TMI Blog2021 (12) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... nsparent manner so that the interest of consumers in the real estate sector is protected by all means and Sections 13, 18(1) and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of the consumers/allottees. In the given circumstances, if the Act is held prospective then the adjudicatory mechanism under Section 31 would not be available to any of the allottee for an on going project. Thus, it negates the contention of the promoters regarding the contractual terms having an overriding effect over the retrospective applicability of the Act, even on facts of this case - The legislative power to make the law with prospective/retrospective effect is well recognized and it would not be permissible for the appellants/promoters to say that they have any vested right in dealing with the completion of the project by leaving the allottees in lurch, in a helpless and miserable condition that at least may not be acceptable within the four corners of law. From the scheme of the Act 2016, its application is retroactive in character and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 other than compensation as envisaged, if extended to the adjudicating officer as prayed that, may intend to expand the ambit and scope of the powers and functions of the adjudicating officer under Section 71 and that would be against the mandate of the Act 2016. Whether Section 81 of the Act authorizes the authority to delegate its powers to a single member of the authority to hear complaints instituted under Section 31 of the Act? - HELD THAT:- The express provision of delegation of power under the SEBI Act is akin to Section 81 of the Act 2016. This Court observed that if the power has been delegated by the competent authority under the statute, such action, if being exercised by a single member cannot be said to be dehors the provisions of the Act - Section 81 of the Act 2016 empowers the authority, by general or special order in writing, to delegate its powers to any member of the authority, subject to conditions as may be specified in the order, such of the powers and functions under the Act. What has been excluded is the power to make regulations under Section 85, rest of the powers exercised by the authority can always be delegated to any of its members obviously for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be preferred at the instance of the promoter after due compliance of pre deposit as envisaged under Section 43(5) of the Act, in no circumstance can be said to be onerous as prayed for or in violation of Articles 14 or 19(1)(g) of the Constitution of India. Whether the authority has power to issue recovery certificate for recovery of the principal amount under Section 40(1) of the Act? - HELD THAT:- It is settled principle of law that if the plain interpretation does not fulfil the mandate and object of the Act, this Court has to interpret the law in consonance with the spirit and purpose of the statute. There is indeed a visible inconsistency in the powers of the authority regarding refund of the amount received by the promoter and the provision of law in Section 18 and the text of the provision by which such refund can be referred under Section 40(1). While harmonising the construction of the scheme of the Act with the right of recovery as mandated in Section 40(1) of the Act keeping in mind the intention of the legislature to provide for a speedy recovery of the amount invested by the allottee along with the interest incurred thereon is self explanatory. However, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awal, Adv., Mr. Shantanu Singh, Adv., Mr. Rajesh Inamdar, Adv., Mr. Aniket Bhattacharya, Adv., Ms. Pankhuri Bhardwaj, Adv., Mr. Sahil Monga, Adv., Ms. Aishani Narain, Adv., M/S. VKC Law Offices, AOR, Mr. Aman Gupta, AOR, Mr. Rajeev Kumar Dubey, Adv.,Mr. Ashiwan Mishra, Adv., Mr. Kamlendra Mishra, AOR, Mr. Sumit R. Sharma, AOR, Ms. Diksha Sharma, Adv. JUDGMENT Rastogi, J. 1. Leave granted. 2. The present batch of appeals are filed at the instance of promoter/real estate developer assailing the common issues and certain provisions of The Real Estate(Regulation and Development) Act, 2016(hereinafter being referred to as the Act ), The Uttar Pradesh Real Estate(Regulation and Development) Rules, 2016 (hereinafter referred to as the Rules ) and the functioning of the Uttar Pradesh Real Estate Regulatory Authority (hereinafter referred to as the Authority ), although being decided by separate orders by the High Court of Allahabad, since the self same questions are involved with the consent are being decided by the present judgment. 3. The respondents herein are the allottees/home buyers who have made their substantial investment from their hard earned savings unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g sector could not be meted out by the Government at its own level for various reasons to meet the requirement, the private players entered into the real estate sector in meeting out the rising demand of housing. Though availability of loans, both from public and private banks, become easier, still the High rate of interest and the EMI has posed additional financial burden on the people. 7. At the given time, the real estate and housing sector was largely unregulated and the consequence was that consumers were unable to procure complete information for enforced accountability towards builders and developers in the absence of an effective mechanism in place. Though, The Consumer Protection Act, 1986 was available to cater the demand of home buyers in the real estate sector but the experience shows that this mechanism was inadequate to address the needs of the home buyers and promoters in the real estate sector. 8. At this juncture, the need for Real Estate(Regulation) Bill was badly felt for establishing an oversight mechanism to enforce accountability to the real estate sector and providing an adjudicating machinery for speedy dispute redressal mechanism and safeguarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the sector, thus paving the way for accelerated growth and investments in the long run. 11. Some of the relevant Statement of Objects and Reasons are extracted as under: 4 (d) to impose liability upon the promoter to pay such compensation to the allottees, in the manner as provided under the proposed legislation, in case if he fails to discharge any obligations imposed on him under the proposed legislation; (f) the functions of the Authority shall, inter alia, include (i) to render advice to the appropriate Government in matters relating to the development of real estate sector; (ii) to publish and maintain a website of records of all real estate projects for which registration has been given, with such details as may be prescribed; (iii) to ensure compliance of the obligations cast upon the promoters, the allotees and the real estate agents under the proposed legislation. (i) to appoint an adjudicating officer by the Authority for adjudging compensation under sections 12, 14 and 16 of the proposed legislation. ... 12. The Bill provides for establishment of the authority for regulation and promotion of real estate sector, to ensure sale of plo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of real estate projects. Section 3 mandates prior registration of real estate projects including ongoing projects with the Real Estate Regulatory Authority. Section 4 prescribes the ingredients of application by the promotor for registration of real estate projects. In particular, the promotor is required to state in the application under subsection 2(L)(c ) of Section 4, the timelines for completion of the project. Section 5 relates to the grant of registration by the authority and inter alia states that no application shall be rejected unless the applicant has been given an opportunity of being heard in the matter. As per Section 5(3) of the Act, the registration is coterminus with the completion of the project. Under Section 6, the authority can extend registration based on the facts of each case or the occurrence of the force majeure. Section 7 pertains to revocation of registration. As per Section 8, the authority is under obligation to inter alia carry out the remaining development work where there is lapse or revocation of the registration. 16. Chapter III lays down, functions and duties of promotor which is relevant for the purpose of the present case. Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub sections (1), (2) and (3) of Section 18 of the Act, the different contingencies spelt out therein, (A) the allottee can either seek refund of the amount by withdrawing from the project; (B) such refund could be made together with interest as may be prescribed; (C) in addition, can also claim compensation payable under Sections 18(2) and 18(3) of the Act; (D) the allottee has the liberty, if he does not intend to withdraw from the project, will be required to be paid interest by the promoter for every months delay in handing over possession at such rates as may be prescribed. 23. Correspondingly, Section 19 of the Act spells out Rights and duties of allottees . Section 19(3) makes the allottee entitled to claim possession of the apartment, plot or building, as the case may be. Section 19(4) provides that if the promoter fails to comply or being unable to give possession of the apartment, plot or building in terms of the agreement, it makes the allottees entitled to claim the refund of amount paid along with interest and compensation in the manner prescribed under the Act. 24. Section 19(4) is almost a mirror provision to Section 18(1) of the Act. Both these provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, rules or regulations, and to issue directions from time to time to the promoter, allottee or real estate agents, if considered necessary can impose penalty or interest if failed to carry out its obligations. 28. At the same time, Chapter VIII of the Act talks about offences, penalties and adjudication. Various kinds of penalties are set out in Sections 59 to 68. Each of these provisions clearly states that the penalty thereunder is required to be determined by the authority. 29. We are concerned with Section 71 of the Act titled power to adjudicate which is specific to the adjudicating officer. Subsection(1) of Section 71 opens with the words for the purpose of adjudging compensation under Sections 12, 14, 18 and 19 , the Authority has to appoint in consultation with the appropriate Government, a judicial officer not below the rank of the District Judge, as an adjudicating officer, to hold inquiry in the prescribed manner after giving a person concerned a reasonable opportunity of hearing. At the same time, sub section (2) casts an obligation upon the adjudicating officer that while adjudging compensation under sub section (1), the application has to be dealt with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umer protection, uniformity and standardisation of business practices and transactions in the real estate sector, to ensure greater accountability towards consumers, to overcome frauds and delays and also the higher transaction costs, and accordingly intended to balance the interests of consumers and promoters by imposing certain duties and responsibilities on both. The deliberation on the subject was going on since 2013 but finally the Act was enacted in the year 2016 with effect from 25th March, 2016. 33. Under Chapter II of the Act 2016, registration of real estate projects became mandatory and to make the statute applicable and to take its place under sub Section (1) of Section 3, it was made statutory that without registering the real estate project with a real estate regulatory authority established under the Act, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner a plot, apartment or building, as the case may be in any real estate project but with the aid of proviso to Section 3(1), it was mandated that such of the projects which are ongoing on the date of commencement of the Act and more specifically the project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reads as under: 2(q) completion certificate means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws; 2(zf) occupancy certificate means the occupancy certificate, or such other certificate, by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity; 37. Looking to the scheme of Act 2016 and Section 3 in particular of which a detailed discussion has been made, all ongoing projects that commence prior to the Act and in respect to which completion certificate has not been issued are covered under the Act. It manifests that the legislative intent is to make the Act applicable not only to the projects which were yet to commence after the Act became operational but also to bring under its fold the ongoing projects and to protect from its inception the inter se rights of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel submits that the said proviso ought to be read with Section 3(2)(b), which specifically excludes projects where completion certificate has been received prior to the commencement of the Act. Thus, those projects under Section 3(2) need not be registered under the Act and, therefore, the intent of the Act hinges on whether or not a project has received a completion certificate on the date of commencement of the Act. 41. The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible, i.e., the legislature consciously enacted a retroactive statute to ensure sale of plot, apartment or building, real estate project is done in an efficient and transparent manner so that the interest of consumers in the real estate sector is protected by all means and Sections 13, 18(1) and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of the consumers/allottees. In the given circumstances, if the Act is held prospective then the adjudicatory mechanism under Section 31 would not be available to any of the allottee for an on going project. Thus, it neg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power to legislate even retrospectively to take into its fold the pre existing contract and rights executed between the parties in the larger public interest. 46. The consequences for breach of such obligations under the Act are prospective in operation and in case ongoing project, of which completion certificate is not obtained, are not to be covered under the Act, there is every likelihood of classifications in respect of underdeveloped ongoing project and the new project to be commenced. 47. The legislative power to make the law with prospective/retrospective effect is well recognized and it would not be permissible for the appellants/promoters to say that they have any vested right in dealing with the completion of the project by leaving the allottees in lurch, in a helpless and miserable condition that at least may not be acceptable within the four corners of law. 48. The distinction between retrospective and retroactive has been explained by this Court in Jay Mahakali Rolling Mills Vs. Union of India and Others 2007(12) SCC 198, which reads as under: 8. Retrospective means looking backward, contemplating what is past, having reference to a statute or thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the requisites for its action is drawn from a time antecedent to its passing, at the same time, retroactive statute means a statute which creates a new obligation on transactions or considerations already passed or destroys or impairs vested rights. 52. The Parliament intended to bring within the fold of the statute the ongoing real estate projects in its wide amplitude used the term converting and existing building or a part thereof into apartments including every kind of developmental activity either existing or upcoming in future under Section 3(1) of the Act, the intention of the legislature by necessary implication and without any ambiguity is to include those projects which were ongoing and in cases where completion certificate has not been issued within fold of the Act. 53. That even the terms of the agreement to sale or home buyers agreement invariably indicates the intention of the developer that any subsequent legislation, rules and regulations etc. issued by competent authorities will be binding on the parties. The clauses have imposed the applicability of subsequent legislations to be applicable and binding on the flat buyer/allottee and either of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act. 57. Section 14 relates to adherence to sanctioned plans and project specifications by the promoter. Section 14(3) empowers the allottee to receive compensation in the event there is any structural defect or any other defect in workmanship etc. Section 14(3) reads as under: (3) In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter's failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act. 58. Section 18 starts with the marginal note Return of amount and compensation . The two aspects namely return of amount and compensation are di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of suspension or revocation of his registration under the provisions of this Act or the rules or regulations made thereunder. 60. Section 31 relates to the filing of complaints to the authority and reads as follows: Filing of complaints with the Authority or the adjudicating officer- (1) Any aggrieved person may file a complaint with the Authority orthe adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder, against any promoter, allottee or real estate agent, as the case may be. 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. (2) The form, manner and fees for filing complaint under sub section (1) shall be such as may be prescribed. 61. Section 71 relates to Power to Adjudicate vested with the adjudicating officer while adjudging compensation which reads as follows: 71. Power to adjudicate.- (1) For the purpose of adjudging compensation under sections 12, 14, 18 and section 19, the Authority shall appoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the default; (b) the amount of loss caused as a result of thedefault; (c) the repetitive nature of the default; (d) such other factors which the adjudicating officerconsiders necessary to the case in furtherance of justice. 63. The Uttar Pradesh Real Estate Regulatory Authority in exercise of its power under Section 85 of the Act 2016 has framed its regulations on 27th February, 2019 called as Uttar Pradesh Real Estate Regulatory Authority(General) Regulations, 2019(hereinafter being referred to as Regulations 2019 ). 64. Regulations 18 to 23 deal with meetings of the authority, other than adjudication proceedings. Regulation 24 falls in the chapter of Adjudicatory Proceedings and reads as follows: 24(a) For adjudication proceedings with respect to complaints filed with the Authority, the Authority may, by order, direct that specific matters or issues be heard and decided by a single bench of either the Chairperson or any Member of the Authority. (b) The Authority, in consultation with the state government, willappoint Adjudicating Officers on the Panel of U.P. RERA for the purposes of adjudicating the matters of compensation admissible under the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating officer for compensation under Sections 12, 14, 18 and 19 in Form N which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank in favour of regulatory authority and payable at the main branch of that bank at the station where the rest of the said regulatory authority is situated. (emphasis supplied) 67. Rule 33(2) of the Rules 2016 delineates the procedure which the authority has to follow in making inquiry to the allegations or violations of the provisions of the Act, rules and regulations. At the given time, Rule 34(2) delineates the procedure to be followed by the adjudicating officer while adjudging quantum of compensation and interest which the person aggrieved is entitled for under the provisions of the Act. 68. Mr. Kapil Sibal, learned senior counsel for the appellants submits that both the authority and the adjudicating officer operate in completely distinct spheres. The authority and the adjudicating officer are defined under Sections 2(i) and 2(a) of the Act and are, therefore, creature of statute and their powers and respective jurisdiction(s) are explicitly delineated in the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involves a full fledged adjudicatory process which is more complex than that involved in determining refund. To do so, it would tantamount to regressing into the very malaise that the legislature intended to liberate the allottees homebuyers. The result of conflating the rights and/or relegating the allottees to the adjudicating officer would amount to a compromise of the timeliness of the right to refund on demand. It would also deter and daunt allottees from seeking compensation because in the process the remedies would be clubbed and the availability of refund would get relatively delayed as compensation requires a more elaborate adjudication process (even though the same is required to be completed in 60 days). The authority to determine a claim for refund on demand while the adjudicating officer to determine the claim for compensation. 73. The expression on demand which follows the right to return of amount is indicative of the priority, immediacy and expediency which is accorded to the right to refund. Thus, according to her, the expressions refund and return of amount is an act of restitution, and the obligation to restitute lies on the person or the authority tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for refund of the amount or for compensation as defined under Section 71(1) of the Act, but after the Act 2016 has come into force, if any person aggrieved wants to make complaint for refund against the promotor or real estate agent other than compensation, it is to be lodged to the regulatory authority and for adjudging compensation to the adjudicating officer, and the delineation has been made to expedite the process of adjudication invoked by the person aggrieved when a complaint has been made under Section 31 of the Act to be adjudicated either by the authority/adjudicating officer as per the procedure prescribed under the Act. 77. The further submission made by the learned counsel for the appellants is that the return of the amount adversely impacts the promotor and such a question can be looked into by the adjudicating officer in the better prospective. The submission has no foundation for the reason that the legislative intention and mandate is clear that Section 18(1) is an indefeasible right of the allottee to get a return of the amount on demand if the promoter is unable to handover possession in terms of the agreement for sale or failed to complete the project by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulatory authority/adjudicating officer, it is always subject to appeal before the Tribunal under Section 43(5) provided condition of pre deposit being complied with can be further challenged in appeal before the High Court under Section 58 of the Act and, thus, the legislature has put reasonable restriction and safeguards at all stages. 80. The further submission made by learned counsel for the appellants that if the allottee has defaulted the terms of the agreement and still refund is claimed which can be possible, to be determined by the adjudicating officer. The submission appears to be attractive but is not supported with legislative intent for the reason that if the allottee has made a default either in making instalments or made any breach of the agreement, the promoter has a right to cancel the allotment in terms of Section 11(5) of the Act and proviso to sub section 5 of Section 11 enables the allottee to approach the regulatory authority to question the termination or cancellation of the agreement by the promotor and thus, the interest of the promoter is equally safeguarded. 81. The opening words of Section 71(1) of the Act make it clear that the scope and function ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the given circumstances, either by the regulatory authority or the adjudicating officer. 83. So far as the single complaint is filed seeking a combination of reliefs, it is suffice to say, that after the rules have been framed, the aggrieved person has to file complaint in a separate format. If there is a violation of the provisions of Sections 12, 14, 18 and 19, the person aggrieved has to file a complaint as per form (M) or for compensation under form (N) as referred to under Rules 33(1) and 34(1) of the Rules. The procedure for inquiry is different in both the set of adjudication and as observed, there is no room for any inconsistency and the power of adjudication being delineated, still if composite application is filed, can be segregated at the appropriate stage. 84. So far as submission in respect of the expeditious disposal of the application before the adjudicating officer, as referred to under sub section (2) of Section 71 is concerned, it pre supposes that the adjudicatory mechanism provided under Section 71(3) of the Act has to be disposed of within 60 days. It is expected by the regulatory authority to dispose of the application expeditiously and not to restrai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority in its meeting held on 14th August 2018, had earlier decided to delegate the hearing of complaints to the benches comprising of two members each but later looking into the volume of complaints which were filed by the home buyers which rose to about 36,826 complaints, the authority in its later meeting held on 5th December, 2018 empowered the single member to hear the complaints relating to refund of the amount filed under Section 31 of the Act. 88. Mr. Gopal Sankarnarayanan, learned counsel for the appellants submits that if this Court comes to the conclusion that other than adjudging compensation wherever provided all other elements/components including refund of the amount and interest etc. vests for adjudication by the authority, in that event, such power vests with the authority constituted under Section 21 and is not open to be delegated in exercise of power under Section 81 of the Act to a single member of the authority and such delegation is a complete abuse of power vested with the authority and such orders passed by the single member of the authority in directing refund of the amount with interest are wholly without jurisdiction and is in contravention to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Shyam Sunder Jhunjhunwala and Others 1962(2) SCR 339. 92. Learned counsel further submits that according to him, the powers which have been exercised by the authority under Sections 12, 14, 18 and 19 of the Act have the trappings of the judicial function which in no manner can be delegated without being expressly bestowed. Placing reliance on two decisions of the Queen s Bench in Barnard Vs. National Dock Labour Board 1953(2) QB 18 and Vine Vs. National Dock Labour Board 1956(1) QB 658 and taking assistance thereof, learned counsel submits that the judgments indicated above makes it clear that the delegation of judicial power must be express; that a provision of quorum for a quasi judicial body is distinguishable from the delegation of power to the exclusion of other members of that body; and the reasons of workload cannot trump the legal requirement. These principles have been adopted by this Court consistently in Bombay Municipal Corporation Vs. Dhondu Narayan Chowdhary 1965(2) SCR 929; Sahni Silk Mills(P) Ltd. and Another Vs. Employees State Insurance Corporation 1994(5) SCC 346; Jagannath Temple Managing Committee Vs. Siddha Math and Others 2015(16) SCC 542. 93. Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 99. Learned counsel further submits that almost in a pari materia scheme, Section 29 A of the SEBI Act gives the power to delegate and Section 19 of the SEBI Act empowers the board to delegate its power to any member of the Board has been examined by this Court in Saurashtra Kutch Stock Exchange Ltd. Vs. Securities and Exchange Board of India and Another 2012(13) SCC 501. This Court has approved the power of delegation to a single member of the respective authority and held that such delegation is always permissible in law unless specifically prohibited and as long as there is a legislative sanction for delegation of even judicial power, there is no illegality as held in Bombay Municipal Corporation(supra); State of Uttar Pradesh Vs. Batuk Deo Pati Tripathi and Another 1978(2) SCC 102 Heinz India Private Limited and Another Vs. State of Uttar Pradesh 2012(5) SCC 443; and taking assistance thereof, learned counsel submits that such delegation of power to a single member of the authority in deciding application for refund of the amount and interest under Section 18 of the Act is well within the jurisdiction of the authority to its delegatee more so when the power to delegate un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be decided by a majority of votes by the Members present and voting, and in the event of an equality of votes, the Chairperson or in his absence, the person presiding shall have a second or casting vote. (4) The questions which come up before the Authority shall bedealt with as expeditiously as possible and the Authority shall dispose of the same within a period of sixty days from the date of receipt of the application: Provided that where any such application could not be disposed of within the said period of sixty days, the Authority shall record its reasons in writing for not disposing of the application within that period. 31. (1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the case may be. 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. (2) The form, manner and fees for filing complaint und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act casts upon the authority. The legislative intention as reflected from Section 29 is a recognition of the rationale that policy matters ought to be considered and decided by the entire strength of the authority so that the policy decisions reflect the acquired experience of the members and Chairman of the authority. 107. It may be relevant to note that the authority in its meeting held on 5th December, 2018 in exercise of its power under Section 81 of the Act for disposal of complaints under Section 31 delegated its power to a single member of the authority. The extract of the minutes of the meeting dated 5th December, 2018 relevant for the purpose is extracted as under: Sl. No. Agenda 5.01 Both the benches of Uttar Pradesh Real Estate Regulatory Authority in the month of December 2018 and subsequently also while working as single benches as per the requirement, proposal for disposal of complaint cases at Lucknow and Gautambudh Nagar on same dates Point wise decision on agenda is as under:Agenda poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Securities and Exchange Board of India. Section 19 of the SEBI Act, 1992 reads as under: 19. Delegation.-The Board may, by general or special order in writing delegate to any member, officer of the Board or any other person subject to such conditions, if any, as may be specified in the order, such of its powers and functions under this Act (except the powers under Section 29) as it may deem necessary. Thus, the above Notification dated 13 9 1994 issued in exercise of power under Section 29 A of the SCR Act of 1956, read with Section 19 of the SEBI Act, would mean that the Board may in writing delegate its power to any member of the Board and, therefore, the power exercised by the Full Time Member of the Board under Section 11 of the SEBI Act, 1992, or even withdrawal or recognition under Section 5 of the SCR Act of 1956, cannot be said to be unjust or arbitrary or dehors the provisions of the statute and, therefore, the contention of Mr Shelat that no remedy of appeal is available to the petitioner cannot be accepted. 9. In Para 2 of the civil appeal, the following question of law has been framed: Whether the whole time single member of SEBI has no jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. But in the absence of any data as to the number of cases that arise for consideration involving a challenge to the demands raised by the Market Committee and the nature of the disputes that generally fall for determination in such cases, it will not be possible for this Court to step in and direct an alteration in the mechanism that is currently in place. The power to decide the revisions vests with the Board who also enjoys the power to delegate that function to the Director. So long as there is statutory sanction for the Director to exercise the revisional power vested in the Board, any argument that such a delegation is either impermissible or does not serve the purpose of providing a suitable machinery for adjudication of the disputes shall have to be rejected. 112. Section 81 of the Act 2016 empowers the authority, by general or special order in writing, to delegate its powers to any member of the authority, subject to conditions as may be specified in the order, such of the powers and functions under the Act. What has been excluded is the power to make regulations under Section 85, rest of the powers exercised by the authority can always be delegated to any of its memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the promoters that Section 81 of the Act empowers even delegation to any officer of the authority or any other person, it is true that the authority, by general or special order, can delegate any of its powers and functions to be exercised by any member or officer of the authority or any other person but we are not examining the delegation of power to any third party. To be more specific, this Court is examining the limited question as to whether the power under Section 81 of the Act can be delegated by the authority to any of its member to decide the complaint under Section 31 of the Act. What has been urged by learned counsel for the promoters is hypothetical which does not arise in the facts of the case. If the delegation is made at any point of time which is in contravention to the scheme of the Act or is not going to serve the purpose and object with which power to delegate has been mandated under Section 81 of the Act, it is always open for judicial review. 117. The further submission made by learned counsel for the appellants that Section 81 of the Act permits the authority to delegate such powers and functions to any member of the authority which are m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e examine the challenge to the proviso to Section 43(5) of the Act of making pre deposit for entertaining an appeal before the Tribunal, it may be apposite to take note of Section 43(5) of the Act, 2016. Section 43(5) reads as follows: 43. Establishment of Real Estate Appellate Tribunal . (5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter: Provided that where a promoter files an appeal with the Appellate Tribunal, it shall 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. 122. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... houlders of the allottees under Section 19 of the Act at a given time, several onerous duties and obligations have been imposed on the promoters i.e. registration, duties of promoters, obligations of promoters, adherence to sanctioned plans, insurance of real estate, payment of penalty, interest and compensation, etc. under Chapters III and VIII of the Act 2016. This classification between consumers and promoters is based upon the intelligible differentia between the rights, duties and obligations cast upon the allottees/home buyers and the promoters and is in furtherance of the object and purpose of the Act to protect the interest of the consumers vis a viz., the promoters in the real estate sector. The promoters and allottees are distinctly identifiable, separate class of persons having been differently and separately dealt with under the various provisions of the Act. 126. Therefore, the question of discrimination in the first place does not arise which has been alleged as they fall under distinct and different categories/classes. 127. It may further be noticed that under the present real estate sector which is now being regulated under the provisions of the Act 2016, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons to be recorded in writing, reduce the amount to not less than twentyfive per cent. of debt referred to in the second proviso. 130. The intention of the legislature appears to be to ensure that the rights of the decree holder (the successful party) is to be protected and only genuine bona fide appeals are to be entertained. While interpretating Section 18 of SARFAESI Act, this Court in Narayan Chandra Ghosh Vs. UCO Bank and Others (2011) 4 SCC 548 observed as under: 8. It is well settled that when a statute confers a right of appeal, while granting the right, the legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of pre deposit under subsection (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act. In that view of the matter, no court, much less the Appellate Tribunal, a creature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumer Protection Act, 1986 deals with the appeals against the order made by the State Commission in exercise of its power conferred by sub clause (i) of clause (a) of Section 17 and the said section reads as follows: 19. Appeals.-Any person aggrieved by an order made by the State Commission in exercise of its powers conferred by sub clause (i) of clause (a) of Section 17 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed: Provided that the National Commission may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period: Provided further that no appeal by a person, who is required to pay any amount in terms of an order of the State Commission, shall be entertained by the National Commission unless the appellant has deposited in the prescribed manner fifty per cent of the amount or rupees thirty five thousand, whichever is less. On plain reading of the aforesaid Section 19, we find that the second proviso to Section 19 of the Act relates to pre deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(5) of the Punjab Value Added Tax Act, 2005 (PVAT) which imposes a condition of 25 per cent of pre deposit for hearing of first appeal has been upheld. Section 62(5) of the PVAT Act reads as follows: 62. First Appeal (5) No appeal shall be entertained, unless such appeal is accompanied by satisfactory proof of the prior minimum payment of twenty five per cent of the total amount of tax, penalty and interest, if any. .. 135. To be noticed, the intention of the instant legislation appears to be that the promoters ought to show their bona fides by depositing the amount so contemplated. 136. It is indeed the right of appeal which is a creature of the statute, without a statutory provision, creating such a right the person aggrieved is not entitled to file the appeal. It is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi judicial litigations and it is always be circumscribed with the conditions of grant. At the given time, it is open for the legislature in its wisdom to enact a law that no appeal shall lie or it may lie on fulfilment of precondition, if any, against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of authority to direct the refund of the principal amount is explicit in Section 18 and the interest that is payable is on the principal amount in other words, there is no interest in the absence of a principal amount being determined by the competent authority. Further the statute as such is read to mean that the principal sum with interest has become a composite amount quantified upon to be recovered as arrears of land revenue under Section 40(1) of the Act. 140. It is settled principle of law that if the plain interpretation does not fulfil the mandate and object of the Act, this Court has to interpret the law in consonance with the spirit and purpose of the statute. There is indeed a visible inconsistency in the powers of the authority regarding refund of the amount received by the promoter and the provision of law in Section 18 and the text of the provision by which such refund can be referred under Section 40(1). While harmonising the construction of the scheme of the Act with the right of recovery as mandated in Section 40(1) of the Act keeping in mind the intention of the legislature to provide for a speedy recovery of the amount invested by the allottee along ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
