M/S. SANROYAL BUILDERS AND CONTRACTORS PVT LIMITED v RINTO ANTO (MSA Nos.1 of 2022 & MSA No.2 of 2022)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE M.R.ANITHA** **WEDNESDAY, THE 9[TH] DAY OF NOVEMBER 2022 / 18TH KARTHIKA, 1944 MSA NO. 1 OF 2022** **APPEAL FILED AGAINST THE ORDER DATED 20.01.2022 IN I.A. NO.72 OF 2021 IN REFA NO.59 OF 2021 BEFORE THE KERALA REAL ESTATE APPELLATE TRIBUNAL, ERNAKULAM ARISING FROM THE ORDER IN CCP 61 OF 2020 DATED 01.11.2021 OF THE ADJUDICATING OFFICER, KERALA REAL ESTATE REGULATORY AUTHORITY** ## **APPELLANT/APPELLANT/RESPONDENT:** M/S. SANROYAL BUILDERS AND CONTRACTORS PVT. LIMITED, HAVING ITS CORPORATE OFFICE AT ROHINI BHAVAN, INDRA NAGAR, PEROORKADA P.O, PIN -695005, REPRESENTED BY ITS MANAGING DIRECTOR MR.SANJUDAS NS. BY ADVS. LEGITH T.KOTTAKKAL LINDONS C.DAVIS ## **RESPONDENT/RESPONDENT/APPLICANT:** RINTO ANTO, S/O ANTO ANTONY, HOUSE NO.19/328, THRISSUR MUNICIPAL CORPORATION,THAZHEKKADAN HOUSE, OLLUKARA.P.O, KALATHODE DESOM, OLLUKARA VILLAGE, THRISSUR TALUK, THRISSUR-680655. BY ADV G.SREEKUMAR (CHELUR) ## **THIS MISC. SECOND APPEAL HAVING COME UP FOR ADMISSION ON 09.11.2022, ALONG WITH MSA NO.2 OF 2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** 2 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 ## **THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE M.R.ANITHA** **WEDNESDAY, THE 9[TH] DAY OF NOVEMBER 2022 / 18TH KARTHIKA, 1944 MSA NO. 2 OF 2022** **APPEAL FILED AGAINST THE ORDER DATED 20.01.2022 IN I.A. NO.70 OF 2021 IN REFA NO.58 OF 2021 BEFORE THE KERALA REAL ESTATE APPELLATE TRIBUNAL, ERNAKULAM ARISING FROM THE ORDER IN CCP 28 OF 2020 DATED 01.11.2021 OF THE ADJUDICATING OFFICER, KERALA** ## **REAL ESTATE REGULATORY AUTHORITY** ## **APPELLANT/APPELLANT/RESPONDENT:** M/S. SANROYAL BUILDERS AND CONTRACTORS PVT LIMITED, HAVING ITS CORPORATE OFFICE AT ROHINI BHAVAN, INDRA NAGAR, PEROORKADA P.O.PIN-695 005, REPRESENTED BY ITS MANAGING DIRECTOR MR. SANJUDAS NS BY ADVS. LEGITH T.KOTTAKKAL LINDONS C.DAVIS ## **RESPONDENT/RESPONDENT/APPLICANT:** RINO ANTO S/O ANTO ANTONY, HOUSE NO 19/328, THRISSUR MUNICIPAL CORPORATION, THEZHEKKADAN HOUSE, OLLUKARA P.O.KALATHODE DESOM, OLLUKARA VILLAGE, THRISSUR TALUK, THRISSUR 680 655 BY ADV G.SREEKUMAR (CHELUR) **THIS MISC. SECOND APPEAL HAVING COME UP FOR ADMISSION ON 09.11.2022, ALONG WITH MSA NO.1 OF 2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 3 **M.R.ANITHA, J. ---------------------------------------M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 ----------------------------------------------JUDGMENT** ## **Dated this the 09[th] day of November, 2022** M.S.A. No.1 of 2022 has been filed against the order in I.A. No.72 of 2021 in REFA No.59 of 2021 before the Kerala Real Estate Appellate Tribunal, Ernakulam, which in turn arise out of common order in CCP No.61 of 2020 of the Adjudicating Officer, Kerala Real Estate Regulatory Authority. 2. M.S.A. No.2 of 2022 has been filed against the order in I.A. No.70 of 2021 in REFA No.58 of 2021 before the Kerala Real Estate Appellate Tribunal, Ernakulam, which in turn arise out of common order in CCP No.28 of 2020 of the Adjudicating Officer, Kerala Real Estate Regulatory Authority. 3. The impugned orders are passed in petitions filed by the 4 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 appellants under Section 43(5) of the Proviso seeking for exemption from deposit of the amount. By the impugned orders Kerala Real Estate Appellate Tribunal (in short Tribunal) dismissed the petitions and directed the appellants to make deposit of the total amounts ordered by the authority, including the advance amount and interest up to the date of filing the appeal and also compensation, and such deposit is directed to be made within one month from the date of order. 4. Heard both sides. 5. When the case came up for admission, interim stay was ordered in both appeals. Since both orders arise out of identical issues both appeals were heard together. 6. According to the learned counsel for the appellants the orders challenged before the Tribunal had been passed by the Adjudicating Officer, who has no jurisdiction to pass the orders impugned before Tribunal in view of the dictum laid down in **M/S. Newtech Promoters and Developers Private Limited v. State of UP and Others etc. (2021) 13 SCALE 466.** The Adjudicating 5 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 Officer passed the orders without jurisdiction and hence, appellants are not bound to comply the order as per the Proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016. Hence, the learned counsel seeks for setting aside the impugned orders. 7. The learned counsel for the respondent on the other hand would contend that the order passed by the Adjudicating Officer has been challenged by the appellants before Tribunal and hence he is bound to comply the Proviso to Section 43(5). It is also his contention that it is a beneficial legislation and no discretion has been conferred upon the Tribunal and as per the Proviso the party is bound to deposit the amount as provided therein. 8. To substantiate the contentions, the learned counsel bring to my attention that **Chief Engineer, Hydel Project and Others v. Ravinder Nath and Others (2008) AIR (SCW) 1412 : (2008) AIR (SC) 1315** where in it has been held that a decree passed by a court without jurisdiction is a nullity. Once the original decree itself is held to be without jurisdiction and hit by the doctrine of coram 6 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 non-judice there would be no question of upholding it merely on the ground that objection as to jurisdiction was not taken at the initial, first Appellate or the second Appellate stage. 9. But in the present case, an interlocutory order has been passed by the Tribunal and main case is pending before the Tribunal and the question of jurisdiction is yet to be decided by the Tribunal. So, the decision cited is not squarely applicable to the case in hand. 10. Petitioners are aggrieved by the order passed by the Tribunal dismissing their petition seeking exemption from deposit as contemplate under section 43(5) of the Real Estate (Regulation and Development) Act, 2016 (in short the Act). It is apposite in this context to quote Section 43(5) which reads thus: ## _**-** 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, tt shall not be_ 7 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 _[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._ 11. On going through the Proviso, it could be seen that as per which whenever an appeal is filed before the Appellate Tribunal it cannot entertain the appeal without promoter first, having deposited at least 30% 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. There is specific direction to the Tribunal not to entertain the appeal filed by the promoter unless he complied the stipulations in the proviso. In the case of appeal against the penalty, promoter can file 8 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 appeal at least on deposit of 30% or such higher amount as may be directed by the Tribunal. Section 43(5) deals with appeal against any direction or decision or order made by the Authority or by an adjudicating officer under the Act. Only in the case of penalty the Tribunal has discretion to entertain the appeal on deposit of 30% of the penalty or such higher percentage as determined by the Tribunal. In other words, no such power is given to the Tribunal to entertain the appeal in the case of other orders provided under sub section 5 . 12. Learned counsel for the respondent relied on **M/S Newtech Promoters Developers Private Ltd v. State of UP and Others [2021 13 SCALE 466]** in this context. In that decision the Apex Court considered the constitutional validity of Section 43 (5) of the Act. It has been contended on behalf of the appellants in that case that the right of appreciation of the defence at the appellate stage which is made available to them under the statute became nugatory because of the onerous mandatory requirement of predeposit in entertaining the appeal, only on the promoter who deposit the amount provided therein. Para No.127, 128, of the said decision M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 9 ## are relevant in this context which read thus: _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 complaint for refund of the amount of payment which the allottee/consumer has deposited with the promoter and at a later stage, when the promoter is unable to hand over possession in breach of the conditions of the agreement between the parties, are being instituted at the instance of the consumer/allotee demanding for refund of the amount deposited by them and after the scrutiny of facts being made based on the contemporaneous documentary evidence on record made available by the respective parties, the legislature in its wisdom has intended to ensure that the money which has been computed by the authority at least must be safeguarded if the promoter intends to prefer an appeal before the tribunal and in case, the appeal fails at a later stage, it becomes difficult for the consumer/allottee to get the amount recovered which has been determined by the authority and to avoid the consumer/allottee to go from pillar to post for recovery of the amount that has been determined by the authority in fact, belongs to the allottee at a later stage could be saved from all the miseries which come forward against him._ 10 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 _128. At the same time, it will avoid unscrupulous and uncalled for litigation at the appellate stage and restrict the promoter if feels that there is some manifest material irregularity being committed or his defence has not been properly appreciated at the first stage, would prefer an appeal for reappraisal of the evidence on record provided substantive compliance of the condition of pre-deposit is made over, the rights of the parties inter se could easily be saved for adjudication at the appellate stage._ 13. The Apex Court also discussed the various statutes like proviso to Section 18 of SARFAESI Act 2002 (Proviso to Section 18) which provides for pre-deposit for entertaining appeal. Rajasthan Stamp Act, 1998 as per which no revision application could be entertained unless it was accompanied by a satisfactory proof of 50% of the recoverable amount and Section 19 of the Consumer Protection Act, 1986 which prescribes condition for pre-deposit etc. and ultimately found that the intention of the present Act appears to be that the promoters ought to show their bonafides by depositing the amount so contemplated. It is also held that right of appeal is a creature of statute without a statutory provision creating such right 11 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 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. Ultimately, it has been held that the obligation cast upon the promoter under Section 43(5) of the Act, being a class in itself, and the promoters who are in receipt of money which is being claimed by the home byers/alottes for refund and determined in the first place by the competent authority, if legislature in its wisdom intended to ensure that money once determined by the authority, be saved if appeal 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, that in no circumstance can be said to be onerous as prayed for or in violation of Article 14 or 19(1)(g) of the Constitution of India. 15. By the impugned orders in I.A. No.72/2021 and I.A. No.70/2021 the Tribunal dismissed the petitions seeking for exemption from deposit as contemplated under the proviso to Sub Section 5 of Section 43 for entertaining REFA No.59 of 2021 and 58 12 M.S.A. Nos.1 of 2022 & M.S.A. No.2 of 2022 of 2021 against the orders passed by the Adjudicating Officer in CCP No.61 of 2020 and CCP No.28 of 2020. It is perfectly in order. Hence, I do not find any reason to interfere with the impugned orders passed by the Tribunal. It is open for the appellants to raise all the contentions on merits before the Tribunal. In the result, both appeal stand dismissed. All pending applications stand closed. Sd/- ## **M.R.ANITHA JUDGE** SMF //TRUE COPY// PA TO JUDGE