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TMI Blog2017 (12) TMI 1580X X X X Extracts X X X X X X X X Extracts X X X X ..... 4419, 4692 and 19157 of 2017 along with other connected matters, if any, pending in the High Court, together. We request the Chief Justice of the High Court of Bombay to assign the cases to a particular Bench for expeditious decisions of the matters. Let matters be decided with two months. Consequently the Transfer Petitions are disposed of." 3. In this batch of Writ Petitions, petitioners had challenged legality and constitutional validity of certain provisions of the Real Estate (Regulation and Development) Act, 2016 (for short " the RERA") as being violative of the provisions of Articles 14, 19(1)(g), 20 and 300A of the Constitution of India. The petitioners prayed for a declaration that the first proviso to Section 3 (1), Section 3 (2)(a) & (c), Explanation to Section 3, Sections 4(2)(c) & 4(2) (d) (e) (f) (g) (k), Sections 4 (2) (l) (C) and 4 (2) (l) (D), Sections 5(1)(b), 5 (3) and the first proviso to Section 6 of the RERA are unconstitutional, illegal, ultra vires, without jurisdiction and without authority of law. The petitioners have also challenged validity of provisions of Sections 4, 5, 7, 8, 11 (h), 14 (3), 15, 16, 18, 22, proviso to Section 27(1)(a), Section 40, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1986 is available as a forum to the buyers in the real estate market, the recourse is only curative and is not adequate to address all the concerns of buyers and promoters in that sector. The lack of standardization has been a constraint to the healthy and orderly growth of industry. Therefore, the need for regulating the sector has been emphasised in various forums. 2. In view of the above, it becomes necessary to have a Central legislation, namely, the Real Estate (Regulation and Development) Bill, 2013 in the interests of effective consumer protection, uniformity and standardization of business practices and transactions in the real estate sector. The proposed Bill provides for the establishment of the Real Estate Regulatory Authority (the Authority) for regulation and promotion of real estate sector and to ensure sale of plot, apartment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in real estate sector and establish the Real Estate Appellate Tribunal to hear appeals from the decisions, directions or orders of the Authority. 3. The proposed Bill will ensure greater accountability towards consumers, and sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r persons and includes his assignees; or (ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or (iii) any development authority or any other public body in respect of allottees of - (a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or (b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or (iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or (v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate project shall be required - (a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases: Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act; (b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act; (c) for the purpose of renovation or repair or redevelopment which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project. Explanation.- For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand alone real estate project, and the promoter shall obtain registration under this Act for each phase separately. Section 4. Application for registration of real estate projects.- (1) Every promoter shall make an application t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his web page and to fill therein the details of the proposed project; or (b) reject the application for reasons to be recorded in writing, if such application does not conform to the provisions of this Act or the rules or regulations made thereunder: Provided that no application shall be rejected unless the applicant has been given an opportunity of being heard in the matter. (2) If the Authority fails to grant the registration or reject the application, as the case may be, as provided under sub-section (1), the project shall be deemed to have been registered, and the Authority shall within a period of seven days of the expiry of the said period of thirty days specified in sub-section (1), provide a registration number and a Login Id and password to the promoter for accessing the website of the Authority and to create his web page and to fill therein the details of the proposed project. (3) The registration granted under this section shall be valid for a period declared by the promoter under sub-clause (C) of clause (1) of sub-section (2) of section 4 for completion of the project or phase thereof, as the case may be. Section 6. Extension of registration.- The registration g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 5 shall not be revoked unless the Authority has given to the promoter not less than thirty days notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered any cause shown by the promoter within the period of that notice against the proposed revocation. (3) The Authority may, instead of revoking the registration under sub-section (1), permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter. (4) The Authority, upon the revocation of the registration, - (a) shall debar the promoter from accessing its website in relation to that project and specify his name in the list of defaulters and display his photograph on its website and also inform the other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration; (b) shall facilitate the remaining development works to be carried out in accordance with the provisions of section 8; (c) shall direct the bank holding the project bank account, specified under sub-clause (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and he claim for compensation under this sub-section shall not be barred by limitation provided under any law for the time being in force. (3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act. Section 22. Qualifications of Chairperson and Members of Authority.- The Chairperson and other Members of the Authority shall be appointed by the appropriate Government on the recommendations of a Selection Committee consisting of the Chief Justice of the High Court or his nominee, the Secretary of the Department dealing with Housing and the Law Secretary, in such manner as may be prescribed, from amongst persons having adequate knowledge of and professional experience of at least twenty years in case of the Chairperson and fifteen years in the case of the Members in urban development, housing, real estate d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be entertained, without the promoter first having deposited with the Appellate Tribunal at-least thirty per cent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard. Explanation. - For the purpose of this sub-section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force. Section 45. Composition of Appellate Tribunal.- The Appellate Tribunal shall consist of a Chairperson and not less than two whole time Members of which one shall be a Judicial member and other shall be a Technical or Administrative Member, to be appointed by the appropriate Government, - Explanation.- For the purposes of this Chapter,- (i) "Judicial Member" means a Member of the Appellate Tribunal appointed as such under clause (b) of sub-section (1) of section 46; (ii) "Technical or Administrative Member" means a Member of the Appellate Tribunal appointed as such under clause (c) of sub-section (1) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal Estate Regulatory Authority (General) Regulations, 2017, which were notified on 24-4-2017. The learned counsel appearing for the Union informed that many States had framed Rules and Regulations in exercise of powers conferred under RERA. 11. By an Act of Parliament, a Regulatory Authority was established for the regulation and promotion of the real estate sector to ensure sale of plot, apartment, building or sale of real estate project, in an efficient and transparent manner. The Act aims at protecting interest of consumers in the real estate sector by establishing an adjudicating mechanism for speedy redressal of disputes. The Act establishes an Appellate Tribunal to hear appeals arising out of decisions, directions or orders of the Real Estate Regulatory Authority. 12. We would deal with the specific challenges made to the validity of the provisions of the RERA. SUBMISSIONS ON BEHALF OF THE PETITIONERS IN WRIT PETITION NO. 2737 OF 2017 (WPL/2010/2017): 13. The learned Senior Counsel Mr. Aspi Chinoy appeared for the petitioners - Neelkamal Realtors Suburban Pvt. Ltd. and anr. The learned counsel referred to various provisions of the RERA. The learned counsel has taken a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd allottees. 15. In respect of the provisions of Section 6, regarding extension of registration, the learned counsel submitted that though the promoter has been given a liberty to declare the tenure during which the project will be completed while getting the project registered, the extension of registration granted under Section 5 by the authority is restricted to a period of one year. This, in the submission of the learned counsel, is unreasonable and arbitrary provision which fails to take into consideration circumstances which are beyond the control of the promoter while carrying out the developmental work. The counsel submitted that under the provisions of Section 6, a relaxation is prescribed for extension of period of registration in case the promoter applies for extension due to force majeure. The explanation to Section 6 states that expression "force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project. In the submission of the counsel, the authority ought to have been given discretion to consider application made by the promoter for extension of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he handing over of the possession at such rate as may be prescribed. The learned counsel submitted that mandate to pay interest and compensation under Section 18 be held to be unreasonable, arbitrary and unconstitutional. In the alternative, the counsel submitted that at the most the promoter may be directed to pay interest in respect of the delay in handing over of possession to the allottee from the date of registration and not from the date of agreement of sale entered into by him and the allottee. The provisions of Section 18 are retro-active in nature which affects the past transaction entered into between the promoter and allottee prior to registration of the project under RERA. The counsel submits that the provisions are unworkable. 19. The learned Senior Counsel places reliance on the judgments of the Supreme Court as well as Kolkata High Court and this court. We may refer the said judgments :- (a) In the case of Saghir Ahmad and anr. v. State of U.P. and ors. [AIR 1954 SC 728], the Apex Court, in paras (22) & (23) observed thus: "(22).........In order to judge whether State monopoly is reasonable or not, regard therefore must be had to the facts of each particular case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll actions taken thereunder may be taken to their logical conclusion. A citizen of India has a right to carry on a profession or business as envisaged by Article 19(1)(g) of the Constitution of India. Any restriction imposed thereupon must be made by reason of a law contemplated under Clause (6) thereof. In the absence of any valid law operating in the field, there would not be any source for imposing penalty. A right to carry on trade is a constitutional right. By reason of the penalty imposed, the Board inter alia has taken away the said constitutional right for a period of ten years which, in our opinion, is impermissible in law as the Regulations were not attracted." (c) In the case of Madras Forging and Allied Industries (C.B.C.) Ltd. v. Suresh Chandra and anr. [[1992] 73 Comp Cas 385(Cal)], the Division Bench of the Kolkata High Court, in paras 13, 14 and 17 observed thus:- 13. The question is whether the Amendment Act of 1988 has retrospective operation. The general principle is that unless a contrary intention appears, an enactment is presumed not to be intended to have retrospective operation. The essential idea of legal system is that current law should govern current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to any anterior event, status or characteristic; (ii) Retrospective statute, on the other hand, operates backwards, attaches new consequences, though for the future, but to an event that took place before the statute was enacted. It takes away vested rights. Substantive benefits which were already obtained by a party are sought to be taken away because of legislation being given effect to from a date prior to its enactment. The Rules of Interpretation of Statute raise a presumption against such retrospective effect to a legislation. In other words, if the Legislature has not expressly or by necessary implication given effect to a statute from a date prior to its enactment, the Court will not allow retrospective effect being given to a legislation so as to take away the vested rights. Statutes enacted for regulating succession are ordinarily not applicable to successions which had already opened, as otherwise the effect will be to divest the estate from persons in whom it had vested prior to coming into force of the new statutes. Muhammed Abdus Samad v. Qurban Hussain, ILR (26) All. 119 (129) P.C. (iii) There is the intermediate category called "Retroactive Statute" which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SUBMISSIONS ON BEHALF OF THE PETITIONERS IN WRIT PETITION NO. 2711 OF 2017 (WPL NO. 1965/2017): 20. The learned Senior Counsel Mr. S.U. Kamdar advanced submissions in respect of the challenges made to the provisions of Sections 6, 7, 8 and 18 of the RERA. The learned Senior Counsel submitted that under RERA, interest of the promoter has not been taken into consideration. The provisions could be used for taking action against the promoter in not completing the project, even for reasons beyond the control of the promoter. The provisions relating to obligation put on the promoter to pay interest and compensation to allottee are penal in nature as they affect transaction prior to registration of the project under Section 3 of the RERA. There is no provision made in the RERA to refund the money invested by the promoter in the project in case the promoter desires to leave the project or his registration gets cancelled. The counsel compared the provisions of the Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (for short MOFA) and the RERA. In the submission of the learned counsel, under Section 8 of the MOFA if promoter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that after completion of the project and after receiving completion certificate, the promoter has to transfer title to the flat purchasers. In the absence of return of the project and handing over the possession, the promoter can never comply with its obligations under Section 17 of RERA. There can be no sale of property by the RERA authority in the nature of unsold flats unless and until the provisions of Section 8 empowers and vests the property in the RERA authority with a right to sell the same. The said provisions are expropriatory in nature and are violative of Article 300-A of the Constitution of India. If in any project flats remain unsold, then such unsold flats would be property of the promoter. Upon Section 8 coming into play, the promoter immediately loses its right to sell or dispose of any of the unsold flats and also to collect balance 30% payments due to it in relation to the flats already sold. The authority while exercising powers conferred on it under Section 8 may sell or deal with or dispose of unsold flats for the purpose of generating funds for completion of the balance work which is violative of promoter's constitutional rights under Article 300-A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Uttarakhand and ors. [(2011) 8 SCC 708], the Supreme Court observed in paras 69, 70, 78 and 82 as under : "69. With regard to claiming compensation, all modern Constitutions which are invariably of democratic character provide for payment of compensation as the condition to exercise the right of expropriation. The Commonwealth of Australia Constitution Act, the French Civil Code (Article 545), the 5th Amendment to the Constitution of U.S.A. and the Italian Constitution provided principles of "just terms", "just indemnity", "just compensation" as reimbursement for the property taken, have been provided for. 70. Under Indian Constitution, the field of legislation covering claim for compensation on deprivation of one's property can be traced to Schedule VII List III Entry 42 of the Constitution. The Constitution (Seventh Amendment) Act, 1956 deleted Schedule VII List I Entry 33, List II Entry 36 and reworded List III Entry 42 relating to "acquisition and requisitioning of property". The right to property being no more a fundamental right, a legislation enacted under the authority of law as provided in Article 300-A of the Constitution is not amenable to judicial revie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in Kavalappara Kottarathil Kochuni case, E.P Royappa v. State of T.N., Maneka Gandhi v. Union of India, Ramana Dayaram Shetty v. International Airport Authority of India, Kasturi Lal Lakshmi Reddy v. State of J & K." (c) In the case of Cellular Operators Association of India and ors. v. Telecom Regulatory Authority of India and ors. [(2016) 7 SCC 703], the Supreme Court in paras 42, 43, 46, 48, 53 and 89 observed as under :- "42. We have already seen that one of the tests for challenging the constitutionality of subordinate legislation is that subordinate legislation should not be manifestly arbitrary. Also, it is settled law that subordinate legislation can be challenged on any of the grounds available for challenge against plenary legislation -(See: Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India, SCC at p.689, para 75). 43. The test of "manifest arbitrariness" is well explained in two judgments of this Court. In Khoday Distilleries Ltd. v. State of Karnataka, this Court held (SCC p. 314, para 13): "It is next submitted before us that the amended Rules are arbitrary, unreasonable and cause undue hardship and, therefore, violate Article 14 of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is, the choice of a course which reason dictates. Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in article 19(1)(g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in that quality." 48. Similarly, the first amendment to the Constitution also amended Article 19(6), with which we are directly concerned, to provide for a State monopoly, which would not have to be tested on the ground of reasonable restrictions. Therefore, the first amendment to the Constitution of India has made it clear that reasonable restrictions, added in Article 19(2) and subtracted from Article 19(6) (insofar as State monopolies are concerned), point to the fact that this test is a test separate and distinct from the test of the law being in the interest of the general public. Why we are at pains to point this out is because the learned Attorney General's argument focused primarily on the Impugned Regulation being in the public interest. He referred to Delhi Science Forum v. Union of India, for the proposition that TRAI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 71) "The law sometimes can be written in such a subjective manner that it affects the efficiency and transparent function of the Government. If the statute provides for pointless discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law-making, be it in the context of delegated legislation or primary legislation, has to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other. These are fundamental tenets flowing from due process requirement under Article 21, equal protection clause embodied in Article 14 and fundamental freedoms clause ingrained under Article 19. A modern deliberative democracy cannot function without these attributes." (d) In the case of Hitendra Vishnu Thakur and ors. v. State of Maharashtra and ors. [(1994) 4 SCC 602], in para 26, the Supreme Court observed thus: "26. The Designated Court has held that the amendment would operate retrospectively and would apply to the pending cases in which investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant provisions of the relevant statutes and the rules, mentioned hereinbefore, are, in my opinion, on these points, not expressive enough to betray an intention to transgress constitutional limitations. I am afraid that reference to Elliott Ashton Welsh, II v. United States, is inept in the background of the principles we are confronted with. The plain thrust of legislative enactment has to be found out in the inarticulate expressions and in the silence of the legislation. In doing so, to say what the legislature did not specifically say, is not distortion to avert any constitutional collision. In the language of the relevant provisions with which we are confronted, I do not find that intention of the legislature to flout the Constitutional limitations." SUBMISSIONS ON BEHALF OF THE PETITIONERS IN WRIT PETITION NO. 2255 OF 2017 : 27. Writ Petition No. 2255 of 2017 was originally filed before the Bench at Nagpur. The petitioner therein had challenged validity of first proviso to Section 3(1), Section 3(2)(a), Explanation to Section 3, Section 4(2)(l)(D). Apart from the constitutional challenge to the provisions of Sections 3 and 4, the petitioner had prayed for a declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate in the form prescribed in the bye-laws signed and subscribed in the manner so prescribed, and shall give to the Commissioner all necessary facilities for the inspection of such building or of such work and shall apply for permission to occupy the building. (2) No person shall occupy or permit to be occupied any such building, or use or permit to be used the building or part thereof affected by any work, until - (a) permission has been received from the Commissioner in this behalf, or (b) the Commissioner has failed for twenty-one days after receipt of the notice of completion to intimate his refusal of the said permission. 28. It was submitted that as the project of the petitioner is complete, the petitioner cannot comply with the conditions of 70% deposit of the amount realized from the proposed allottees. In the submission of the learned counsel 80% of the work is already complete and the members are residing there after getting possession of their respective unit. It would be injustice to the petitioner to get itself registered under RERA. The counsel submitted that provisions of RERA shall not be implemented retrospectively to affect projects like the petitioner. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at whenever an authority would discharge adjudicatory functions, presence of Judicial Member has been held to be mandatory. The learned counsel places reliance on para 106 of the judgment in the case of Madras Bar Association (Supra), which reads as under :- "106. We may summarise the position as follows : (a) A legislature can enact a law transferring the jurisdiction exercised by courts in regard to any specified subject (other than those which are vested in courts by express provisions of the Constitution) to any tribunal. (b) All courts are tribunals. Any tribunal to which any existing jurisdiction of courts is transferred should also be a judicial tribunal. This means that such tribunal should have as members, persons of a rank, capacity and status as nearly as possible equal to the rank, status and capacity of the court which was till then dealing with such matters and the members of the tribunal should have the independence and security of tenure associated with judicial tribunals. (c) Whenever there is need for "tribunals", there is no presumption that there should be technical members in the tribunals. When any jurisdiction is shifted from courts to tribunals, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence placed on record, frame proper issues, deal with the submissions of the contesting parties and pass a reasoned order, which exercise is not expected from non-judicial members. The learned counsel specifically challenged the provisions of Sections 3(1) and 3 to 8 of RERA. It was submitted that the RERA does not provide for provisions regarding assessment of cost of project and further necessary details regarding execution of the project. The explanation provided to Section 3 is arbitrary and its application would adversely affect the promoter's interest. The learned counsel further referred to provisions of Sections 4(2)(l)(C)(D) and Section 19(7), (8), (9) of the RERA. The learned counsel submitted that the ongoing project shall not be made to register under the RERA as it would be affecting the past transactions of the parties and consequently the promoter's interest. The provisions are contrary to Articles 14 and 19(1)(g) of the Constitution. In respect of the interpretation on Section 6 of the RERA, the learned counsel adopted the submissions of the learned Senior Counsel Mr. Aspi Chinoy. SUBMISSIONS ON BEHALF OF THE PETITIONERS IN WRIT PETITION NOS. 2256/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso to Section 6 prescribes that the authority could extend the registration period granted to a project not exceeding a period of one year. For timely completion of the remaining development work, such a restriction is necessary otherwise on one or the other ground, completion of the remaining development work could be further delayed for a indefinite period. The provisions were thoughtfully made, keeping in mind the interest of the allottees who have been waiting for getting possession of their apartments/residential houses since last several years in various cities of the country. After paying substantial amount to the promoter the allottees are left with no choice than to wait for getting possession. Therefore, keeping in view the object and purpose for which Section 6 was enacted, this court would reject the contention raised by the petitioners, otherwise the purpose for which mandatory period was prescribed would get defeated. REPLY TO CHALLENGE TO SECTION 8 : 36. The learned ASG submitted that in case the registration of the promoter lapses or it is revoked by the authority, then the authority would exercise power under Section 8 for taking action as it may deem fit, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llottees is protected. It is submitted that these provisions are reasonable and do not offend any legal and constitutional provisions. The challenge made to these provisions, therefore, should fail. It was experienced that the various allottees had approached forums like Consumer Forum, Civil Courts, higher courts by filing writ petition under Article 226 of the Constitution of India seeking direction to promoter for various reliefs, including completion of remaining work, withdrawal of amount, payment of interest till handing over possession, monthly compensation while they were in a transit camp etc. The provisions of RERA take care of allottees who had to run from pillar to post for securing their rights. The learned ASG submitted that a mechanism is prescribed for assessing interest and compensation. The Parliament had the legislative competence to frame subject law, particularly the provisions of Section 18, governing the transactions of the promoter and the allottee under the agreement for sale executed between them prior to registration of the project under RERA. There is absolutely no arbitrariness in framing the provisions of Section 18(1)(a) and conferring rights on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as all the rights and liberty to approach the High Court for redressal of their grievances. He submitted that Article 323B of the Constitution does not mandate that Tribunal shall have a judicial member. It must be left to the wisdom of the legislature, which enacted these provisions in the best interest of both, the promoters and the allottees. 43. While replying to comments made in respect of the provisions of penalty appearing under Chapter VIII of the RERA, the learned ASG submitted that interest and compensation to be awarded under Section 18 cannot be termed as penalty. Penalty is to be imposed for reasons where a party violates order passed by the authority/Tribunal. These provisions are made so that timely compliance of the orders passed by the authorities is made. The provisions are in the larger interest of the public, more particularly the helpless allottees who are at the mercy of the promoter after investing their life savings. 44. The learned ASG placed reliance on the affidavit-in-reply, dated 4/10/2017, filed by Mr. Shailesh Jogiani, Under Secretary in the Ministry of Housing and Urban Affairs, Government of India. We may refer to some of the averments made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Industry (FICCI), Confederation of Real Estate Developers' Associations of India (CREDAI), National Real Estate Development Council (NAREDCO) & other Associations working in the field of real estate, on various provisions of the Bill. (v) The Standing Committee also had the briefing of the representatives of the erstwhile Ministry of Housing & Urban Poverty Alleviation (now Ministry of Housing & Urban Affairs), Ministry of Finance, Reserve Bank of India, National Housing Bank, Ministry of Consumer Affairs, Ministry of Law and Justice (Department of Legal Affairs and Legislative Department), State Bank of India and other Banks. The Committee also heard views of NGOs working in the field of real estate and sought clarifications on various issues. (vi) The Report of the Standing Committee was tabled in the Rajya Sabha on 13th February, 2014 and in the Lok Sabha on 17th February, 2014. (vii) The Union Cabinet approved Official Amendments to the Real Estate (Regulation and Development) Bill, 2013, based on the recommendations of the Standing Committed of Urban Development and stake-holder's suggestions on 7th April, 2015. (viii) The Real Estate (Regulation and Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de new timelines for project completion. As per section 59 if the Promoter does not register his project with the Regulatory Authority as per section 3(1) and within the timeline he would be liable to monetary penalty. In case the promoter continues not to register in-spite of the directions of the Authority he may in that scenario be liable to additional monetary penalty or imprisonment or both. The penalty for violation of section 3 is for non-action after the commencement of the Act and not for action/in-action prior to the commencement of the Act. 90. As regards the challenge on the ground of violation of Article 14 or purported unworkability of the Act, one only needs to see the number of registrations that have taken place without demur to appreciate that such a challenge has actually no legs to stand on. As on the present date the following are the related figures for the State of Maharashtra:- (a) Total Registered Projects : 13414 (b) Total Ongoing Projects : 12608 (c) Total New Projects : 806 45. The learned ASG places reliance on the judgments of the Supreme Court. We may refer the said judgments :- (a) In the case of Binoy Viswam v. Union of India and ors. [(201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onferred by sub-cl. (g) of cl. (1) of Art. 19. Obviously it is left to the court in case of a dispute to determine the reasonableness of the restrictions imposed by the law. In determining that question the court cannot proceed on a general notion of what is reasonable in the abstract or even on a consideration of what is reasonable from the point of view of the person or persons on whom the restrictions are imposed. The right conferred by sub-cl. (g) is expressed in general language and if there had been no qualifying provision like cl. (6) the right so conferred would have been an absolute one. To the persons who have this right any restriction will be irksome and may well be regarded by them as unreasonable. But the question cannot be decided on that basis. What the court has to do is to consider whether the restrictions imposed are reasonable in the interest of general public. In State of Madras v. V.G. Row, this Court laid down the test of reasonableness in the following terms:(AIR p. 200, para 15) "It is important in this context to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e enjoyment of the right should not be arbitrary or of an excessive nature beyond what is required in the interests of public. Further, in order to be reasonable, the restriction must have a reasonable relation to the object which the legislation seeks to achieve, and must not go in excess of that object (See P.P. Enterprises v. Union of India). At the same time, reasonableness of a restriction has to be determined in an objective manner and from the standpoint of the interests of the general public and not from the point of view of the persons upon whom the restrictions are imposed or upon abstract considerations (see Mohd. Hanif Quareshi v. State of Bihar). In M.R.F. Ltd. v. State of Kerala, this Court held that in examining the reasonableness of a statutory provision one has to keep in mind the following factors: (1) The Directive Principles of State Policy. (2) Restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. (3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncroach upon the field covered by the other. The laws made by the legislature have to conform to the Constitutional provisions. Submissions have also been made on behalf of the petitioners that by enacting law with retrospective effect, the legislature has no power to take away vested rights. The contention urged is that the rights created as a result of issue of writ of mandamus cannot be taken away by enacting laws with retrospective effect. On the other hand, it was contended on behalf of the respondent-State that the power of the legislature to enact law with retrospective effect includes the power to take away vested rights including those which may be created by issue of writs. 34. Every sovereign legislature possesses the right to make retrospective legislation. The power to make laws includes power to give it retrospective effect. Craies on Statute Law (7th Edn.) at page 387 defines retrospective statutes in the following words. "A statute is to be deemed to be retrospective which takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect to transactions or consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions.....The Court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary". (g) In the case of Amrit Banaspati Co. Ltd. v. Union of India and ors. [(1995) 3 SCC 335], the Supreme Court, in para 6, observes as under: "6. It is settled law that the allegations regarding the violation of constitutional provision should be specific, clear and unambiguous and should give relevant particulars, and the burden is on the person who impeaches the law as violative of constitutional guarantee to show that the particular provision is infirm for all or any of the reasons stated by him. In the recent decision of this Court Gauri Shanker and ors. v. Union of India to which both of us were parties, it was reiterated that- (a) there is always a presumption in favour of the Constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the Constitutional principles; (b) it must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the RERA. The learned AG has assisted the court in putting up his views on the interpretational aspect from the point of view of the State Government. The learned AG submitted that under the provisions of RERA, there is no acquisition of project by the authority nor vesting of the title of the project in the authority. 47. The learned AG submitted that the legislature has a competence to rewrite a contract executed by the private parties. There is no constitutional guarantee that private contract entered between the parties could not be subject matter of legislative mandate in the larger public interest. It was submitted that after accepting huge amount from the allottees if the promoter for whatever reasons was not handing over possession, then the same would amount to breach and promoter will have to pay interest to the allottee. It cannot be termed a penal consequence. The learned AG refers to Section 9 of the MOFA and provisions of RERA and the Rules framed by the State in this regard. It is submitted that under MOFA, 9% interest is to be paid by the promoter and under RERA it is 8+2 i.e. 10% from the date money is received by the promoter from the allottee till handing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower of control is an incident of the society's right to self-protection and it rests upon the right of the State to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime (pp.539, 540, 541)." 51. The learned AG further places reliance on the judgment in the case of M/s. Raghubar Dayal Jai Prakash v. the Union of India And Others [AIR 1962 SC 263]. Para 25 of the said judgment reads as under:- "25. Learned Counsel referred us to some decisions of the Supreme Court of the United States but to these we do not consider it necessary to advert. Article 1, Section 10 (1), of the American Constitution lays a ban on the enactment by the States of inter alia "any ex post-facto law or low impairing the obligation of contracts, or grant any title of nobility" Our Constitution-makers while making provision against "ex post-facto laws" in Art. 20(1) and "against titles" in Art. 18(1), studiously refrained from including a guarantee regarding the impairment of obligations of contracts. There is therefore no scope for the argument that a law which affects or varies rights under a contract is for that reason constitutionally invalid as an unr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual statute impugned', and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict." 52. The learned AG next places reliance on the Full Bench decision of Nagpur Bench of this Court in the case of Sheoshankar v. State Govt. of Madhya Pradesh and ors. [AIR (38) 1951 Nagpur 58]. Paras 60 and 65 of the said judgment read as under:- "60. The learned author (American Constitutional Law, 1937, pages 84, 86) summarizes these self-imposed limitations thus: "Acceptance of the exercise of the power by the Courts is in part attributable to the caution with which these have wielded it. The following rules have been laid down to govern the exercise of the power: 1. Questions as to constitutionality will not be passed upon unless they are essential to the decision in the case. 2. One who relies on the invalidity of a statute has the burden of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. D.J. Khambata to assist the court as an Amicus Curiae. On his accepting our request, he was appointed as Amicus Curiae by an order dated 30/10/2017 along with Ms. Naira Jejeebhoy and Mr. Pheroze F. Mehta. 54. The learned Senior Counsel Mr. Khambata had broadly described the scheme of the RERA. The purpose and object of enacting the law. The counsel had dealt with specific challenges raised regarding constitutional validity of certain provisions by the petitioners and placed on record certain judgments on the relevant issues emerging from the arguments and discussions made in the court during the course of hearing of these petitions. The learned Senior Counsel submitted that the constitutionality of various provisions of RERA has been broadly challenged on three grounds, namely, (a) Retrospective/retro-active application of certain provisions; (b) Unreasonable restrictions (under Article 19(1)(g) read with Articles 19(6)) imposed by certain provisions and arbitrariness of certain provisions (violating Article 14); (c) Mandatory requirement of a Judicial Member in the Authority and on the Appellate Tribunal. 55. It was submitted by the learned Senior Counsel that the retrosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to ascertain true nature of the legislation having due regard to relevant factors such as the history of the legislation, its purpose, the surrounding circumstances and conditions, mischief, its intent etc. SECTION 6 OF RERA : 59. This provision puts a reasonable restriction when considered in the context of public interest. If the promoter is genuinely suffering hardship as a consequence of the lapse of registration under Section 6, this hardship can also be alleviated by the Authority while passing an order under Section 8 or while giving directions under Section 37 of RERA. The time limit prescribed by Section 6 is reasonable and has been imposed in public interest. 60. The learned Senior Counsel, in the alternative, submitted that although Section 6 provides that registration may be extended for an aggregate period of one year, it is possible to exclude from the total period of registration the time that has lapsed due to a court injunction, by applying principle "Actus Curiae Neminem Gravabit" [Raj Kumar Dey v. Tarapada Dey - AIR 1987 SC 2195]. SECTION 18 OF RERA : 61. The obligation imposed on the promoter to pay interest until such time as the flat is handed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in Chapter VIII (Sections 59 to 68) apply to offences committed after the commencement of RERA. The requirement to pay interest under Section 18 of the RERA is not a penalty since payment of interest is compensatory in nature in the light of the delay being suffered by the flat purchaser, who had paid for his flat but did not get the possession. Even assuming that the interest is penal in nature, the levy of interest is not retrospective but is only based on antecedent facts; it operates prospectively. The interest payable under Section 18 as per the definition of interest in Section 2(za) Explanation (ii), is the same interest that would have been payable by the flat purchaser for causing delay in payment. WHETHER SECTION 18 IS CONTRARY TO ARTICLE 20 OF THE CONSTITUTION : 65. The provisions of Section 18 were framed to be an effective deterrent to stop practices which the Legislature considers against public interest. The learned Senior Counsel, in the alternative, submitted that in case the court decides that Section 18 is penal in nature affecting the contractual rights entered into between the parties prior to its registration, then the provisions of Section 18 could be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [AIR 1961 SC 307], the Supreme Court, in paras 6 and 7 observed as under : "6. At the hearing before us, the respondent was not represented. We have heard Mr. Dhebar in support of the appeal, and, in our opinion, the High Court was not right in the view it had taken of s. 57 of the Act. The question whether an enactment is meant to operate prospectively or retrospectively has to be decided in accordance with well- settled principles. The cardinal principle is that statutes must always be interpreted prospectively, unless the language of the statutes makes them retrospective, either expressly or by necessary implication. Penal statutes which create new offences are always prospective, but penal statutes which create disabilities, though ordinarily interpreted prospectively, are sometimes interpreted retrospectively when there is a clear intendment that they are to be applied to past events. The reason why penal statutes are so construed was stated by Erle, C. J., in Midland Rly. Co. v. Pye (1861) 10 C.B. NS 179 at p. 191) in the following words: "Those whose duty it is to administer the law very properly guard against giving to an Act of Parliament a retrospective operation, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt's judgments. Thus in Province of Bombay v. Kushaldas S. Advani, it was held: (SCR p. 725: AIR pp. 259-60, para 173) "173.......... (i) That, if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie, and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and, (ii) that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially." 14. This statement of the law has been followed in Shivji Nathubhai v. Union of India, where the question which faced the Supreme Court w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on hand and hence, it is extracted as follows: "It is emphatically the province and duty of the Judicial Department to say what the law is ......If two laws conflict with each other, the Courts must decide on the operation of each...... " (f) In the case of Bank of India and anr. v. K. Mohandas and ors. [(2009) 5 SCC 313], in para 54, the Supreme Court observed as under : "54. A word about precedents, before we deal with the aforesaid observations. The classic statement of Earl of Halsbury, L.C. in Quinn v. Leathem, is worth recapitulating first (AC p.506): "......before discussing Allen v. Flood and what was decided therein, there are two observations of a general character which I wish to make; and one is to repeat what I have very often said before that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es emerge: (i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34, Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator. (ii) an arbitrator is an alternative form (sic forum) for resolution of disputes arising between the parties. If so, he must have the power to decide all the disputes or differences arising between the parties. If the arbitrator has no power to award interest pendente lite, the party claiming it would have to approach the Court for that purpose, even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings. (iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief." (j) In the case of Commissioner of Income Tax, Gujarat v. Vadilal Lallubhai, etc. [(1973) 3 SCC 17], the Supreme Court in para 15 observed as under : "15. In order to find out the legislative intent, we have to find out what was the mischief that the legislature wanted to remedy. The Act was extensively amended in the year 1939. Section 44-F was not in the draft bill. That section was recommended by the Select Committee consisting of very eminent lawyers. It will not be inappropriate to find out the reasons which persuaded the Select Committee to recommend the inclusion of s. 44-F, if the section is considered as ambiguous-see Commissioner of Income-tax, Madhya Pradesh and Bhopal v. Sodra Devi etc. In recommending the inclusion of s. 44-F, this is what the Select Committee observed : "The new Sections 44E and 44F are designed to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not noticed in Bidap's case but the decision in Assam Railways & Trading Co. Ltd. relied upon by Mr. Singhvi was specifically referred to. This decision cannot therefore be taken as an authority for the proposition canvassed by Mr. Singhvi. Further even in the land of its birth, the exclusionary rule has received a serious jolt in Black-Clawson International Ltd. v. Paperwork Waldhef Ascheffenburg AC Lord Simon of Claisdale in his speech while examining the question of admissibility of Greer Report observed as under: At the very least, ascertainment of the statutory objective can immediately eliminate many of the possible meanings that the language of the Act might bear and if an ambiguity still remains, consideration of the statutory objective is one of the means of resolving it. The statutory objective is primarily to be collected from the provisions of the statute itself. In these days, when the long title can be amended in both Houses, I can see no reason for having recourse to it only in case of an ambiguity-it is the plainest of all the guides to the general objectives of a statute. But it will not always help as to particular provisions. As to the statutory object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some rights, obligations or impose duties. Before undertaking the exercise of enacting a statute, Parliament can be taken to be aware of the Constitutional principle of judicial review meaning thereby the legislation would be dissected and subjected to microscopic examination. More often an expert committee or a Joint Parliamentary committee examines the provisions of the proposed legislation. But language being an inadequate vehicle of thought comprising intention, the eyes scanning the statute would be presented with varied meanings. If the basic purpose underlying construction of a legislation is to ascertain the real intention of the Parliament, why should the aids which Parliament availed of such as report of a special committee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to court whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation. Such denial would deprive the court of a substantial and illuminating aid to construction. Therefore, departing from the earlier English decisions we are of the opinion that reports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the applicant - Forum for People's Collective Efforts (F.P.C.E.) in Chamber Summons No. 224 of 2017, submitted that the applicant represents the interests of consumers/purchasers in the real estate sector. The members of the applicant initially participated in the process of the preparation of the Real Estate (Regulation & Development) Bill, 2016, by submitting their comments/suggestions on the Bill to the Select Committee that was constituted by the Rajya Sabha to examine the Real Estate (Regulation and Development) Bill, 2013 and the Official Amendments, 2015. Subsequently, the members came together and started a collective effort under the banner "Fight for RERA" with the objective of creating awareness with respect to and petitioning for the adoption and passing of the Bill. SECTION 3 : 70. The imposition of statutory liability or obligation from the date of introduction of the statute is for its requisites, or liabilities with respect to "prior arrangements" does not mean that the statute is being applied retrospectively. There is no imposition of any loss to anyone. Even assuming that there is some restriction imposed on the fundamental right guaranteed by Article 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard relating to the deposit of monies and would thus be governed by the provisions of section 4(2)(l)(D). SECTION 6 : 73. The scheme of RERA and its provisions read as a whole would demonstrate how a promoter is expected to commence/register a project after having proper title, sanctioned plans, permissions, sources of funding etc. Therefore, except in cases of force majeure or extension for a maximum period of one year, the registration will lapse. Under Section 8 of RERA, the authority has wide power to take appropriate action, and in a given case may require the promoter to continue/complete construction, allow him to sell flats, or entrust the completion to the allottees or such third parties as it may deem fit. SECTION 7 : 74. There is no expropriation of property, either by the authority or anyone else, upon the lapsing or revocation of registration, as erroneously contended on behalf of the petitioner. On the authority appointing a new entity or person, the person so appointed to carry out the remaining development work is merely an agency engaged by the authority for that purpose and does not become a promoter in place of the original promoter. Under Section 8, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... language used in Art. 20 is in much wider terms. This Court held that: (AIR p.398, Para 8) "8....... what is prohibited is the conviction of a person or his subjection to a penalty under 'ex post facto' laws. The prohibition under the Article is not confined to the passing or the validity of the law, but extends to the conviction or the sentence and is based on its character as an 'ex post facto' law." (b) In the case of Dilip v. Mohd. Azizul Haq and anr. [(2000) 3 SCC 607], the Supreme Court, in para 9, observed as under : "9. The problem concerning retrospectively concerning enactments depends on events occurring over a period. If the enactment comes into force during a period it only operates on those events occurring then. We must bear in mind that the presumption against retrospective legislation does not necessarily apply to an enactment merely because a part of the requisites for its action is drawn from time antecedent to its passing. The fact that as from a future date tax is charged on a source of income which has been arranged or provided for before the date of the imposition of the tax does not mean that a tax is retrospectively imposed as held in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid., p. 440)." (d) In the case of Shiv Shakti Coop. Housing Society, Nagpur v. Swaraj Developers and ors. [(2003) 6 SCC 659], in para 27, the Supreme Court observed as under : "27. Laws ought to be, and usually are, framed with a view to such cases as are of frequent rather than such as are of rare or accidental occurrence; or, in the language of the civil law, jus constitui oportet in his quae ut plurimum accidunt, non quae ex inopinato; for, neque leges neque senatus consulta ita scribi possunt ut omnis casus qui quandoque in sediriunt comprehendantur, sed sufficit ea quae plaerumque accident contineri; laws cannot be so worded as to include every case which may arise, but it is sufficient if they apply to those things which most frequently happen. All legislation proceeds upon the principle of providing for the ordinary course of things, and to this principle frequent reference is to be found, in the reports, in answer to arguments, often speciously advanced, that the words of an Act cannot have a particular meaning, because i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had approached Consumer Forms, High Court, but the final outcome takes a long time and the ultimate sufferer are the consumers. It is submitted that in some cases possession was not given for more than five years. In the larger public interest the Parliament has passed this law. Keeping in view the object and purpose for which it was enacted, the issues raised by the petitioners be dealt with. Reliance is place on the judgment of the Full Bench of this court in the case of D.R. Patil v. State of Maharashtra and ors. [2010 (1) Mh.L.J. 765]. REASONING : 80. A batch of eight petitions were listed before this court for final disposal. One of the Writ Petitions bearing Writ Petition Lodging No. 2023 of 2017 was disposed of by an order dated 14/11/2017. These remaining 7 petitions raise issue of constitutional validity of certain provisions of RERA. Though in the prayer clauses, the petitioners sought to challenge constitution validity of various provisions of RERA, but during the course of arguments, the learned Senior Counsel appearing for the petitioners advanced submissions in respect of the challenge raised to some of the provisions of RERA. During the course of hearing the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate sector. A joint meeting of all the Housing Ministers of State/Union Territories was held and it was resolved that a Central Legislation be made to regulate the real estate sector in order to infuse transparency in the sector and to protect consumer interest. The UOI had listed various instances which prompted to have a regulatory law on the subject. The real estate sector was unregulated in several States which did not have laws governing the subject at all. According to UOI, RERA has been enacted to bring transparency in the real estate sector like other sectors i.e. banking, insurance, securities, food etc. The real estate sector has been in dire need for regulations to protect the life savings of consumers/buyers. The RERA is aimed at improving the eco-system to ensure consumer protection, transparency and fair and ethical business practices in matters of sale and purchase of properties in the real estate sector. RERA provides for institution of a uniform regulatory environment, aimed at protecting the interests of all stakeholders, including consumers and establishing an adjudicatory mechanism for speedy adjudication of disputes. In para 30 of their reply, the UOI has in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay v. Vishnu Ramchandra (Supra), the Apex Court observed that the fact that part of the requisites for operation of the statute were drawn from a time antecedent to its passing did not make the statute retrospective so long as the action was taken after the Act came into force. The consequences for breach of such obligations under RERA are prospective in operation. In case ongoing projects, of which completion certificates were not obtained, were not to be covered under RERA, then there was likelihood of classifications in respect of undeveloped ongoing project and the new project to be commenced. In view of the material collected by the Standing Committee and the Select Committee and as discussed on the floor of the Parliament, it was thought fit that ongoing project shall also be made to be registered under RERA. The Parliament felt the need because it was noticed that all over the country in large number of projects the allottees did not get possession for years together. Huge sums of money of the allottees is locked in. Sizable section of allottees had invested their hard earned money, life savings, borrowed money, money obtained through loan from various financial insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is arbitrary and unreasonable unless constitutional infirmity has been established. It is settled position that with the development of law, it is desirable that courts should apply the latest tools of interpretation to arrive at a more meaningful and definite conclusion. A balance has to be struck between the restrictions imposed and the social control envisaged by Article 19(6). The application of the principles will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances. 89. Legislative power to make law with retrospective effect is well recognized. In the facts, it would not be permissible for the petitioners to say that they have vested right in dealing with the completion of the project by leaving the proposed allottees in helpless and miserable condition. In a country like ours, when millions are in search of homes and had to put entire life earnings to purchase a residential house for them, it was compelling obligation on the Government to look into the issues in the larger public interest and if required, make stringent laws regulating s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romoter and issue necessary directions to the promoter, taking into consideration the facts of each case. We, therefore, do not find any arbitrariness in making the promoter to disclose a time-line at the time of getting registration of the ongoing projects. Such a declaration by the promoter would bind him to complete the remaining work which was pending, may be, for years together, without fault of the allottee. 94. Section 4(2)(l)(D) mandates that 70% of the amount realized for the real estate project from the allottees from time to time shall be deposited in separate account in a scheduled bank to cover the cost of construction, land and shall be used only for that purpose. This is an important provision under the scheme of RERA. It was submitted during the course of argument that throughout the country and more so in Mega Cities like Delhi and Mumbai number of cases are coming to light, that huge projects are left incomplete by the builders without giving timely possession to the allottees as proposed in the agreement. Allottees have approached the Apex Court/High Courts. Several stringent actions have been initiated by the courts. The purpose behind framing this provision is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation and pass necessary orders. In case the allottees default in payment, the it would be for the authority to issue necessary instructions and directions so that allottees are made to deposit the amount with the promoter. A promoter would remain always a promoter under RERA. What is registered under Section 3 of RERA is a project and not a promoter. This is a crucial distinction which needs to be understood while analyzing the scheme of RERA. In a given fact situation of the case, the authority may ask the promoter to sell already constructed flats for generating finances so that one is not put to any loss and the remaining development work is carried out. We cannot encompass all the situations for all the times to come at this stage. It is left to the wisdom of the authority concerned, which is expected to deal with the facts of each case while discharging its obligation in implementing the provisions of RERA in letter and spirit. 97. The amount realized by the promoter would remain his money and in no case expropriated or taken over in any way by authority under RERA. The amount is merely sought to be deposited in a separate account to ensure timely completion of the proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners strong objection was raised in respect of first proviso to Section 6. Section 6 of RERA seeks to extend the period of registration granted under Section 5 on application made by the promoter, except in case for "force majeure" which means a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project. Section 6 of RERA provides that registration granted under Section 5 may be extended by the authority on application made by the promoter due to "force majeure". Explanation to Section 6 reads as under:- "Explanation.-For the purpose of this section, the expression "force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project. The first proviso to Section 6 has been challenged by the petitioners as being contrary to Articles 14 and 19(1)(g) of the Constitution. Under the said provision, it is prescribed that the authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way to advance the purpose for which such provisions are made by the Parliament. On behalf of the UOI, it was submitted that once the court holds or declares first proviso to Section 6 to be directory and not mandatory, then it would open floodgates for some promoters or section of allottees to create litigation, obtain stay/injunction orders and get the project delayed. The entire purpose of the law would get frustrated. Purposefully a limited period of extension was prescribed under Section 6 of RERA. On behalf of the UOI, learned ASG submitted that the promoter need not be apprehensive about provisions of Section 6 as there are sufficient provisions under the RERA which will take care of interest of the promoter. 106. We are of the view that just because law prescribes aggregate period of extension of one year, a provision need not to be held to be arbitrary and constitutionally invalid. We find that such provisions can be harmoniously construed to strike a balance so that interest of genuine/non defaulting promoters is protected. We do not view this provision to be one sided. RERA is enacted to regulate private sector transaction of sale and purchase. Bearing this in mind, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing with the cases under Sections 6, 7, 8 read with Section 37 of RERA. We do not find that on the plea of the petitioners and for the reasons set out by the petitioners, first proviso to Section 6 needs to be declared as unreasonable, arbitrary, violating constitutional mandate of Articles 14, 19(1)(g) and 300-A of the Constitution of India. A harmonious and balance construction of the provisions shall suffice the purpose. Section 7(3) reads as under : "7(3). The Authority may, instead of revoking the registration under sub-section (1), permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter. Section 8 refers to obligation of Authority consequent upon lapse of or on revocation of registration. Under these two provisions, the authority concerned is entitled to impose, in the interest of allottees, any such terms and conditions instead of revoking the registration. Even in case of lapse or revocation of registration, under Section 8, the authority would consult the appropriate Government and take necessary steps to car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -charge of the project for conveying the title/registering conveyance in favour of the allottees and/or for taking necessary steps in accordance with the law. Therefore, the time prescribed under Section 6 is reasonable and has been prescribed in public interest. 111. The RERA makes a shift from MOFA wherein prior permissions, sanctions and approvals were not necessary for the purposes of entering into a sale agreement. Under the provisions of Section 4(2)(l) (C) a promoter has to self-assess his project completion date after having all his permissions including commencement certificate. It is not that entire burden is shifted under the RERA on the promoter. Section 19 refers to various rights and duties of allottees. They are bound to make timely payment and delayed payments result in interest being payable by the allottees, which shows that RERA has struck balance while considering the rights and duties of both, the promoter and the allottee. We find substance in the submissions advanced by the learned Senior Counsel Mr. Khambata, Amicus Curiae, that in such a situation the promoter would be acting as an agent of the allottee. Though the learned Advocate General alternatively su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was rightly submitted by the learned ASG, learned Amicus Curiae and the learned counsel appearing for the consumer organizations that this would not be an appropriate stage to consider the validity of said time period since for the present issue is merely academic. The court should not enter into academic consideration of the provisions of any statute. This submission was based by the learned counsel in view of the judgment of the Apex Court in the case of State of Bihar v. Rai Bahadur - AIR 1960 SC 378 (para 7), K.B. Nagpur v. UOI - (2012) 4 SCC 483 (paras 20 and 21) and Sheo Shankar v. State of M.P. - AIR (38) 1951 Nagpur 58 (Paras 44, 60, 65 and 66). SECTION 7 : 114. Section 7 deals with revocation of registration. Sections 7(3) needs to be considered by reading provisions of Sections 8 and 37 together. Under these provisions, the authority would take appropriate steps and issue directions in the given fact situation of the case to carry out the remaining development work. While doing so, the authority ought to be conscious of the promoters' bona fides, reasons for delay and the rights and duties of the allottees. RERA aims at striking a balance by placing restriction on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide powers under the RERA. The authority has to hear the parties before taking action. Under second proviso to Section 8, it is prescribed that in case of revocation of registration of a project, the association of allottees shall have the first right of refusal for carrying out the remaining development work. It was submitted on behalf of the petitioners that there is no choice left with the authority then to hand over the project for its completion in favour of the allottees in case they apply for the same. We find that again it requires a harmonious and balanced construction of the provisions of Section 8 read with other provisions of RERA because it would do harm in case individual provision of this nature and their clauses are considered in isolation and by separating them from one to another. As a scheme, we will have to understand and appreciate provisions of this beneficial legislation. Even if under second proviso to Section 8, the association of allottees may deserve first consideration, but under the wide powers conferred under Sections 7(3), 8 and 37 of the RERA, the authority could mould its directions in such a way so that the object and purpose of this Act i.e. to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 18(1)(a) and (b) reads as under : Section 18. Return of amount and compensation. - (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,- (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act. Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. The learned counsel appearing for the petitioners submit that Section 18(1)(a) operates retrospective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments in law. While the proposal is submitted, the promoter is supposed to be conscious of the consequences of getting the project registered under RERA. Having sufficient experience in the open market, the promoter is expected to have a fair assessment of the time required for completing the project. After completing all the formalities, the promoter submits an application for registration and prescribes a date of completion of project. It was submitted that interest be made payable from the date of registration of the project under RERA and not from the time-line consequent to execution of private agreement for sale entered between a promoter and a allottee. It was submitted that retrospective effect of law, having adverse effect on the contractual rights of the parties, is unwarranted, illegal and highly arbitrary in nature. 120. Under the provisions of Section 4(2)(l)(D), the promoter would deposit 70% of the amount realized for the real estate project from the allottees in a separate account which means that 30% of the amount realized by the promoter from the allottees will be retained by him. In such case, if the promoter defaults to hand over possession to the allottee in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "retrospective or retroactive law" as one which takes away or impairs vested or accrued rights acquired under existing laws. A retroactive law takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transaction or considerations already past. 21. In Advanced Law Lexicon by P. Ramanath Aiyar (3rd Edition, 2005) the expressions "retroactive" and "retrospective" have been defined as follows at page 4124 Vol. 4: "Retroactive- Acting backward; affecting what is past. (Of a statute, ruling, etc.) extending in scope or effect to matters that have occurred in the past. - Also termed retrospective. (Blacks Law Dictionary, 7th Edn. 1999) 'Retroactivity' is a term often used by lawyers but rarely defined. On analysis it soon becomes apparent, moreover, that it is used to cover at least two distinct concepts. The first, which may be called 'true retroactivity', consists in the application of a new rule of law to an act or transaction which was completed before the rule was promulgated. The second concept, which will be referred to as 'quasi-retroactivity', occu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to these provisions as being violative of Articles 14 and 20 is not sustainable in law. The petitioners have failed to establish that the above stated statutory provisions needs to be struck down. We find that RERA has adequate mechanism, which balances the rights and obligations of the promoter, real estate agent and the allottee. The adjudicatory mechanism is prescribed at each level. The provisions of Section 71(1) refers to power to adjudicate. Such powers will be exercised by a person who has been a District Judge, after holding appropriate inquiry. It was submitted that there is no mechanism for adjudication in respect of amount of interest. If we peruse Section 71(3), it is made clear that adjudicatory authority would direct payment of compensation or interest as the case may be. Harmonious reading of these provisions would indicate that adequate mechanism and safeguards are prescribed by the RERA. 124. The entire scheme of the RERA is required to be kept in mind. It is already submitted during the course of hearing that in many cases helpless allottees had approached consumer forum, High Courts, Apex Court in a given fact situation of the case. The courts have been passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint pending before it and file an application before the adjudicating officer under this Act. 125. The proviso to Section 71(1), as quoted above, is clear indicator that even pending complaint before the Consumer Forum could be transferred to the adjudicator under RERA. A submission was advanced that allottee is free to approach whatever forum in respect of the defaults committed, if any, in compliance with the agreement of sale entered into between the promoter and the allottee prior to registration of RERA. In view of the scheme of RERA, we find that this contention of the petitioners cannot be upheld. It will be unreasonable to expect the allottee to resort to proceeding in different forums prior to registration of project in respect of the agreement executed prior to registration under RERA and post registration. Under the scheme of RERA, the adjudicatory mechanism is prescribed under one umbrella. We do not notice any illegality in the same. Section 71 is framed in the larger interest of the consumers. The adjudicator who would be a judicial member of the rank of District Judge would be dealing with all the issues and the pleas raised by the promoter, allottees and other st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the interest is penal in nature, levy of interest is not retrospective but is only based on antecedent facts; it operates prospectively. The interest payable under Section 18 is as per the definition of "interest" under Section 2(za) Explanation (ii), the same interest that would have been payable by the flat purchaser for delay in payment. Therefore, the payment of interest payable cannot be said to be penal in nature. 128. The legislature has power to make laws with retrospective effect. Therefore, even assuming that RERA or any part thereof operates retrospectively, such retrospective operation would not render it unconstitutional, unless the retrospectivity is shown to be excessive or harsh which injuriously affects a substantive or vested right. The inhibition against retrospective construction of a statute is not a rigid rule and has been held not to apply to a curative statute or a law enacted for the benefit of the community as a whole, which may be held to be retrospective even in the absence of any provision: (Vijay v. State of Maharashtra - (2006) 6 SCC 289 - paras 10, 12 and Virender Singh Hooda v. State of Haryana - (2004) 12 SCC 588 - para 35. RERA is enacted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quasi-judicial functions. It cannot be said to be a judicial tribunal in that sense. The judgment relied upon by the petitioners dealt with a case where the erstwhile company jurisdiction of the High Court was sought to be transferred to a Tribunal. The observations of the Apex Court must be read in the light of the said factual scenario. 131. The RERA authority discharges several functions which are envisaged under Sections 32 and 34. The learned ASG appearing for Union of India has placed reliance on several statutes such as the SEBI Act, 1992, Prevention of Money Laundering Act, 2002, Public Premises (Eviction of Unauthorised Occupants) Act, 1971 etc. to show that authorities are constituted under several statutes which do exercise quasi-judicial functions but do not require appointment of a judicial member. 132. We find that provisions of Section 22 do not refer to presence of a Judicial Member. The learned Senior Counsel Mr. Khambata submitted that a quasi judicial proceeding is one in which a lis between two parties with opposing claims is decided. In the absence of a statutory provision to the contrary it is the duty of an authority deciding such a lis to act judicially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authority would be discharging not only administrative functions but also quasi judicial functions. But, then considering the afore-stated submission made on behalf of the UOI and the learned counsel appearing for the respondents, we do not find that a judicial member is mandatorily to be appointed. We do not find that the composition of the Selection Committee could be faulted as contrary to the judgment in the case of Madras Bar Association (Supra). The challenge to validity of constitution of Selection Committee and qualification of members of authority under Section 22 of RERA fails. 135. In respect of submission of having judicial member on the Appellate Tribunal, we may refer to Section 45 of the RERA which relates to Composition of Appellate Tribunal. It is mandated under Section 45 that Appellate Tribunal shall consist of a Chairperson and not less than two whole time Members of which one shall be a Judicial Member and other shall be a Technical or Administrative Member. Provisions of Section 46 refers to qualifications for appointment of Chairperson and Members. Section 46 (b) defines a judicial member, which includes a member of Indian Legal Service who had held the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that provisions of Section 46 are valid and there is no lacuna and defect in enacting the provisions of Section 46. 138. We are in agreement with the submission of Dr. Tulzapurkar. A Member of Indian Legal Service, who has held the post of Additional Secretary of that service or any equivalent post is neither a retired Judge nor qualified to be appointed as a Judge. He can never fall within a definition of "Judicial Member". Section 46(1)(b) being contrary to the express mandate of Section 45 of the RERA is, therefore, bad in law. It is well settled that a Court can sever an unconstitutional provision from an otherwise constitutional measure (D.S. Nakara v. Union of India - (1983) 1 SCC 305 - para 60. We, therefore, hold that expression of the definition relating to member of Indian Legal Service could be severed and be declared as unconstitutional and be struck down accordingly. Under the scheme of RERA, we find that the Tribunal which has judicial member on it would hear and decide cases in appeal against the decisions taken by the authority concerned. The Tribunal will be discharging judicial/quasi-judicial functions. It is very likely that in a given case it may not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of penalties operate retrospectively/retroactively and, therefore, they are violative of Articles 14 and 20 of the Constitution of India. Sections 67 and 68 deal with penalties to be paid by allottee for failure to comply with orders of Authority and Appellate Tribunal. Some of the penalties are to be paid by promoter and real estate agent. It is not that entire Chapter of penalty covers provisions relating to penalty to be imposed/awarded against the promoter alone. The RERA has aimed to balance the rights and obligations of promoter and the allottee while drafting the penal provisions. On behalf of the petitioners there is no specific challenge raised to legislative competence of Parliament to pass RERA. Therefore, we would not deal with the said issue. We had already discussed that the penalties to be imposed under Chapter VIII of RERA are not retrospective in its operation. Merely because it relates to ongoing projects which get registered with the authority, the present statute cannot be said to be operating retrospective. Events taking place and instances occurring after registration of the project are taken note of under the penal provisions. The authority concerned woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Ritesh Agarwal and anr. v. Securities and Exchange Board of India and ors. (Supra), it was observed that ex facie, a penal statute will not have any retrospective effect or retroactive operation. The Supreme Court held that the SEBI (Prohibition of Fraudulent and Unfair Practices relating to Securities Market) Regulations, 1995, could not be invoked if the commission of fraud was complete prior to the date of said Regulations came into force. In para 31 of the said judgment the Supreme Court rejects the contention that the offence was a continuing one which indicate that if the fraud had been a continuing one, the said Regulations would have applied. In the case of Madras Forgings & Allied Industries v. Suresh Chandra (Supra), the High Court was dealing with an amendment to the Negotiable Instruments Act introducing an offence of which one of the essential ingredients was the drawing of a cheque. In the facts of the said case, the court held that the accused could not be deprived of a defence available to him at the time the cheque was drawn. The case of Badrinarayan Shankar Bhandari v. Omprakash Shankar Bhandari (Supra) relates to interpretation of the 2005 Amendment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature. Under the scheme of the RERA we do not find any provision which acquires the property of the promoter in any way. A promoter always remains a promoter. The property of the promoter remains his property. The RERA authority would complete remaining development work and hand over the possession to the allottees concerned and then the original promoter steps in again. Therefore the submissions advanced on behalf of the petitioners that the RERA confines their right to hold possession of property and injuncts them is not tenable. In the case of Cellular Operators Association of India and ors. v. Telecom Regulatory Authority of India and ors. (Supra), the Supreme Court held that there cannot be any dispute in respect of settled principles governing provisions of Articles 14, 19(1)(g) read with Article 19(6). But a proper balance between the freedom guaranteed and the social control permitted by Article 19(6) must be struck in all cases. We find that RERA strikes balance between rights and obligations of promoter and allottees. It is a beneficial legislation in the larger public interest occupying the field of regulatory nature which was absent in this country so far.The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed or upon abstract considerations. In the case of M.R.F. Ltd. v. State of Kerala [(1998) 8 SCC 227], it is observed that, restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. What is reasonable will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances. A balance has to be struck between the restrictions imposed and the social control envisaged by Article 19(6). Every sovereign legislature possesses the right to make retrospective legislation. The power to make laws includes power to give it retrospective effect. In Craies on Statute Law (7th Edition), at page 396, it is observed that, "If a statute is passed for the purpose of protecting the public against some evil or abuse, it may be allowed to operate retrospectively, although by such operation it will deprive some person or persons of a vested right". 147. In the case of Shayara Bano v. Union of India and ors. (Supra), the Apex Court in para 99 observed that, "Judgment in the case of State of A.P. v. McDowell an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need for regulating the sector has been emphasised in various forums." The Standing Committee had gone through the written memorandum and suggestions of number of organizations, individuals on the subject matter. The organizations included Developers' Associations, Consumers' Organizations, Institute of Real Estate and Finance, Design & Engineering Consultants Pvt. Ltd., Builders' Federation, National Real Estate Development Council, Apartment Owners Association, Advocates and Solicitors, Indian Institute of Public Administration (Delhi Regional Branch), Department of Economics, University of Mumbai, Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry. The representatives from these organizations/the individuals appeared before the Committee for the oral evidence. 149. We perused the report of the Select Committee on the Real Estate (Regulation and Development) Bill, 2013 presented to the Rajya Sabha on 30th July, 2015. Paras 3, 4, 5 and 8 of the introductory note by the Chairman of the Select Committee reads as under : "3. The Committee held 17 sittings in all. Out of these, 8 sittings were held outside Delhi and remaining were h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between 2011 and 2015. In 27 cities, during the last five years, a total investment value was of Rs. 13,69,820 crores. Therefore, it was desirable to have transparent and accountable system in the real estate sector of the country. From the debate, we noticed that while tabling the Bill, the then Hon'ble Minister of Urban Development, Government of India apprised the House that as per the latest information, the Ministry of Corporate Affairs informed that a total of 76,044 companies were involved in the real estate sector. More than 17,000 companies were engaged in Delhi itself. The demand for granting infrastructure status for real estate sector, which includes affordable housing, could be considered only when there is an effective regulatory mechanism. It was further informed that there is a huge potentiality for foreign investment in the sector. A-day-long workshop was also conducted for different stakeholders and various issues were discussed. It was further informed by the Hon'ble Minister to the House that there is unsold housing stock of over 10 lakh houses in major cities on account of increase in prices due to cost and time overruns and dwindling investor confide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulatory mechanism for a disciplined growth of the real estate sector. 152. It needs to be emphasized that RERA law is not to be considered as anti promoter. It is a law for regulation and development of the real estate sector. Under the scheme of the RERA, the promoter's interests are also safeguarded and there is a reason for the same. Unless a professional promoter making genuine efforts is not protected, then very purpose of development of real estate sector would be defeated. Therefore, the apprehensions expressed on behalf of the petitioners in this regard are not well founded. 153. During the course of hearing, on behalf of the petitioners, it was strongly canvassed that certain provisions of RERA sound harsh, unreasonable and contrary to the constitutional spirit. Taking into consideration the object, purpose and the scheme of RERA, which was enacted in the larger public interest, we have placed our interpretation to the specific provisions of RERA. We have harmoniously considered interpretational aspects of some of the provisions with a balanced approach so as to advance the object and purpose of RERA. The constitutional challenge to the provisions was based on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been reproduced. It is, therefore, unnecessary for me to reproduce these provisions. As the controversy raised in these Petitions involve interpretation of various provisions of RERA, it is desirable to refer to "Principles of Statutory Interpretation" by Justice G.P. Singh, 13th Edition. At page-35 onwards, the learned Author has discussed in extenso aspect of interpretation of statute, and it reads thus : 158. When the question arises as to the meaning of a certain provision in a statute, it is not only legitimate but proper to read that provision in its context. The context here means, the statute as a whole, the previous state of the law, other statutes in pari materia, the general scope of the statute and the mischief that it was intended to remedy [as held in R.S. Raghunath v. State of Karnataka, AIR 1992 SC 81]. This statement of the rule was later fully adopted by the Constitution Bench of the Apex Court in Union of India v Elphinstone Spinning and Weaving Co. Ltd., (2001) 4 SCC 139. 159. It is a rule now firmly established, [as held in Philips India Ltd. v. Labour Court, (1985) 3 SCC 103], that the intention of the Legislature must be found by reading the statute as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, sufficient regard has to be given to the setting in which they are found [as held in Vaccum Oil Co. v. Secretary of State, AIR 1932 PC 168]. It is also settled principle of law that the Courts while pronouncing upon the constitutionality of a statute start with a presumption in favour of constitutionality and prefer a construction which keeps the statute within the competence of the Legislature [as held in Corporation of Calcutta v. Liberty Cinema, AIR 1965 SC 1107] and the onus lies on the persons assailing the Act to prove that it is unconstitutional. 162. In Heydon's case [76 ER 637] it was held that for the sure and true interpretation of a statutes in general (be they penal or beneficial, restrictive or enlarging of the common law), four things are to be discerned and considered: st - What was the common law before the making of the Act? nd - What was the mischief and defect for which the common law did not provide? rd - What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth, and th - The true reason of the remedy; and then the office of all the judges is always to make such construction as shall suppress the mischief, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the Legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognize decrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a Legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CESTAT remains unaffected. Secondly, such a restriction is intended to serve a larger public interest and to uplift the professional values and standards of advocacy in the country. In other words, if the restriction is partial and is intended to serve the larger public interest, it cannot be said to be an unreasonable restriction. 167. In paragraph-34 reference was made to the decision of Constitution Bench of Apex Court in Municipal Corporation of the City of Ahmedabad v. Jan Mohammed Usmanbhai (1986) 3 SCC 20. In paragraph-17 of that decision it was observed that "...... Obviously it is left to the court in case of a dispute to determine the reasonableness of the restrictions imposed by the law. In determining that question the court cannot proceed on a general notion of what is reasonable in the abstract or even on a consideration of what is reasonable from the point of view of the person or persons on whom the restrictions are imposed. ....." 168. Reference was further made to paragraph-15 of State of Madras v. V.G. Row: AIR 1952 SC 196: 1952 Cri LJ 966, where it was observed that "....It is important in this context to bear in mind that the test of reasonableness, wherever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iples. The courts must presume that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed against problems made manifest by experience and that its discriminations are based on adequate grounds. It must be borne in mind that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest, and finally that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common rapport, the history of the times and may assume every state of facts which can be conceived to be existing at the time of legislation." 172. In Government of Andhra Pradesh v P. Laxmi Devi,: (2008) 4 SCC 720, the Apex Court exhaustively dealt with how and when the power of the Court to declare the statute unconstitutional should be exercised. Paragraphs-38 to 52 and 55 read thus : "38. This is a very important question because invalidating an Act of the Legislature is a grave step and should never be lightly taken. As observed by the American Jurist Alexander Bickel "judicial review is a counter majorita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l document like a title deed to be technically construed; it is rather a matter of great outlines broadly drawn for an unknowable future. Often reasonable men may differ about its meaning and application. In short, a Constitution offers a wide range for legislative discretion and choice. The judicial veto is to be exercised only in cases that leave no room for reasonable doubt. This rule recognizes that, having regard to the great, complex ever-unfolding exigencies of government, much which will seem unconstitutional to one man, or body of men, may reasonably not seem so to another; that the Constitution often admits of different interpretations; that there is often a range of choice and judgment; that in such cases the Constitution does not impose upon the legislature any one specific opinion, but leaves open this range of choice; and that whatever choice is not clearly in violation of a constitutional provision is valid even if the Court thinks it unwise or undesirable. Thayer traced these views far back in American history, finding, for example, that as early as 1811 the Chief Justice of Pennsylvania had concluded: "For weighty reasons, it has been assumed as a principle in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is one and only one ground for declaring an Act of the legislature (or a provision in the Act) to be invalid, and that is if it clearly violates some provision of the Constitution in so evident a manner as to leave no manner of doubt. This violation can, of course, be in different ways, e.g. if a State legislature makes a law which only the Parliament can make under List I to the Seventh Schedule, in which case it will violate Article 246(1) of the Constitution, or the law violates some specific provision of the Constitution (other than the directive principles). But before declaring the statute to be unconstitutional, the Court must be absolutely sure that there can be no manner of doubt that it violates a provision of the Constitution. If two views are possible, one making the statute constitutional and the other making it unconstitutional, the former view must always be preferred. Also, the Court must make every effort to uphold the constitutional validity of a statute, even if that requires giving a strained construction or narrowing down its scope vide Mark Netto v. Government of Kerala and others: AIR 1979 SC 83 (para 6). Also, it is none of the concern of the Court whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar too wise to gamble for Utopia or nothing to be fooled by its own romantic verbiage. Above all, it knows that none of the numerous clashing social forces is apt to be completely without both vice and virtue. By give and take, the legislative process seeks not final truth, but an acceptable balance of community interests. In this view the harmonizing and educational function of the process itself counts for more than any of its legislative products. To intrude upon its pragmatic adjustments by judicial fiat is to frustrate our chief instrument of social peace and political stability. Second, if the Supreme Court is to be the ultimate policy-making body without political accountability how is it to avoid the corrupting effects of raw power? Can the Court avoid the self-inflicted wounds that have marked other episodes of judicial imperialism? Can the Court indeed satisfy the expectations it has already aroused? A third cluster of questions involves the competence of the Supreme Court as a legislative body. Can any nine men master the complexities of every phase of American life which, as the post 1961 cases suggest, is now the Court's province? Are any nine men wise enough a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onscious or unconscious sympathy with one side or the other prematurely into the law, and forgets that what seem to him to be first principles are believed by half his fellow men to be wrong." (See Frankfurter's 'Mr. Justice Holmes and the Supreme Court') 51. In our opinion the legislature must be given freedom to do experimentations in exercising its powers, provided of course it does not clearly and flagrantly violate its constitutional limits. 52. As observed by Brandeis, J. of the U.S. Supreme Court in his dissenting judgment in New State Ice Co. v. Liebmann, 285 U.S. 262 (1931) : "The discoveries in physical science, the triumphs in invention, attest the value of the process of trial and error. In large measure, these advances have been due to experimentation. ... There must be power in the States and the nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs. ... To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation." 55. In Keshvananda Bharati v. State of Kerala,: AIR 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question three things will have to be considered. The first is, whether the expression "restriction" as used in article 19(6) and for the matter of that in the other sub-clauses of the Article, means and includes total deprivation as well? If the answer is in the affirmative, then only the other two questions would arise, namely, whether these restrictions are reasonable and have been imposed in the interests of the general public? ........ " [Emphasis supplied] 175. In the case of Modern Dental College and Research Centre and others v. State of Madhya Pradesh and others, :(2016) 7 SCC 353 and in particular paragraphs-57, 60, 62 and 65 where it is observed that the right under Article 19(1)(g) is not absolute in terms but is subject to reasonable restrictions under clause (6). Reasonableness has to be determined having regard to nature of right alleged to be infringed, purpose of the restriction, extent of restriction and other relevant factors. The Court has to try to strike a just balance between the fundamental rights and the larger interest of the society. The Court interferes with a statute if it clearly violates the fundamental rights. The Court proceeds on the footing tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is gathered from the language of the provision. If the language or the phraseology employed by the legislation is precise and plain and thus by itself proclaims the legislative intent in unequivocal terms, the same must be given effect to, regardless of the consequence that may follow. But if the words used in the provision are imprecise, protean or evocative or can reasonably bear meanings more than one, the rule of strict grammatical construction ceases to be a sure guide to reach at the real legislative intent. In such a case, in order to ascertain the true meaning of the terms and phrases employed, it is legitimate for the Court to go beyond the arid literal confines of the provision and to call in aid other well-recognised rules of construction, such as its legislative history, the basis scheme and framework of the statute as a whole, each portion throwing light, on the rest, the purpose of the legislation, the object sought to be achieved, and the consequence that may flow from the adoption of one in preference to the other possible interpretation." 178. In paragraph-101, paragraph-231 of Kehar Singh v. State (Delhi Admn.), :(1988) 3 SCC 609 was extracted which is to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of construction. ......." 180. Bearing in mind the above legal principles, let us consider the background of enacting RERA. Before coming into force of RERA, the regulation of the construction and sale of apartments in Maharashtra was governed by the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (for short, 'MOFA'). MOFA provided for the statutory rights and obligations of promoters and flat purchasers/allottees (Sections 3, 4, 5, 6, 7 etc.). However, a very important area was unfortunately not included in the statutory scheme of the MOFA i.e. completion of construction of buildings/projects. This was a serious lacuna in the law given the increasing number of projects where construction was either substantially delayed or not completed at all. 181. There was no accountability as to entity or persons responsible and/or liable for delivering on several projects that were advertised and in respect of which amounts had been collected from individual purchasers. What was promised in advertisements/broachers, such as amenities, specifications of premises etc. was without any basis, often without plans having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to enact the Real Estate (Regulation and Development) Bill (for short, 'said Bill'. The Department of Legal Affairs, Ministry of Law & Justice, Government of India had opined that the Parliament had the competence to enact the Bill and the Legislative Department, subsequently, vetted the Draft Bill. After approval of the Union Cabinet on 4.6.2013, said Bill was introduced in Rajya Sabha on 14.8.2013. 184. On 23.9.2013 said Bill was referred to the Standing Committee of Urban Development for examination. The Standing Committee sought public opinion through press release and analysed the memoranda/suggestions received from various stake holders/experts, developer associations such as Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Real Estate Developers' Associations of India (CREDAI), National Real Estate Development Council (NAREDCO) and other associations working in the field of real estate, on various provisions of the Bill. 185. The Standing Committee also had the briefing of the representatives of the erstwhile Ministry of Housing & Urban Poverty Alleviation (now Ministry of Housing & Ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed and demand for housing and infrastructure in the country. While this sector has grown significantly in recent years, it has been largely unregulated, with absence of professionalism and standardisation and lack of adequate consumer protection. Though the Consumer Protection Act, 1986 is available as a forum to the buyers in the real estate market, the recourse is only curative and is not adequate to address all the concerns of buyers and promoters in that sector. The lack of standardisation has been a constraint to the healthy and orderly growth of industry. Therefore, the need for regulating the sector has been emphasised in various forums. 2. In view of the above, it becomes necessary to have a Central legislation, namely, the Real Estate (Regulation and Development) Bill, 2013 in the interests of effective consumer protection, uniformity and standardisation of business practices and transactions in the real estate sector. The proposed Bill provides for the establishment of the Real Estate Regulatory Authority (the Authority) for regulation and promotion of real estate sector and to ensure sale of plot, apartment or building, as the case may be, in an efficient and transpare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch details as may be prescribed including information provided in the application for which registration has been granted; (iii) to ensure compliance of the obligations cast upon the promoters, the allottees and the real estate agents under the proposed legislation; (g) to establish an Advisory Council by the Central Government to advice and recommend the Central Government on - (i) matters concerning the implementation of the proposed legislation; (ii) major questions of policy; (iii) protection of consumer interest; (iv) growth and development of the real estate sector; (h) to establish the Real Estate Appellate Tribunal by the appropriate Government to hear appeals from the direction, decision or order of the Authority or the adjudicating officer; (i) to appoint an adjudicating officer by the Authority for adjudging compensation under sections 12, 14, 18 and 19 of the proposed legislation; (j) to make provision for punishment and penalties for contravention of the provisions of the proposed legislation and for non-compliance of orders of Authority or Appellate Tribunal; (k) to empower the appropriate Government to supersede the Authority on certain circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [as per clause (d)]; the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy [as per clause (e)]; the location details of the project, with clear demarcation of land dedicated for the project along with its boundaries including the latitude and longitude of the end points of the project [as per clause (f)]; proforma of the allotment letter, agreement for sale, and the conveyance deed proposed to be signed with the allottees [as per clause (g)]; the number, type and the carpet area of apartments for sale in the project along with the area of the exclusive balcony or verandah areas and the exclusive open terrace areas apartment with the apartment, if any [as per clause (h)]; the number and areas of garage for sale in the project [as per clause (i)]; a declaration supported by an affidavit, which shall be signed by the promoter or any person, authorised by the promoter stating (A) that he has a legal title to the land on which the development is proposed along with legally valid documents with authenticati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 7 and 8 of RERA. In my opinion, all these provisions are required to be construed harmoniously. When the question arises as to the meaning of a certain provision in a statute, it is not only legitimate but proper to read that provision in its context. The context here means, the statute as a whole, the previous state of the law, other statutes in pari materia, the general scope of the statute and the mischief that it was intended to remedy. It is a rule now firmly established that the intention of the Legislature must be found by reading the statute as a whole. Every clause of a statute has to be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject matter. To ascertain the meaning of a clause in a statute the Court has to look into the whole statute. To ascertain the meaning of a clause in a statute the court must look at the whole statute, at what precedes and at what succeeds and not merely at the clause itself. An isolated consideration of a provision leads to some other interrelated provision becoming otiose or devoid of meaning. 194. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken care of. Under Section 7, the Authority, on receipt of a complaint or suo motu is empowered to revoke the registration after being satisfied that - (a) the promoter has made default in doing anything required by or under the Act or the Rules or the Regulations made thereunder; (b) the promoter has violated any of the terms or conditions of the approval given by the Competent Authority; (c) the promoter is involved in any kind of unfair practice or irregularities. 198. Instead of revoking the registration under sub-section (1), under sub-section (3) the Authority may permit the registration to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter. Thus, even in case the Authority finds that the registration of the promoter is liable to be revoked still discretion is conferred upon the Authority to permit registration to remain in force albeit upon imposing conditions. Likewise under Section 8, the Authority may continue registration of the promoter for carrying out all the remaining development works. Thus when the Authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely, whether these restrictions are reasonable and have been imposed in the interests of the general public. In the present case, total prohibition is not imposed upon the rights of the promoter thereby violating fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India. The other two questions, namely, whether these restrictions are reasonable and have been imposed in the interest of the general public would not arise. RERA regulates the construction activities without imposing total prohibition. 201. In R.C. Cooper's case (supra), the Apex Court was considering validity of Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 8 of 1969 promulgated on July 19, 1969, and the Banking Companies (Acquisition and Transfer of Undertakings) Act 22 of 1969 which replaced the Ordinance with certain modifications. The petitioner contended that these provisions impaired his rights guaranteed under Articles 14, 19 and 31 of the Constitution of India and are on that account invalid. 202. In paragraph-56 the question whether the provisions of Sections 4 & 5 of Act 22, of 1969 and the other related provisions of the Act impaired the fundamental fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the decision of Saghir Ahmad's case. In paragraph-64 it was observed that by Section 15(2)(e) of the Act, the Banks were entitled to engage in business other than banking. But by the provisions of the Act they were rendered practically incapable of engaging in any business. By the provisions of the Act, a named bank could not even use its name, and the compensation which was to be given was, in the absence of agreement, to be determined by the Tribunal and paid in securities which were to mature not before ten years. A named bank may, if it agrees to distribute among the share-holders the compensation which it may receive, be paid in securities an amount equal to half the paid-up share capital, but obviously the fund would not be available to the Bank. 205. In paragraph-65 it was observed that where restrictions imposed upon the carrying on of a business were so stringent that the business could not in practice be carried on, the Court will regard the imposition of the restrictions as unreasonable. Reference was made to the decision of Mohammad Yasin v. the Town Area Committee, Jalalabad, and another, :AIR 1952 SC 115. 206. In paragraph-67 it was observed that if compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia (for short, 'TRAI'). The Regulations were notified on 16.10.2015 and were to take effect from 1.1.2016. The amendment was made purportedly in the exercise of powers conferred by Section 36 read with Section 11 of the Telecom Regulatory Authority of India Act, 1997. By the amendment, every originating service provider who provides cellular mobile telephone services was made liable to credit only the calling consumer (and not the receiving consumer) with one rupee for each call drop (as defined), which takes place within its network, upto a maximum of three call drops per day. The service provider was also to provide details of the amount credited to the calling consumer within four hours of the occurrence of a call drop either through SMS/USSD message. In the case of a post-paid consumer, such details of amount credited in the account of the calling consumer were to be provided in the next bill. 211. The Apex Court referred to the paper called "Technical Paper on call drops in cellular network" issued by TRAI on 13.11.2015. In that TRAI specifically adverted to the fact that the call drops take place due to variety of reasons. It was pointed that one of the reasons was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraphs-40 and 41, the Apex Court held that the Regulation did not fall under Section 11(1)(b)(i) & (v). It was held that the Regulation does not carry out the purpose of the Act and must be held to be ultra vires the Act on this score. In paragraph-48, the Apex Court dealt with the submissions advanced on behalf of the respondent that the Regulation was framed in public interest. While accepting the contention that TRAI may have framed the Regulation in the interest of general public, it was noted that apart from the common good in the form of consumer interest, the Regulation must also pass a separate and independent test of not being manifestly arbitrary or unreasonable. The Regulation must, in order to pass constitutional muster, be as a result of intelligent care and deliberation, that is, the choice of a course which reason dictates. Any arbitrary invasion of a fundamental right cannot be said to contain this quality. A proper balance between the freedoms guaranteed and the control permitted under Article 19(6) must be struck in all cases before the impugned law can be said to be a reasonable restriction in the public interest. 215. In paragraph-49, it was observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraphs-56 and 57, the Apex Court dealt with the contention advanced on behalf of the respondent that the Regulation was framed keeping in mind the small consumer, that is, a person who has a pre-paid SIM Card with an average balance of Rs. 10/- at a time, and that the Regulation goes a long way to compensate such person. The other contention was that though the service providers were making huge profits they are not pouring in enough funds for infrastructural developments. The Apex Court observed that the motive for the Regulation may well be what the Attorney General says it is, but that does not make it immune from Article 14 and the twin tests of Article 19(6). The Authority framing the Regulation must ensure that its means are as pure as its ends - only then will Regulations made by it pass constitutional muster. 219. In paragraph-57 it was held that whether the service providers make profits or losses cannot be said to be relevant for determining whether the Regulation is otherwise arbitrary or unreasonable. It is always open to the Authority, with the vast powers given to it under the TRAI Act, to ensure, in a reasonable and non-arbitrary manner, that service providers p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (g). 221. In paragraph-62 it was observed that the Quality of Service Regulations and the Consumer Regulations must be read together as part of a single scheme in order to test the reasonableness thereof. The countervailing advantage to service providers by way of the allowance of 2% average call drops per month, which has been granted under the Quality of Service Regulations, could not have been ignored by the Regulation so as to affect the fundamental rights of the appellants, and having been so ignored, would render the Regulation manifestly arbitrary and unreasonable. 222. It is in that context in paragraph-63, the Apex Court observed that no facts were shown which would indicate that a particular area would be filled with call drops thanks to the fault on the part of the service providers in which consumers would be severely inconvenienced. The mere ipse dixit of the learned Attorney General, without any facts being pleaded to this effect, cannot possibly make an unconstitutional Regulation constitutional. The Apex Court held that a strict penal liability laid down on the erroneous basis that the fault is entirely with the service provider is manifestly arbitrary and unreaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes, such Regulation cannot be said to be consistent with the Act, for it must be consistent with both the letter of the Act and the purposes for which the Act has been enacted. The Apex Court held that the impugned Regulation did not carry out the purpose of the Act and was ultra vires the Act on this score. 227. In my opinion the facts obtaining in the case of Cellular Operators Association of India (supra) and in the present case are materially different. In the present case, Union of India has contended that RERA is enacted under Entries 6, 7 and 46 of List III-Concurrent List of the Seventh Schedule of the Constitution of India. RERA is not enacted under Entry 42 of List III-Concurrent List of the Seventh Schedule of the Constitution of India. The petitioners have not challenged the legislative competence in enacting RERA. They have also not contended that the impugned legislation does not fall under Entries 6, 7 and 46 of List III-Concurrent List of the Seventh Schedule of the Constitution of India. In fact no argument was advanced on behalf of the petitioners in that regard. 228. Mr. Kamdar submitted that the provisions of Section 8 read with Sections 6 and 7 in so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inform other Real Estate Regulatory Authority in other States and Union Territories about such revocation of the registration. The Authority is empowered to freeze the accounts by directing the bank holding the project bank account specified under clause (D) of clause (l) of sub-section (2) of Section 4. It was submitted that the consequences stipulated under Section 7(4) are drastic and are violative of fundamental rights guaranteed to the promoter under Article 19(1)(g) of the Constitution of India. 232. I do not find any merit in this submission. Revocation of the registration takes place only upon satisfaction of the Authority as regards grounds (a) to (c) of sub-section (1) of Section 7. The Authority, before taking action of revocation of registration has to give not less than 30 days notice in writing stating the ground on which it is proposed to revoke the registration. The Authority has to consider any cause shown by the promoter against the proposed revocation. Any promoter aggrieved by the decision of the Authority has a remedy of appeal before the Appellate Tribunal. Against the decision of the Appellate Tribunal, the promoter has a remedy of filing an Appeal in the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual yield on the date of vesting as provided in Section 39(1) (e) (ii). It was further argued that in respect of Kumaun and Uttarakhand Zamindari Abolition and Land Reforms Act, 1960 (for short "KUZALR Act"), the same U.P. Legislature which had the example of Section 39(1)(e) deliberately dropped the second sub-clause and limited the compensation only to the average annual income of the last 20 years. From this it was argued that where there is no annual income, there would be no compensation. 235. In paragraph-78 it was observed that when the State exercises the power of acquisition of a private property thereby depriving the private person of the property, provision is generally made in the statute to pay compensation to be fixed or determined according to the criteria laid down in the statute itself. 236. In paragraph-82 it was observed that a distinction and difference has been drawn between the concept of 'no compensation' and the concept of 'nil compensation'. As mandated by Article 300A, a person can be deprived of his property but in a just, fair and reasonable manner. In an appropriate case the Court may find 'nil compensation' also justified and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the land used for cultivation of Linaloe did not attract the provisions of the Land Reforms Act. By a registered sale deed dated 23.3.1991 Dr. Roerich had sold 141.25 acres (which included 100 acres granted by the Government for Linaloe cultivation) to first appellant. By way of unregistered sale deed dated 16.2.1992, it was claimed that Mrs. Devika Rani Roerich had also sold an extent of 223 acres 30 guntas to the first appellant. The company instituted a suit for a declaration of title and injunction in respect of that land before the District and Civil Judge, Bangalore. The Company sought registration of the sale deed dated 16.02.1992 before the Sub Registrar, Kingeri, who refused to register the sale deed. It was alleged that some of the persons who were associated with the couple, had an eye on their properties, including the land used for linaloe cultivation, valuable paintings, jewellery, artefacts etc., and began to create documents to grab those properties. On 26.6.1993 the Deputy Commissioner, Bangalore Rural District had reported that though Roerichs had owned 470.19 acres of land including the land used for Linaloe cultivation they had filed declarations o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also sought other consequential reliefs. The writ petition was dismissed by the High Court upholding the validity of the Acquisition Act as well as Section 110 of the Land Reforms Act and the notification issued there under except in relation to the inclusion of certain members in the Board of Directors constituted under the Acquisition Act. Aggrieved by the same the Company filed Civil Appeal No. 6520 of 2003 in the Apex Court. 240. In Part-I the Apex Court examined the validity of Section 110 of the Land Reforms Act and the notification dated 8.3.1994. In paragraph-52 it was held that the first Appellant was prohibited from holding any agricultural land after the commencement of the Act. If the company was holding any land with Linaloe cultivation on the date of the commencement of the Act, the same would have vested in the State Government under Section 79B(3) of the Act and an amount as specified in Section 72 would have been paid. 241. In paragraph-68 it was held that Dr. Roerich and Mrs. Devika had got only the conditional exemption from the provisions of the Land Reforms Act for the lands used for Linaloe cultivation and, they also would have lost ownership and possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land used for the linaloe cultivation and its tree growth as part of agrarian reforms which is its dominant purpose. Proposal to preserve the paintings, artefacts, carvings and other valuables and to establish an Art-Gallery-cum-Museum are merely ancillary to the main purpose. The Act is, therefore, saved by the provisions of Article 31A(1)(a) and the Act has obtained assent of the President and hence is protected from the challenge under Articles 14 and 19 of the Constitution of India. 245. In part-III, the Apex Court dealt with Article 300-A of the Constitution and the Acquisition Act. In paragraph-129 it was noted that on behalf of the State Government that the impugned Act had provided Rs. 5 crore to meet various priorities, which cannot be said to be illusory, especially when the Government had withdrawn the exemption granted with respect to the land used for linaloe cultivation. It was pointed out but for impugned Act the Roerich's or the transferors would have got only Rs. 2 lakhs under Section 72 of the Land Reforms Act, if they were in possession and ownership of the land. 246. In paragraph-130 on behalf of the respondent it was submitted that in any view, sale d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule. The decision in K.T. Plantation Private Limited (supra) is, therefore, not applicable to the facts of the present case. 250. The reliance placed by Mr. Kamdar on the decisions in Rajiv Sarin (supra), K.T. Plantation (supra) and Cellular Operators Association of India (supra), therefore, does not advance the case of the petitioners. 251. At the cost of repetition, it has to be reiterated that there is no total prohibition on the promoters carrying on their business. RERA regulates the construction activities in the planning area. I, therefore, do not find that the decisions of Saghir Ahmad (supra), R.C. Cooper (supra) and Cellular Operators Association of India (supra) advance the case of the petitioners in any manner whatsoever. 252. Applying the principles of interpretation of statutes as also the principles culled out from the decisions referred in paragraphs 158 to 179 and in the light of the above discussion, if the provisions of Sections 3, 4, 5, 6, 7 and 8 are construed harmoniously, it cannot be said that these provisions are violative of Articles 14, 19(1)(g), 20 and 300-A of the Constitution of India.First proviso to Section 3(1), first proviso to Section (6), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of wrongs committed by a promoter. The intention of RERA is to bring the complaints of allottees before one Authority and simplify the process. If the interpretation suggested by the petitioners, namely, that the provision is applicable only after coming into force RERA is accepted, this would result in allottees having to approach different fora for interest prior to RERA and subsequent to RERA. In fact Section 71 of RERA provides that the cases pending before the Consumer Court can be transferred to Authority. Reference to pending cases is obviously a reference to claims for interest and/or compensation pending when the RERA came into force. 256. Section 4(2)(l)(C) enables the promoter to revise the date of completion of project and hand over possession. The provisions of RERA, however, do not rewrite the clause of completion or handing over possession in agreement for sale. Section 4(2)(l)(C) enables the promoter to give fresh time line independent of the time period stipulated in the agreements for sale entered into between him and the allottees so that he is not visited with penal consequences laid down under RERA. In other words, by giving opportunity to the promoter to pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest including compensation or interest, as the case may be, is payable on account of default committed by the promoter. Although this Section does not consider a situation where the promoter is unable to complete or handover possession for no fault of his own, it would be open to him to claim frustration in such a case and return the money to the allottee with interest thereby stopping the interest that is to be paid till handing over possession. The provisions of RERA ensure that the allottees' money is not misused or unreasonably retained by the promoter. 260. As noted earlier, because of the failure on the part of the promoter in completing the project within a reasonable time and handing over possession to the prospective purchasers, the Parliament has thought it fit to enact RERA so as to ensure completion of project or phase, as the case may be, in a time bound manner. Before RERA coming into force, the provisions of MOFA were applicable. However, the completion of construction of building/project was not envisaged in MOFA. This was a serious lacuna in the law which gave rise to institute suits for specific performance of contracts and/or claiming damages. The obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilitator/agency so appointed by the Authority. It was contended that it is quiet possible that the amount of 70% deposited under Section 4(2) (l)(D) may have been utilized by the promoter for carrying out construction. In that event, it will be extremely harsh and unreasonable to direct the promoter to pay interest till handing over possession after his ouster. The provisions of Section 18(1)(b) are, therefore, violative of Articles 14, 19(1) (g) of the Constitution of India. I do not find any merit in this submission. The promoter is liable to pay interest on account of suspension or revocation of the registration under the Act or for any other reason. The basic presumption is that the promoter was unable to complete the construction despite prescribing the time period under Section 4(2)(l)(C). The amount of 70% is already credited in a dedicated bank account under Section 4(2)(l)(D). The promoter has retained 30% paid by the allottee to him. Thus the allottee has parted with entire consideration for purchasing the apartment and still he is not given possession. The allottee cannot be said to be acting gratuitously. The promoter enjoying the benefit is bound to make compensation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidated Funds of India and in a State it shall be credited to such account as the State Government may specify. In short, the penalties imposed by the Appellate Tribunal or the Authority are not payable to either promoter or the allottee as the case may be but are compulsorily required to be credited either in the Consolidated Funds of India or such account as the State Government may specify. Section 76 does not include determination of Adjudicating Officer under Section 71 of RERA. This is also pointer to indicate that the interest and compensation determined by the Adjudicating Officer under Sections 12, 14, 18 and 19 is not by way of penalty but is essentially compensatory in nature. As the penalties under Sections 59, 60, 61, 63 and 64 are on account of acts of commission or omission on the part of either promoter or the allottee as the case may be and which are prospective in nature, it cannot be said that these provisions are violative of Articles 14 and 19(1)(g) of the Constitution of India and amount to unreasonable restrictions. 265. Mr. Chinoy relied upon following decisions : (1) Ritesh Agarwal and another v. Securities and Exchange Board of India and others,: (2008) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In my opinion, said decision is not applicable to the present case. As basically the penalties are not imposed retroactively/retrospectively after coming into force of RERA. 269. In the case of Madras Forgings and Allied Industries (C.B.C.) Ltd. (supra), two cheques dated 28.1.1989 and 10.2.1989 were issued in favour of the complainant's firm. In due course the cheques were presented and the same were returned with remarks "exceeds arrangement". On 13.3.1989, the complainant intimated the petitioner company regarding dishonour of the cheques and requested issue of a demand draft for the value of the cheques failing which it was told that the cheques would be presented again before the Bank. Accordingly said cheques were again presented on 29.3.1989 and were dishonored on 13.4.1989. On 27.4.1989, the complainant's firm thereupon issued a notice under-registered post with acknowledgment due to the petitioner-company intimating the dishonour of the cheques and demanding payment within fifteen days of receipt of the said notice. The notice was received by the petitioner on 4.5.1989 but no payment was made within the period of 15 days of receipt of the notice. The complainan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions as to whether or not the Government servant will earn increments of pay during the period of such reduction and whether on the expiry of such period, the reduction will or will not have the effect of postponing the future increments of his pay; (b) reduction to lower timescale of pay, grade, post or service which shall ordinarily be a bar to the promotion of the Government servant to the timescale of pay, grade, post or service from which he was reduced, with or without further directions, regarding conditions of restoration to the grade or post or service from which the Government servant was reduced and his seniority and pay on such restoration to that grade, post or service;" 272. In paragraph-51 it was observed thus: "51. In the case at hand, under the unamended Rule, there were, apart from stoppage of increment with cumulative effect and reduction in rank, grade, post or service, three major punishments, namely, compulsory retirement, removal and dismissal from service by which there was severance of service. The maximum punishment that could have been imposed on an employee after conducting due departmental enquiry was dismissal from service. The rule making authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act (the Parent Act) as applicable to the State of Haryana whereby the right of a co-sharer to preempt a sale has been taken away during the pendency of an appeal filed against a judgment of the High Court affirming the decree passed by the trial Court in a preemption suit, fell for consideration. 274. In paragraph-47, the Apex Court held that the amending Act being prospective in operation does not affect the rights of the parties to the litigation on the date of adjudication of the pre-emption suit and the appellate court is not required to take into account or give effect to the substituted Section 15 introduced by the amending Act. I have already held that the provisions of RERA are prospective in nature. 275. In the case of K.S. Paripoornan (supra), the question, namely, whether the benefit of sub-section (1-A) of Section 23 of the Land Acquisition Act, 1894 is to be granted only in the proceedings for the acquisition of land referred to in Clauses (a) and (b) of Section 30(1) of the Land Acquisition (Amendment) Act, 1984, or it is to be granted in all proceedings pending before the Courts on 24th September, 1984, fell for consideration. In paragraph-117, the majority held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent concepts. Penalty is ordinarily levied for contumacious or wrong conduct and violation of a provision of a particular statute. Interest is compensatory when imposed to set off the loss or prejudice caused on account of nonpayment. 279. In the case of Pyare Lal Sharma (supra), the appellant who, was employed as Chemical Engineer in Jammu & Kashmir Industries Limited, was terminated on 14.6.1983. He absented himself from the duty from Septembers, 1982 and he was asked to explain his absence. Regulation 16.14 of Jammu & Kashmir Industries Employees Service Rules and Regulations was amended on 20.4.1983. In paragraph-21 it was noted that a show cause notice was issued to Sharma on 21.4.1983. The period of absence indicated in the show cause notice was prior to 20.4.1983. The period of absence prior to amendment cannot be taken into consideration. When prior to 20.4.1983, the services of person could not be terminated on the ground of unauthorised absence from duty under Regulation 16.14 then it is wholly illegal to make the absence during that period as a ground for terminating the services of Sharma. It was observed that it is the basic principle of natural justice that no on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eks to prohibit all persons residing in the notified villages during the agricultural season from engaging themselves in the manufacture of bidis. It cannot be denied that there would be a number of infirm and disabled persons, a number of children, old women and petty shop keepers residing in these villages who are incapable of being used for agricultural labour. All such persons are prohibited by law from engaging themselves in the manufacture of bidis; and are thus being deprived of earning their livelihood. It is a matter of common knowledge that there are certain classes of persons residing in every village who do not engage in agricultural operations. They and their womenfolk and children in their leisure hours supplement their income by engaging themselves in bidi business. There seems no reason for prohibiting them from carrying on this occupation. 282. In the case of Namit Sharma (supra), the petitioner had questioned the constitutional validity of sub-sections (5) and (6) of Section 12 and sub-sections (5) and (6) of Section 15 of the Right to Information Act, 2005. It was contended that keeping in view the powers, functions and jurisdiction that the Chief/State Informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, 64 of the Real Estate (Regulation and Development) Act, 2016 fails. These provisions are held to be constitutional, valid and legal. However, one of the qualifications for appointment of a Judicial Member prescribed in Section 46(1)(b) as, "or has been a member of the Indian Legal Service and has held the post of Additional Secretary of that service or any equivalent post," is severed and struck down. We hold that two member Bench of the Tribunal shall always consist of a Judicial Member. We hold that in the constitution of the Tribunal, majority of the members shall always be judicial members. The prayers which are not specifically granted shall be deemed to be rejected. Writ Petition No. 2708 of 2017 is partly allowed. Rule is made absolute to the extent as mentioned above. No order as to costs. Writ Petition Nos. 2737/2017, 2711/2017, 2255/2017, 2727/2017, 2256/2017 and 2730/2017 are dismissed. Rule is discharged. No order as to costs. The Chamber Summons Nos. 223/2017, 224/2017 and Chamber Summons Lodging No. 306/2017 stand disposed of. 289. After pronouncement of the judgment, Mr. Kapil Moye, learned counsel i/by Mr. Anil Singh, learned ASG appearing for Union of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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