogesh Agrawal – Respondent
S. A. No. 1053 of 2021
Decided on : 29-08-2023

Advocates:
Advocate Appeared:
For the Appellant : Yogesh Mittal
For the Respondent: Vinay Saraf, Rizwan Khan

Headnote:(A) Real Estate (Regulation and Development) Act, 2016 - Sections 43, 45, and 55 - Code of Civil Procedure, 1908 - Section 100 - Appeal against order of Appellate Tribunal - Court examined the composition requirements for the Appellate Tribunal, concluded that it is unconstitutional for the Tribunal to function with only a single Judicial Member and directed adherence to statutory provisions concerning composition. The court deemed such a composition as a sine qua non for validity of proceedings. (Paras 15, 24, 32)

Facts of the case:
The appellants, engaged in construction, disputed the unit cost of a real estate project with the respondent, who had made part payment. A complaint was filed leading to RERA's decision favoring the respondent, later reversed by the Appellate Tribunal upon appeal.

Findings of Court:
The order made by the Appellate Tribunal was declared invalid due to non-compliance with statutory requirements regarding composition. The court mandated reconsideration under lawful conditions.

Issues: The principal issues pertained to the legality of the Tribunal's composition, specifically whether a single member constituted a valid Tribunal.

Ratio Decidendi: The Court held that a valid Appellate Tribunal must comprise a Chairperson and two whole-time members, including a Judicial Member, as mandated by law, emphasizing that deviation nullifies the Tribunal's authority.

Result: Appeal allowed. The previous order set aside and remanded for reconsideration.

Table of Content
1. jurisdiction of real estate appellate tribunal. (Para 2 , 3)
2. factual basis of the appeal. (Para 6 , 7)
3. arguments on the appellate tribunal's constitution. (Para 8 , 9 , 10 , 11)
4. implications of tribunal's composition on judgments. (Para 24 , 25 , 31)
5. outcome of the appeal and further proceedings. (Para 32 , 34)

JUDGMENT :

Heard finally, with the consent of the parties.

2. This civil second appeal has been filed under section 58 of the Real Estate (Regulation and Development) Act, 2016 (in short ‘the Act of 2016’) and under section 100 of the Code of Civil Procedure, 1908 against the judgment dated 7-6-2021, passed by Member, Madhya Pradesh Real Estate Appellate Tribunal at Bhopal in Appeal No. A-135/2019, thereby reversing the order dated 10-6-2019, passed by the M.P. Real Estate Regulatory Authority (in short, RERA) in Case No. M-IND-17-0761 of 2017.

3. This appeal was admitted by this Court vide order dated 5-10-2021, on the following substantial question of law :—

    “1) Whether the impugned judgment can be sustained in the eyes of law, as it has been passed by one Member (Judicial) of the Appellate Tribunal, despite the fact that, as per section 45 of the M. P. Real Estate (Regulatory Authority) Act, 2016 the Appellate Tribunal shall consist of a Chairperson and not less than two whole time Members of which one shall be Judicial Member and the other shall be a Technical or Administrative Member.”

4. Counsel for the appellants has filed an application I. A. No. 3758 of 2023 under proviso to section 100(5) of C.P.C. Raising additional substantial questions of law, which read as under :—

    “(2) Whether the chairman is empowered under section 25 of the Real Estate (Regulation and Development) Act, 2016 to interfere in the judicial process of a bench of Appellate Tribunal while having administrative authority?

    (3) Whether the impugned order passed by single member of the bench, be said to be an order passed by appellate tribunal under section 43(3) of the Real Estate (Regulation and Development) Act, 2016?”

5. The aforesaid application is allowed, and the aforesaid substantial questions of law are also hereby framed. Since a copy of this application was already served to the Sr. counsel for the respondent, who has also advanced his submissions on the said substantial questions of law as well.

6. In brief, the facts of the case are that the appellants are a registered partnership firm and are engaged in the business of construction and development of Real Estate Projects, whereas the respondent is the practicing Chartered Accountant in Indore, who had paid a sum of Rs. 3,70,000/- on 16-4-2016, to the appellants as a part payment towards its booking for unit No. 414 to the forthcoming project of the appellants, namely, “Sky Corporate Park” to be developed on plot No. 25, Scheme No. 78-II, A. B. Road, Indore.

7. The dispute between the parties was that according to the respondent, the cost of the unit was Rs. 37 lakhs, whereas according to the appellants, it was Rs. 42,65,000/-, and other charges. Thus, a complaint was filed by the respondent before the Madhya Pradesh Real Estate Regulatory Authority (hereinafter referred to as ‘RERA’) in which a reply was also filed by the appellants. The RERA has decided the complaint vide its order dated 16-4-2018, in favour of the respondent, and being aggrieved of the same, the Appeal No. 34/2018 was preferred by the appellants before the Madhya Pradesh Real Estate Appellate Tribunal at Bhopal (hereinafter referred to as ‘Appellate Tribunal’), who vide its judgment dated 23-1-2019, remanded the matter back to RERA to decide afresh on merits of the case. After it was remanded back, the RERA has passed the order on 10-6-2019, now, in favour of the appellants. The aforesaid order was again challenged by the respondent in an appeal before the Appellate Tribunal, which has been allowed by the Tribunal vide its impugned order dated 7-6-2021, and being aggrieved of the same, the present a

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