Recently the Bombay High Court has dismissed the Second Appeal of a Real Estate Company challenging the Order of Real Estate Appellate Tribunal, which rejected the appeal on the ground of non-deposition of the amount awarded by Adjudicating Authority.
The Bombay High Court held that the question of jurisdiction and premature cause of action, are merits of the case, therefore Pre-Deposit is mandatory in appeal.
In this case, the complainant had purchased six plots of land including a warehouse building from the respondent-promoter. An agreement for sale was executed on 10.12.2009, the possession of the plots was supposed to be handed over on or before 09.03.2010.
The possession of the plots was not handed over to the allottee and as per condition no.4 of the sale agreement, the promoter was liable to compensate the complainant for loss of rent.
Thereafter compensation amount was calculated to be Rs 5.4 crores till 30 June 2018. As the possession was not handed over, the allottee filed a case before the RERA.
The adjudicating officer ordered the respondent promoter to pay the allottee Rs. 6,30,000 per month as rent and it was supposed to be calculated from 9 September 2010 and till handing over possession was complete.
The order was challenged before the Real Estate Appellate Tribunal and an application was moved for waiver of Pre-deposit, under sub-section (5) of Section 43 of the RERA, Act.
As the Pre deposit was not made the appeal was dismissed. Aggrieved by the order passed by the Appellate Tribunal, the respondent-promoter moved the Bombay High Court.
Proceeding before the High Court
Counsel for the appellant raised the following contention before the Bombay High Court:
- It was submitted that the Appellant was not liable to make any pre-deposit under the proviso to Section 43 (5) of the Act because of the following three reason:-
- Further contention was that the appellant was not a promoter since the agreement in question was not an agreement for sale but an agreement in lieu of the Respondent’s share in the partnership of the Appellant. It was submitted that the respondent was a partner in the appellant firm and the agreement was executed when the respondent retired and his share was given to him in the form of plots.
- Further, It was submitted that the original claim of the respondent was premature and also, devoid of merit.
- In the order, the adjudication officer had awarded liquidated damages, however, the officer had no jurisdiction to award such damages.
Reasoning of the Bombay High Court
The Bombay High Court reasoned that the appellant entered into an agreement to sale with the respondent No.1 and he was duty bound to hand over the possession of plots in question.
It was further observed by the Bombay High Court that the agreement was an agreement for sale even if the purpose was to provide plots to the respondent to satisfy his claim towards the partnership in the appellant company.
The Bombay High Court opined that the project in question was a real estate project, and the appellant was a promoter while the respondent no.1 was an allottee. So, the appeal filed before the Appellate Tribunal should be treated as an appeal filed by a Promoter and therefore the pre-deposit should have been made as per Section 43 (5) of RERA, Act.
It has been observed by the Bombay High Court that even if the appeal was premature or the jurisdiction of the Adjudicating officer was in question, these are matters of merit in the appeal , therefore the pre-deposit is mandatory.
The decision of the Bombay High Court
The Bombay High Court held that the order passed Appellate authority was correct and the appeal was rightly dismissed.
Title:M/s Renaissance Infrastructure Versus Shri Parth B. Suchak And Another
Case No. SECOND APPEAL (ST.) NO.92626 OF 2020
Date of Order: 09.10.2020
Coram: Hon’ble Justice S.C Gupte
Advocates: Mr. Prasad S. Dan for the Appellants ; Mr. Rubin Vakil for Respondent No.1.