Even an ex-parte judgement/ order has to be on merits

 According to Order XX of the Civil Procedure Code, 1908 (hereinafter referred to as the CPC), no suit can be decreed as a matter of course, and every judgment has to be on merits.

Every judgment passed by a court of law has to be on merits, irrespective of the fact, whether or not, the defendant appears before the court of law and defends himself.

If the defendant appears before the court and states that he does not want to defend himself, that will not enable the court to give an automatic decree in favour of the plaintiff. The court can, after due application of mind, decree or even reject the claim of the plaintiff.

It is important to note that if, the court finds that matter before it is complex and it would require legal assistance to decide the matter on merits then the court, on its own motion, can appoint an advocate to assist it, and such advocate is called amicus curiae

• In the matter of: Lakshmi Ram Bhuyan V/s Hari Prasad Bhuyan, (2003) 1 SCC 197, it was held that:

“… Order XX requires a judgment to contain all the issues and findings or decision thereon with the reasons therefore. The judgment has to state the relief allowed to a party. The preparation of decree follows the judgment. The decree shall agree with the judgment. The decree shall contain, inter alia, particulars of the claim and shall specify clearly the relief granted or other determination of the suit. The decree shall also state the amount of costs incurred in the suit and by whom or out of what property and in what proportions such costs are to be paid.”

• In the matter of: Ramesh Chand Ardawatiya V/s Anil Pajwani, AIR 2003 SC 2508, while considering the provisions of Order IX, Rule 6 and Order VIII, Rule 10 of the CPC, it was observed that even if the suit proceeds ex-parte under Order IX, Rule 6 of the CPC, the necessity of proof by the plaintiff of its case cannot be dispensed with.

• Maya Devi V/s Lalta Prasad, (2015) 5 SCC 588, it was held that the absence of defendant to contest the suit does not invite a punishment in the form of an automatic decree.

• State of Rajasthan V/s Ani, (1997) 6 SCC 162, it was held that Section 165 of the Indian Evidence Act, 1872 confers vast and unrestricted powers on the trial court to put “any question he pleases, in any form, at any time, of any witness, or of the parties, about any fact relevant or irrelevant” in order to discover relevant facts. 

Plaintiff has to stand on its own legs:

If the defendant submits to the court that he does not want to defend himself, as a matter of his choice then this does not mean that the defendant admits the assertions made against him by the plaintiff in the plaint. The plaintiff still has to prove his case by leading necessary and cogent evidence, as required
 In the matter of: Anil Rishi V/s Gurbaksh Singh, (2006) 5 SCC 558, it was observed that:
                                                                                                                                                                             “… The initial burden of proof would be on the plaintiff in view of Section 101 of the Evidence Act… In terms of the said provision, the burden of proving the fact rests on the party who substantially asserts the affirmative issues and not the party who denies it. … In terms of Section 102 [of the IEA] the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same.”                                   

Allahabad High Court - Every court/tribunal has an inherent power of procedural review and the same can not be denied to the petitioner merely for the reason that there is no provision to that effect in the Act/Statute.

 In the Matter of M/S T.G.B. Realty Pvt. Ltd. Complaint no. WRIT - C No. - 32301 of 2019 decided on 17.10.2019  before Allahabad High Court

Fact of the Case.

• The petitioner is a builder and its project Neel Gagan, Siddhartha Vihar, Ghaziabad is registered under the Real Estate Regulatory Authority

• The petitioner by means of this writ petition has made a prayer for quashing of the orders dated 10.4.2018 dated 27.4.2019 passed by the RERA in complaint case no. 1120173596 Prakash Chandra Agrawal Vs.M/s. TGB Reality Private Limited and for quashing of the recovery certificate dated 17.8.1999 and the recovery citation dated 12.9.2019 issued in pursuance to the aforesaid orders.

Argument by the Applicant

• both the above orders have been passed without any notice and opportunity of hearing to the petitioner.

• The complainant has given the wrong address of the petitioner in the complaint and the notice was sent on the wrong address which was never served upon the petitioner. 

• it was denied opportunity of hearing

• If the petitioner has not been served with any notice or given opportunity of hearing, the remedy is by way of an application for recall of the impugned orders before the RERA.

Argument by the Defendant

• RERA is not entertaining the recall application for the reason that there is no provision under the Act for the said purpose.

Final Order

• It is well recognized that every court/tribunal has an inherent power of procedural review and the same can not be denied to the petitioner merely for the reason that there is no provision to that effect in the Act/Statute.

• we dispose of the writ petition with liberty to the petitioner to apply for recall of the two orders impugned in this writ petition passed by the RERA. In case any such recall application/(s) are filed, the RERA would entertain the same and dispose them of in accordance with law most expeditiously, if possible, within a period of one month from the date of the filing of such application (s).

MahaRERA Appellate Tribunal: There can be no forfeiture on withdrawal before sale agreement

 The Maharashtra Real Estate Appellate Tribunal, Mumbai, on March 17, 2021 set aside the order dated October 3, 2019 (“impugned order”) passed in Complaint No. CC006000000089770 in the matter of Mr. Dinesh R. Humane and Mrs. Ranjana D. Humane (“Appellants/Allottees”) v. Piramal Estate Private Limited (“Respondent/Promoter”) by the Maharashtra Real Estate Regulatory Authority (“MahaRERA”). The order dated March 17, 2021 directed the Promoter to refund the total amount paid by Allottees on the cancellation of flat reservation.

Facts of the Case:

The Allottees agreed to purchase, and the Promoter agreed to sell Flat No. 807 in the project namely Vaikunth Cluster- 2 at Thane. The Allottees submitted form of ‘request for reservation’ of Flat on 29th January 2019 and paid an amount of Rs. 1,12,393/- as booking amount to the Promoter. The Allottees  also paid Rs. 4,49,574/- on March 1, 2019 towards price of the Flat to Promoter. On account of medical emergency in the family of Allottees, they decided to cancel the flat booking. Accordingly, they sent an   e-mail to the Promoter requesting to cancel the flat booking and to refund the total amount of Rs.5,61,967/-. The Promoter replied vide e-mail dated May 20, 2019 that the amount paid by Allottees is forfeited on account of cancellation. The Allottees filed a Complaint before MahaRERA for recovery of amount of Rs. 5,61,967/- from the Promoter. The impugned order was passed by MahaRERA whereby the Promoter/ Respondent was directed to refund the booking amount in accordance with the booking form. The Allottees filed an appeal before MahaRERA Appellate Tribunal challenging the order passed by MahaRERA.

Issues:

Whether the MahaRERA order directing the Promoter to refund the booking amount to Allottees in accordance with booking form signed by both the parties is correct?

Analysis:

The MahaRERA Appellate Tribunal held that:

Form of ‘request for reservation’ is signed by Allottees only and not by the Promoter. The terms and conditions recited in Annexure “A” thereto are to be followed and observed by Allottees only. As per the impugned order, amount is to be refunded in accordance with the booking form signed by both the parties. Annexure “A” is not styled as booking form and there is no document having nomenclature as "booking form” which is signed by Allottees or by both the parties. Thus, the impugned order is passed based on such document which does not exist on record.

The only document signed by the Allottees is the printed form styled as ‘request for reservation’, which consists of 33 different terms and conditions to be observed by Allottees only. Clause 17 providing forfeiture of 10% amount of the total price of flat or the amount paid till the date, whichever is lesser, in case of withdrawal by Allottees is ex-facie unreasonable, unfair and inequitable. Existence of such a condition in the printed form of ‘request for reservation’ is against the object and purpose of Real Estate (Regulation and Development) Act, 2016 (“RERA”) and the same being against statute of RERA is not binding on the parties and such unreasonable and unfair transaction cannot be enforced.

The Supreme Court in the case of Pioneer Urban Land and Infrastructure v. Govindan Raghavan, [Appeal No. 12238 of 2018, decided on April 2, 2019] held that the court will not enforce an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where contracting parties are not equal in bargaining power and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form as a part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rule may be.

The agreement for sale was not executed between the parties. Parties never reached to the stage of executing agreement for sale. There was no attempt to execute the agreement on the part of either the Promoter or Allottees. The refund of amount paid to promoter can be demanded as per Section 18 of RERA on the ground that promoter fails to give possession on agreed date or fails to complete the project as per terms and conditions of agreement for sale. However, in this peculiar matter though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that the object of RERA is to protect the interest of the consumer.

Regulation 39 of Maharashtra Real Estate Regulatory Authority (General Regulation), 2017 and Regulation 25 of Maharashtra Real Estate Appellate Tribunal Regulation, 2019 are in respect of the inherent powers of the regulatory authority and the appellate tribunal to pass such orders which are necessary to meet the ends of justice.

The MahaRERA Appellate Tribunal, thus, set aside the impugned order and directed the Promoter to refund the full amount paid by Allottees.

Long term leases would amount to sale and hence lessees will also fall within the definition of "allottee”

 In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal

In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal ruled that “ Long term leases would amount to sale and hence lessees will also fall within the definition of allottee”

This Order was further upheld by the Order of Bombay high Court in Lavasa Corporation Limited v. Manju Narendra Joshi (C.A. No. 791 of 2018) decided on 07.08.2018.

On behalf of the lessor it was contended that since the impugned agreement was an 'agreement of lease' and not an ‘agreement for sale’, the provisions of RERA would not be applicable.

The definition of ‘promoter’ under section 2(zk) of RERA was relied upon by the lessor, as it contemplates a person, who constructs or caused to be constructed an apartment ‘for the purpose of selling’.

Reliance was also placed on the definition of 'allottee', under Section 2(d) of RERA, which specifically provides that allottee does not include a person to whom plot, apartment or building is ‘given on rent’.

Reliance was placed on the judgment of the Supreme Court in the case of R.K. Palshikar (HUF) v. CIT, M.P., Nagpur and Bhandara, 1988 (172) ITR 311, wherein it was held that lease for a period of 99 (ninety nine) years would amount to transfer of capital assets. A judgment of the Madras High Court was also relied upon, which held that a lease for a period of 99 (ninety nine) years is an alienation as a sale, and mere use of the word 'lease' or the fact that a long term is fixed would not by itself make the document in lease.

The intention of RERA, as highlighted by the Supreme Court in the case of R.S. Raghunath v. State of Karnataka, (1992) 1 SCC 335 was also looked at, which was to protect the interest of consumers who have invested substantial amounts in real estate projects. If they are excluded from the definition of 'Allottee' and thereby from the protection given under the Act, by giving restrictive meaning to the term 'Allottee', the very object of RERA would stand frustrated.

Supreme Court - A citizen’s right to own private property is a human right. The state can't take hold of it without following due procedure & authority of law

 In the Matter of VIDAYA DEVI vs. STATE OF HIMACHAL PRADESH Complaint no. (CIVIL APPEAL NOS. 60­61 OF 2020) decided on 08.01.2020 before Supreme Court of India

The Apex Court has held that A citizen’s right to own private property is a human right. The state can't take hold of it without following due procedure & authority of law,The state cannot trespass into the private property of a citizen and then claim ownership of the land in the name of ‘adverse possession’, The State cannot be permitted to perfect its title over the land by invoking the doctrine of adverse possession to grab the property of its own citizens,

Adverse possession was defined by the Supreme Court in Amarendra Pratap Singh v Tej Bahadur Prajapati Appeal (civil) 11483 of 1996 decided on 21.11.2003 as: “

A person, though having no right to enter into possession of the property of someone else, does so and continues in possession setting up title in himself and adversely to the title of the owner, commences prescribing title into himself and such prescription having continued for a period of 12 years, he acquires title not on his own but on account of the default or inaction on part of the real owner, which stretched over a period of 12 years results into extinguishing of the latter’s title.”

In SM Karim v Mst. Bibi Sakina 1964 AIR 1254, 1964 SCR (6) 780 decided on 14 February, 1964 following the equitable principle of nec vi nec clam nec precario (without force, without secrecy, without permission), it was ruled that adverse possession must be adequate in continuity, in publicity and extent, and a plea is required, to show when possession becomes adverse so that the starting point of limitation against the party affected can be found.

• The Limitation Act, 1963, lays down a limitation period of 12 years for suit of possession of immovable property or any interest based on the title.
• The period for limitation for the government, however, is 30 years by virtue of article 112.
• The law of adverse possession was judicially summed up by the Judicial Committee of the Privy Council in Perry v Clissold, where it was observed that if a rightful owner does not claim his right against a possessor within a given time, his ownership right stands extinguished and the same was approved by in Nair Service Society Limited v KC Alexander.1968 AIR 1165, 1968 SCR (3) 163 12 February, 1968

It was further clarified in Karnataka Wakf Board v Government of India that the question of adverse possession is a mixed question of fact and law as the trespasser needs to prove a continued possession of more than 12 years with animus possidendi (intention to possess) against the original owner. Further, the starting point of limitation commences when the defendants’ possession becomes adverse (Vasantiben Nayak v Somnath Muljibai and Ors).

However, the understanding of adverse possession has evolved in recent times and the Supreme Court has reiterated the need to take a fresh look. The Supreme Court, in PT Munichikkanna Reddy and Ors v Revamma, was guided by the judgement of the European Court of Human Rights (ECHR) in JA Pye (Oxford) Ltd v United Kingdom, which had critiqued the law of adverse possession and urged re-examination in light of changes in the law.

The Supreme Court in Hemaji Waghaji v Bhikhabhai Khengarbhai criticized the law and stated that it was irrational, illogical and wholly disproportionate. The court directed the Ministry of Law to take a fresh look at the law of adverse possession.

The then government tasked the Law Commission with preparing a consultation paper. While noting that the ECHR judgment was overturned, it stated that there was a need to strike a balance between the pros and cons of the law.

The court had further narrowed the scope for establishing a claim of adverse possession in Dagadabai v Abbas@Gulab Rustum Pinjari by ruling that the possessor must necessarily first admit the ownership of the true owner over the property and the true owner has to be made a party to the suit.

It was restricted further in Mallikarjunaiah v Nanjaiah where the court observed, “Mere continuous possession, howsoever long it may have been qua its true owner is not enough to sustain the plea of adverse possession unless it is further proved that such possession was open, hostile, exclusive and with the assertion of ownership right over the property to the knowledge of its true owner.”

However, in the recent judgement of Ravinder Kaur Grewal v Manjit Kaur, the court held a contrary position that a plaintiff can file a suit for perfection of title by adverse possession. It also refuted the contention that there is no conferral of right by adverse possession.

The law of adverse possession is thus clearly in a state of judicial flux and requires decisive legislative action to settle the position. Considering the principles of adverse possession, the law needs to be retained. However, a period of 12 years is insufficient and does not conform to international statues or article 112 of the Limitation Act, 1963 itself. Thus, the period of limitation may be increased from 12 years to 30 years or so.

Punjab & Haryana High Court - the requirement of pre- deposit of the amount, as set out in the proviso to Section 43 (5) of the Act, cannot be held to be unreasonable or arbitrary

 In the Matter of Experion Developers Pvt. Ltd. V/s State of Haryana and others Complaint no, CWP No. 38144 of 2018 and other connected matters decided on 16.10.2020 before Punjab & Haryana High court

• These writ petitions under Article 226 of the Constitution raise several important questions of law concerning the interpretation of the provisions of the Real Estate (Regulation and Development) Act, 2016 (hereinafter 'the Act') as well as the Haryana Real Estate (Regulation and Development) Rules, 2017 (hereinafter 'the Haryana Rules').

• In some of these petitions, a challenge has been raised to the constitutional validity of the proviso to Section 43 (5) of the Act and correspondingly the orders passed by the Real Estate Appellate Tribunal (hereinafter 'Appellate Tribunal') rejecting the prayer of the Petitioners for waiver of the pre-deposit for entertaining the appeal against an order of either the Real Estate Regulatory Authority ('Authority') or the Adjudicating Officer ('AO'), as the case may be.

• Under Section 43(5) ,where the order appealed against imposes a penalty, the promoter has to deposit at least 30% of the penalty amount or such higher amount as may be directed by the Appellate Tribunal. 

• Where the appeal is against any other order which involves the payment of an amount to the allottee, then what has to be deposited with the Appellate Tribunal is "the total amount to be paid to the allottee" by such promoter/appellant "including interest and compensation imposed on him, if any, or with both, as the case may be." Further, such an amount has to be deposited "before the appeal is heard."

• The further prayer in these petitions is that given the undue hardship faced by the Petitioners, the aforesaid orders of the Appellate Tribunal should be interfered with by this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, and the Appellate Tribunal be directed to entertain the Petitioners' appeals without insisting on the pre- deposit.

Order of the High Court

• This Court has perused the decision in M/s. Lotus Realtech Pvt. Ltd. v. State of Haryana CWP No. 15205 of 2020 (O&M) 

• The law laid down by the Supreme Court in the  M/s. Technimont Pvt. Ltd. v. State of Punjab AIR 2019 SC 4489 is that the right of appeal is the creature of a statute and therefore, is and can be made conditional upon fulfilling certain conditions by the statute itself and therefore, any requirement of fulfillment of a condition imposed by the statute itself before a person can avail the remedy of appeal is a valid piece of legislation.

• Appellate Authority does not have the inherent powers to waive the limitation or precondition prescribed by the statute for filing an appeal as the inherent incidental or implied powers vested in the Appellate Authority cannot be invoked to render a statutory provision nugatory or meaningless.

• the treatment of promoters as a class different from other appellants satisfied the test of reasonableness laid down by several judgments of the Supreme Court explaining Article 14 of the Constitution of India.

• as the promoters form a distinct and separate class and as the prescription of the condition of pre-deposit upon the promoters is in furtherance of the object of the legislation, therefore, the imposition of the condition of pre- deposit upon the promoters satisfies the test of Article 14 of the Constitution of India."

• The proviso to Section 43 (5) of the Act clearly states that the pre-deposit is required to be made "before the said appeal is heard." In other words, the Appellate Tribunal is not obliged to proceed to 'entertain' or hear an appeal that has been filed before it, if the promoter, who has filed such appeal, fails to comply with the direction for making the pre-deposit in terms of the proviso to Section 43 (5) of the Act.

• even the High Court cannot issue any direction in that regard contrary to the Act, since it does not have the powers vested in the Supreme Court under Article 142 of the Constitution of India.

• In each of the individual writ petitions before this Court, where the order of the Appellate Tribunal declining to waive the requirement of pre-deposit has been challenged, this Court finds that in the facts and circumstances of the individual cases, no grounds have been made out to persuade this Court to exercise its writ jurisdiction under Article 226 of the Constitution to grant any relief in respect thereof. In none of the cases is the Court satisfied that a case of 'genuine hardship' has been made out.

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Allahabad High Court - Section 43(5) mandates pre deposit of 30% of Penalty amount or higher at the discretion of tribunal, the tribunal must form its opinion on the facts and material before it as the appeal before the Tribunal is the first and the only appeal on facts.The Increase in pre deposit may be exercised only in extreme cases

 In the Matter of Air Force Naval Housing Board Air Force Station Versus U.P. Real Estate Regulatory Authority And Another Complaint no. RERA APPEAL DEFECTIVE No. - 6 of 2021 decided on 16.03.2021 before Allahabad High court

Fact of the Case

• The present appeal was filed against the order passed by the Real Estate Appellate Tribunal (Tribunal in short) in Appeal/Misc. Case No.360 of 2019 dated 28.02.2020 whereby the Tribunal has dismissed that appeal filed by the appellant, under Section 44(2) of the Real Estate (Regulation & Development) Act, 2016. Undisputedly, the above-described appeal came to be filed by the appellant against the order of the RERA, dated 10.04.2019 whereby penalty @ MCLR + 1% w.e.f. 01.07.2012 was imposed on the appellant.

•  at the time of filing the aforesaid appeal to the Tribunal, the appellant furnished a demand draft for an amount of Rs.6,33,000/- towards 30% of the penalty amount awarded by the RERA.

• By an order dated 28.01.2020, the Tribunal required the appellant to deposit the balance amount i.e. the entire amount of penalty awarded by the RERA as a pre-condition to maintain the appeal.

• Thereafter the matter was listed before the Tribunal on 28.02.2020 .the instant case was dismissed due to non compliance of Tribunal's order dated 28.01.2020.

• The Tribunal has relied on the observations made by the Lucknow Bench of this Court in Second Appeal No.364 of 2018 (Radicon Infrastructure And Housing Private Limited Vs. Karan Dhyani) and Second Appeal No. 367 of 2018 (Radicon Infrastructure And Housing Private Limited Vs. Dhaneshwari Devi Dhyani), decided on 26.07.2019, to require the appellant to deposit the entire amount of disputed penalty as a condition to maintain the appeal.

Question of Law

1. Whether deposit of the entire disputed demand of penalty is a condition precedent to maintain the appeal against penalty, under Section 44(2) of the Real Estate (Regulation & Development) Act, 2016?"

Argument from Appellant

• The appellant is a zero-profit organization, registered as a society of retired personnel of the Indian Air Force and the Indian Navy. It exists and operates only for the purpose of providing affordable housing to the members of the Indian Air Force and the Indian Navy and the widows of such personnel.

• Learned counsel for the appellant would submit that the Tribunal has completely misread the law and/or mis-applied itself to reach a very harsh conclusion that the appeal filed by the appellant was not maintainable because the appellant did not deposit the entire disputed demand of penalty.

• it has been submitted, Section 43(5) of the Act does not mandate pre-deposit of the entire disputed demand of penalty as a pre-condition to maintain an appeal under Section 44(2) of the Act.

• Also, the decision of this Court in Second Appeal Nos.364 of 2018 and 367 of 2018 (Radicon Infrastructure And ... vs Karan Dhyani ) does not lay down as a proposition of law that the entire disputed demand of penalty must be deposited before an appeal is entertained or maintained under Section 44 of the Act.

Argument by defendant

• Right of appeal granted under Section 34 of the Act is circumscribed and conditioned by Section 43(5) of the Act.

• According to him, there is no right vested in the appellant to maintain its appeal by depositing 30% of the disputed penalty. The Tribunal could determine a higher amount and, as has been done in the present case. The right of appeal would arise only upon deposit of that higher amount. Since the appellant did not make the necessary deposit, the Tribunal has rightly dismissed its appeal.

Decision of Court

• the first conclusion that may be safely drawn is Reading Section 43 (5) of the Act strictly, no appeal may be filed by a 'promoter' against the order of the RERA imposing penalty unless a minimum of 30% of the demand of penalty is pre-deposited by such 'promoter'. There is absolutely no discretion vested in the Tribunal to reduce that amount below the statutorily defined minimum of 30% of the penalty imposed by the RERA. That condition is absolute. It has also been met, in the facts of this case. Neither that percentage or amount can be reduced by the Tribunal nor an appeal filed without deposit of that amount be entertained by the Tribunal.

• Second, a discretion is vested in the Tribunal to determine an amount more than 30% of the penalty - to be deposited as a condition to maintain such appeal by a 'promoter'. The legislature has referred to the same as such higher percentage "as may be determined by the Appellate Tribunal.

• If the Tribunal were to require a particular 'promoter'-appellant to deposit an amount that be more than 30% of the penalty amount imposed by the RERA in the order impugned before the Tribunal, as a pre-condition to maintain its appeal, it would have to first determine the same.

• In the context of Section 43(5) of the Act, the Tribunal must form its opinion on the facts and material before it - why a higher percentage of the disputed penalty be deposited by a 'promoter'-appellant as a condition to entertain its appeal.this would involve exercise of judicial discretion.

•  the appeal before the Tribunal is the first and the only appeal on facts. The further appeal to this Court is an appeal on substantial question/s of law. Thus, the Tribunal may never place a condition so onerous or burdensome, on the appellant before it, as may shut out the only remedy of appeal on fact, available under the Act.

• The judicial discretion thus vested on the Tribunal must be exercised with extreme care and it must not appear to have been exercised on whims or fancies. It may be exercised only in extreme cases. Only by way of illustration, that discretion may be exercised where it appears to the Tribunal, even on a prima facie basis, that the penalty imposed by RERA is too less/insignificant to the infraction found or that the appellant before it is a repeat or habitual or wilful offender or the facts appear to involve large scale infractions of the law, by way of an organised activity. In such and other cases, for which judicially sound reasons may be recorded as may compel or commend to the Tribunal to require a particular appellant to deposit an amount higher than the statutory pre-defined limit of 30% of the penalty.

• Unless careful application of mind is first made by the Tribunal to the facts of the individual case and unless the Tribunal records specific reasons to determine the higher amount required to be deposited by the 'promoter'-appellant, to maintain its appeal against the order imposing penalty passed by the RERA, the entire exercise made by the Tribunal may be questioned as arbitrary or unreasoned. That would be wholly undesirable and an avoidable course in the context of the quasi-judicial power exercised by the Tribunal.

• Normally, the legislature provides a right of appeal without a condition of pre-deposit. However, in financial matters, the modern legislative trend has been to provide for a minimum deposit as a pre-condition to maintain the appeal. Unless the orders of the Tribunal requiring pre-deposit at higher rates (30% of penalty) are informed with reasons, such practice, if allowed, would amount to taking away the right of appeal before the Tribunal, by an order passed by the Tribunal that has been vested with the jurisdiction to decide such appeals on merits. It would be a uniquely odd process and result, factually and juris prudentially. The appellant in that situation may end up being pre-judged by the Tribunal.

• Consequently, the order dated passed by the Tribunal dated 28.02.2020 is set aside.

Supreme Court - Agreement to Sell Land, but Convyeyance deed was executed after some time - what should be market value of land for the purpose of conveyance deed?

 In the matter of M/s. Residents Welfare Association, Noida V/s State Of U.P. & Ors Complaint no. CIVIL APPEAL NO. 4367 OF 2000  decided on  15.04.2009 before Supreme Court of India

Agreement to Sell Land, but Conveyance deed was executed after some time - what should be market value of land for the purpose of conveyance deed?

1. When delay is caused by Purchaser intentionally, the market value should be determined on the date when the deed is executed and not when an agreement to sale the property or lease the property had been registered.

1. Where however the delay is caused by seller the market value should be determined on the date when the agreement to lease the property was entered.

1. Further observed that there cannot be a straitjacket formula devised for determining the same.

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Once registration of the Real Estate project lapses on non-completion of project or on revocation,the Authority is enjoined upon the duty to consult with the appropriate Government to take such action as it may deem including the carrying out of the remaining development works by competent authority or by the association of allottees or any other manner

 In the Matter of  Bikram Chatterji vs Union Of India Complaint no. WRIT PETITION (C) NO.940/2017 decided on  23.07.2019 before Supreme Court of India

The Supreme Court Observed that

112. Once registration lapses on non-completion of project within the time stipulated or it is revoked the consequence ensue as enumerated in Section 8 of RERA, the Authority is enjoined upon the duty to consult with the appropriate Government to take such action as it may deem including the carrying out of the remaining development works by competent authority or by the association of allottees or any other manner as may be determined by the Authority. The development work has to be completed and cannot be left in between. Section 8 reads thus;

“8. Obligation of Authority consequent upon lapse of or on revocation of registration.- Upon lapse of the registration or on revocation of the registration under this Act, the Authority, may consult the appropriate Government to take such action as it may deem fit including the carrying out of the remaining development works by competent authority or by the association of allottees or in any other manner, as may be determined by the Authority:

Provided that no direction, decision or order of the Authority under this section shall take effect until the expiry of the period of appeal provided under the provisions of this Act:

Provided further that in case of revocation of registration of a project under this Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works.”

Supreme Court - All agreements of sale are bilateral contracts as promises are made by both - the vendor agreeing to sell and the purchaser agreeing to purchase. agreement of sale signed by the vendor alone and delivered and accepted by the purchaser is a valid contract, however, no practice of the purchaser alone signing an agreement of sale.

 In the Matter of  Alka Bose vs Parmatma Devi & Ors Complaint no. CIVIL APPEAL NO(s). 6197 OF 2000  decided on 17.12.2008 before Supreme Court of India

The defendant submitted that a contract for sale, like any other contract, is bilateral in nature under which both vendor and the purchaser have rights and obligations. It is submitted that an agreement for sale being a contract for sale, creating a right in the purchaser to obtain a deed of conveyance in terms of the agreement under which, the vendor agrees to convey to the purchaser, and the purchaser agrees to purchase, the subject-matter of the agreement for an agreed consideration, subject to the terms and conditions stipulated in the said agreement, it is bilateral. It is therefore contended that an agreement of sale is neither complete nor enforceable unless it is signed by both parties.

The apex court observed that

In India, an agreement of sale signed by the vendor alone and delivered to the purchaser, and accepted by the purchaser, has always been considered to be a valid contract. In the event of breach by the vendor, it can be specifically enforced by the purchaser. There is, however, no practice of the purchaser alone signing an agreement of sale.

An agreement of sale comes into existence when the vendor agrees to sell and the purchaser agrees to purchase,for an agreed consideration on agreed terms.

• It can be oral.

• It can be by exchange of communications which may or may not be signed.

• It may be by a single document signed by both parties.

• It can also be by a document in two parts, each party signing one copy and then exchanging the signed copy as a consequence of which the purchaser has the copy signed by the vendor and a vendor has a copy signed by the purchaser.

• Or it can be by the vendor executing the document and delivering it to the purchaser who accepts it.

• Section 10 of the Act provides all agreements are contracts if they are made by the free consent by the parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void under the provisions of the Contract Act.

Supreme Court - Time is not an Essence of Contract, However, if the parties agreed to a specified time in the agreement to perform their part of the Contract, then time is the essence of the Contract and parties shall adhere to the same.

 In the Matter of  I.S.Sikandar (D) By Lrs.& Ors vs K.Subramani & Ors Complaint no. Civil Appeal no. 7306 OF 2013 // (Arising out of SLP(C) No. 20367 of 2009) decided on  29.08.2013 before Supreme Court of India

The Court Observed that.

This position of law is well settled by this Court in the Constitution Bench judgment in Smt.Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani(dead) by LRs. Appeal (civil)  3377 of 1979 decided on 18/12/1992 ; wherein this Court has held that it is a well settled principle of law, that in a case of sale of immovable property, time is not the essence of the contract. 

However, If the parties agreed to a specified time in the agreement to perform their part of the contract, then time is the essence of the contract and parties shall adhere to the same.

The Court also relied on the statement in Chand Rani Vs. Smt. Kamal Rani(supra) case whereas it was mentioned 

“It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.””

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Supreme Court - Consumer disputes are non-arbitrable, in the presence of Special act like the Consumer Protection Act.

 In the Matter of M/S Emaar Mgf Land Limited vs Aftab Singh Complaint no. (2019) 12 SCC 751 decided on 10.12.2018 before Supreme Court of India

The appeals were filed challenging the order of National Consumer Disputes Redressal Commission (NCDRC) in Aftab Singh v. Emaar MGF Ltd., 2017 SCC OnLine NCDRC 1614 holding consumer disputes to be non-arbitrable.The respondent entered into a buyer’s agreement with the petitioner company for the purchase of a villa in the township to be developed by them. Dispute arose regarding the same. The respondent filed a complaint with NCDRC under Consumer Protection Act, 1986 for certain reliefs in the matter. The company relied on the arbitration clause provided in the agreement and filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the matter to arbitration. This application was rejected by NCDRC. The company filed appeals against NCDRC order which was dismissed by the Delhi High Court as well as the Supreme Court.

The Hon'ble Supreme Court considered the provisions of Consumer Protection Act, 1986 & Once the public Statute is in place, Arbitration & Conciliation act 1996 can not be resorted to.It was observed that , “….complaint under Consumer Protection Act being a special remedy, despite there being an arbitration agreement the proceedings before Consumer Forum have to go on….”  Thus, it was held that the Consumer Protection Act being special legislation, NCDRC was right in rejecting the company's application under Section 8 of Arbitration Act. Therefore, the review petition was dismissed.

NCDRC - The Developer having received the sales consideration Cannot Charge Holding charges from the Allottee for the delay in taking possession.

 In the Matter of Capital Greens Flat Buyer Association & Ors. Vs. DLF Universal Limited & Anr Complaint no.Consumer case no. CC/2047/2016 decided on 03.01.2020 before National Consumer Disputes Redressal Commission

The NCDRC Observed that

36. ………………...As far as holding charges are concerned, The Developer having received the sales consideration has nothing to lose by holding possession of the allotted flat except that it would be required to maintain the apartment.Therefore the holding charges will not be payable to the developer. Even in a case where the Possession has been delayed on account of the allottee having not paid the entire sale consideration, the developer shall not be entitled to any holding charges though it would be entitled to interest for the period the payment is delayed.

in Civil Appeal CA 3864-3889/2020 Order dated 14.12.2020 the Supreme court has Upheld all directions of NCDRC except two 

(i) The compensation on account of delay in handing over possession of the flats to the flat buyers is reduced from 7% to 6%; and

(ii) The direction for the refund of parking charges and club charges and interest on these two components shall stand set aside.

NCDRC - compensation to the complainant company cannot be at par with that to an individual.The company is not entitled to compensation for the mental agony and harassment to which an individual is entitled

 In the Matter of Springdale Core Consultants Pvt Ltd vs. Pioneer Urban Land and Infrastructure Ltd Complaint no, Consumer case no. 349/2017 decided on 14.07.2020 before National Consumer Disputes Redressal Commission.

The Complainant company booked a residential apartment for its Directors in the Builders project on 29.11.2011. An agreement for sale dated 13.03.2012 was executed between the parties. Under the agreement, the Builder had to apply for Occupancy certificate by 04.09.2015 and obtain the OC by 04.03.2016. The builder could not obtain OC within agreed time. The Complainant filed a complaint seeking possession of the flat along with the compensation for delay in construction. Alternatively, the complainant company prayed for refund of the amount paid to the Builder. During the pendency of the complaint, the Builder obtained OC and offered possession to the complainant company vide letter dated 03.04.2019. 

Issue before NCDRC: 

(i) Whether the flat booked by the Complainant company for its Directors was booked for speculative purposes? 

(ii) Whether the Complainant company is entitled to any compensation in the form of interest for delay in possession of flat?

It placed reliance on the resolution passed by its board of directors on 14.11.2011, resolving to book flat for the residence of one of the directors of the company. Accordingly, the complainant argued that the purchase of flat was not for speculative purposes. 

Builder’s contentions: 

1. Since the complainant is a private limited company resolution may have been manufactured at a later date. 2. As per the information provided by the Registrar of companies, the business activities of the complainant company were confined to Amritsar and all the Directors were residents of Amritsar. A director was also a partner of LLP engaged in the business of Real estate. 

3. The compensation for the delay in delivery of the possession where the complainant is a company should not be at par with the compensation granted to an individual. 

4. Submitting the lease deeds, the builder showed the prevailing rentals in the project. They stated that there would be no justification for compensation higher than the prevailing rentals in the project.

5. Builder also claimed for holding charges from the complainant company.

Verdict of NCDRC: 

NCDRC directed the Builder to hand over the possession of flat to the complainant company within 8 weeks from the date of order. The court also awarded compensation to the complainant company. It rejected the Builder’s contention that the flat in question was for speculative purposes. It observed that the Director became a partner in the LLP in the year 2017 and the flat in question was booked earlier in the year 2011. Secondly, she was residing at Gurgaon and was planning to shift to Gurgaon even if she was residing at Amritsar. Therefore, it is difficult to infer that the flat was booked for speculative purposes 

The Commission relied on the decision of Vishal Malik & Anr. Vs. Pioneer Urban Land Infrastructure Ltd 1 , to direct possession of flat along with the compensation. The commission agreed with the Builder that the compensation to the complainant company cannot be at par with that to an individual. 

The company is not entitled to compensation for the mental agony and harassment to which an individual is entitled. On quantum of compensation, NCDRC stated that the prevailing rents in respect of similarly situated flats of identical specifications and size cannot be made the sole basis for grant of such compensation. Else the builder would have no incentive to complete the construction within the agreed time frame. He would know that even if he diverts the funds collected from the flat buyer to another project, he would easily compensate the buyer which would not cost him more than 3-4% of the capital employed. 

NCDRC placed reliance on the decision of Capital Greens Flat Buyer Association & Ors. Vs. DLF Universal Limited & Anr 2 to observe that the builder is not entitled to holding charges. Since the builder having received the consideration has nothing to lose by holding possession of flat except to maintain the apartment.