2021 INSC 0711
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S).   6745 ­ 6749   OF 2021
        (Arising out of SLP(Civil) No(s). 3711­3715 OF 2021)
M/s. NEWTECH PROMOTERS AND 
DEVELOPERS PVT. LTD. …..APPELLANT(S)
VERSUS
STATE OF UP & ORS. ETC. …..RESPONDENT(S)
WITH
CIVIL APPEAL NO(S).  6750 OF 2021
(Arising out of SLP(Civil) No(s). 14733 OF 2020)
CIVIL APPEAL NO(S).  6751  OF 2021
(Arising out of SLP(Civil) No(s). 2647 OF 2021)
CIVIL APPEAL NO(S).  6752  OF 2021
(Arising out of SLP(Civil) No(s). 3185 OF 2021)
CIVIL APPEAL NO(S).  6753  OF 2021
(Arising out of SLP(Civil) No(s).  3426 OF 2021)
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CIVIL APPEAL NO(S).  6754  OF 2021
(Arising out of SLP(Civil) No(s). 6199 OF 2021)
CIVIL APPEAL NO(S).  6755  OF 2021
(Arising out of SLP(Civil) No(s). 6671 OF 2021)
CIVIL APPEAL NO(S).  6756  OF 2021
(Arising out of SLP(Civil) No(s). 6711 OF 2021)
CIVIL APPEAL NO(S).  6757  OF 2021
(Arising out of SLP(Civil) No(s). 1670 OF 2021)
J U D G M E N T
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
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the   High   Court   of   Allahabad,   since   the   self­same   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 under the belief that the promotor/real estate developer will
hand   over   possession   of   the   unit   in   terms   of   home   buyer’s
agreement   but   their   bonafide   belief   stood   shaken   when   the
promotors failed to hand over possession of a unit/plot/building in
terms of the agreement and complaints were instituted by the home
buyers for refund of the investment made along with interest under
Section 31 of the Act.
4.   The impugned orders came to be passed by the single member
of   the   authority   on   the   complaint   instituted   at   the   instance   of   the
home buyers/allottees after hearing the parties with the direction to
refund   the   principal   amount   along   with   interest(MCLR   +   1%)   as
prescribed by the State Government under the Act.  In the ordinary
course of business, the order passed by the authority is appealable
under Section 43(5) of the Act provided the statutory compliance of
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pre­deposit   being   made   under   proviso   to   Section   43(5)   before   the
Appellate   Tribunal   but   the   promoter/real   estate   developers
approached   the   High   Court   by   filing   a   writ   petition   under   Articles
226   and   227   of   the   Constitution   questioning   the   order   passed   by
the   authority   holding   it   to   be   without   jurisdiction   as   it   has   been
passed   by   a   single   member   of   the   authority   who   according   to   the
appellants holds no jurisdiction to pass such orders of refund of the
amount as contemplated under Section 18 of the Act and have also
challenged the condition  of pre­deposit  as envisaged under  proviso
to Section 43(5) of the Act for filing of a statutory appeal and raised
certain   ancillary   questions   for   consideration   in   writ   jurisdiction   of
the High Court of Allahabad.  Being aggrieved by the orders passed
by the High Court dismissing their writ petitions, the present batch
of appeals have been preferred at the instance of the promoters/real
estate developers.
5. Before  adverting  to  the  legal  submissions  made before  us,  we
consider it appropriate to take a bird’s­eye view of the scheme of the
Act   2016   which   may   be   apposite   for   proper   appreciation   of   the
submissions made by the parties.
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Object and Reasons of the Act 2016
6. Over the past two decades, with the growth of population and
the   attraction   of   the   people   to   shift   towards   urbanization,   the
demand   for   housing   increased   manifold.     Government   also
introduced   various   housing   schemes   to   cope   with   the   increasing
demand   but   the   experience   shows   that   demands   of   the   housing
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
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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   investments   made   by   the   home   buyers
through legislation to the extent permissible under the law.
9. The   statement   of   object  and   reasons  of   the   Act  indicates   that
the primal position of the regulatory authority is to regulate the real
estate   sector   having   jurisdiction   to   ensure   compliance   with   the
obligation   cast   upon   the   promoters.     The   opening   statement   of
objects   and   reasons   which   has   a   material   bearing   on   the   subject
reads as follows:­
“The   real   estate   sector   plays   a   catalytic   role   in   fulfilling   the   need
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
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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   to   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   interest   of   the   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 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.”
10. It   was   introduced   with   an   object   to   ensure   greater
accountability towards consumers, to significantly reduce frauds &
delays and also the current high transaction costs, and to balance
the   interests   of   consumers   and   promoters   by   imposing   certain
responsibilities   on   both,   and   to   bring   transparency   of   the
contractual   conditions,   set   minimum   standards   of   accountability
and a fast­track dispute resolution mechanism.  It also proposes to
induct   professionalism   and   standardization   in   the   sector,   thus
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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
plot,   apartment   or   building   or   sale   of   real   estate   project   in   an
efficient   and   transparent   manner   and   to   protect   the   interest   of
consumers   in   the   real   estate   sector   and   provide   the   adjudicating
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mechanism for speedy dispute redressal mechanism by establishing
the   regulatory   authority   and   the   adjudicating   officer   and   in
hierarchy,   the   Appellate   Tribunal   for   early   and   prompt   disposal   of
the   complaint   being   instituted   primarily   by   the   home   buyers   for
whom this Act has been enacted by the Parliament in 2016.
13. To   examine   the   matter   in   this   perspective,   consider   what   a
house means in India. The data shows that about more than 77% of
total   assets   of   an   average   Indian   household   are   held   in   real   estate
and it’s the single largest investment of an individual in his lifetime.
The   real   estate   in   India   has   a   peculiar   feature.   The   buyer   borrows
money   to   pay   for   a   house   and   simultaneously   plays   the   role   of   a
financer   as   building   projects   collect   money   upfront   and   this   puts
the   buyer   in   a   very   vulnerable   position­the   weakest   stakeholder
with   a   high   financial   exposure.   The   amendment   to   the   Insolvency
and   Bankruptcy   Code,   2018   recognised   the   home   buyers   as
financial creditors and the present enactment is the most important
regulatory intervention in favour of the home buyers and it’s had an
impact and with passage of time, has become a yardstick of laying
down   minimum   standards   in   the   market.   Earlier,   the   real   estate
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sector   was   completely   unregulated   and   there   was   no   transparency
in their business profile and after the present enactment, it is open
for   the   potential   home   buyers   to   check   if   a   project   is   approved
under   the   Act,   2016   that   at   least   gives   a   satisfaction   to   a   person
who is coming forward in making a lifetime investment.
14. That   apart   from   the   project   being   statutorily   regulated,   it
attaches   certain   authenticity   with   regard   to   completion   of   the
project   and   a   statutory   obligation   upon   the   developer   and   home
buyer   to   abide   by   the   terms   and   conditions   of   the   home   buyers
agreement   and   statutory   compliance   to   the   mandate   of   law.     In
addition, any   project  which  is approved  under  the  Act, 2016  helps
the promoter in raising funds from banks and statistics shows that
buyers   express   their   satisfaction   in   approved   projects   which   is
beneficial   not   only   to   the   home   buyers   but   to   the   promoters   and
real estate agents as well.
15. Chapter   II   of   the   Act   relates   to   the   registration   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
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the   promotor   for   registration   of   real   estate   projects.     In   particular,
the   promotor   is   required   to   state   in   the   application   under   sub­
section   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 co­
terminus  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   11
thereof   elaborates   on   the   functions   and   duties   of   the   promoters.
Under   sub­Section   (4)   of   Section   11,   several   obligations   have   been
casted   upon   the   promoters.     Under   sub­section   (5)   of   Section   11,
the   promoter   may   cancel   the   allotment   if   the   allottee/home   buyer
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commits any breach of the terms of the agreement for  sale, and in
such   case,   the   aggrieved   allottee   has   the   right   to   approach   the
authority.
17. Section 12 provides that if any default being committed by the
promoter,   either   in   reference   to   the   information   contained   in   the
notice,   advertisement   or   prospectus   or   on   the   basis   of   the   model
apartment, plot or building which causes any loss or damage to the
allottee/home buyer by reason of any incorrect or false statement or
wants to withdraw from the project, he shall be compensated by the
promoter in the manner as prescribed under the Act.
18. Section 14 relates to adherence to Sanctioned Plans & Project
specification   by   the   promoters   and   Section   14(3)   empowers   the
allottee   to   receive   compensation   in   the   event   where   there   is   any
structural defect.
19. Section   18(1)   of   the   Act   spells   out   the   consequences   if   the
promoter   fails   to   complete   or   is   unable   to   give   possession   of   an
apartment, plot or building either in terms of the agreement for sale
or   to   complete   the   project   by   the   date   specified   therein   or   on
account of discontinuance of his business as a developer either on
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account   of   suspension   or   revocation   of   the   registration   under   the
Act   or   for   any   other   reason,   the   allottee/home   buyer   holds   an
unqualified right to seek refund of the amount with interest at such
rate as may be prescribed in this behalf.
20. Section 18(2) of the Act mandates that in case, loss is caused
to allottee due to defective title of the land, on which the project is
being   developed   or   has   been   developed,   the   promoter   shall
compensate   the   allottee   and   such   claim   for   compensation   under
Section  18(2)  shall  not   be  barred  by  limitation   provided  under  any
law for the time being in force.
21. Section 18(3) of the Act states that where the promoter fails to
discharge   any   other   obligation   under   the   Act   or   the   rules   or
regulations framed thereunder or in accordance with the terms and
conditions of the agreement for sale, the promoter shall be liable to
pay   ‘such   compensation’   to   the   allottees,   in   the   manner   as
prescribed under the Act.
22. If we take a conjoint reading of sub­sections (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
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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   recognize   right   of   an   allottee   two
distinct   remedies,   viz,   refund   of   the   amount   together   with   interest
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or   interest   for   delayed   handing   over   of   possession   and
compensation.
25. The   unqualified   right   of   the   allottee   to   seek   refund   referred
under Section 18(1)(a) and Section 19(4) of the Act is not dependent
on   any   contingencies   or   stipulations   thereof.     It   appears   that   the
legislature has consciously provided this right of refund on demand
as   an   unconditional   absolute   right   to   the   allottee,   if   the   promoter
fails to give possession of the apartment, plot or building within the
time   stipulated   under   the   terms   of   the   agreement   regardless   of
unforeseen events or stay orders of the Court/Tribunal, which is in
either   way   not   attributable   to   the   allottee/home   buyer,   the
promoter   is   under   an   obligation   to   refund   the   amount   on   demand
with   interest   at   the   rate   prescribed   by   the   State   Government
including compensation in the manner provided under the Act with
the   proviso   that   if   the   allottee  does   not   wish   to   withdraw   from   the
project,   he   shall   be   entitled   for   interest   for   the   period   of   delay   till
handing over possession at the rate prescribed.
26. If   we   turn   to   the   power   of   the   authority,   it   envisages   under
Section 31, the complaints can be filed either with the authority or
15

adjudicating   officer   for   violation   or   contravention   of   the   provisions
of   the   Act   or   the   rules   and   regulations   framed   thereunder.     Such
complaint can be filed against “any promoter, allottee or real estate
agent”,   as   the   case   may   be,   and   can   be   filed   by   “any   aggrieved
person”,   and   it   has   to   be   read   with   an   explanation,   “person”
includes   an   association   of   allottees   or   any   voluntary   consumer
association   registered   under   any   law   for   the   time   being   in   force.
The   form   and   manner   in   which   complaint   is   to   be   instituted   has
been provided under sub­section(2) of Section 31.
27. Section 32 refers to functions of the authority for promotion of
real   estate   sector   and   Sections   34   to   38   of   the   Act   recognize
different nature of powers and functions of the authority regarding
compliance   of   its   regulations   cast   upon   the   promoters,   allottee   or
the real estate agents and to appoint one or more persons to make
an inquiry into the affairs of any promoter, allottee or the real estate
agent   and   to   pass   any   interim   orders,   if   the   promoter,   allottee   or
real estate agent is failing in discharging of its functions under the
Act, rules or  regulations, and to  issue directions from  time to time
to   the   promoter,   allottee   or   real   estate   agents,   if   considered
16

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.     Sub­
section(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, sub­section (2) casts an obligation upon
the   adjudicating   officer   that   while   adjudging   compensation   under
sub­section (1), the application has to be dealt with expeditiously as
possible   and   to   be   disposed   of   within   60   days.     If   there   is   a   delay
being caused exceeding the statutory period of 60 days, in disposal
17

of   the   application,   reasons   are   to   be   recorded   for   extension   of   the
period.
30. Under   sub­section   (3)   of   Section   71,   the   adjudicating   officer
has   been   empowered   not   only   to   summon   and   enforce   the
attendance of persons acquainted with the facts and circumstances
of the case to give evidence or to produce any document which may
be useful and relevant for adjudication, is supposed to take note of
the various parameters as referred to under Section 72 which still is
illustrative   and   not   exhaustive   while   adjudging   the   quantum   of
compensation   payable  to   the   person   aggrieved   and   interest,   as  the
case may be.
31. After we have heard learned counsel for the parties at length,
the following questions emerges for our consideration in the present
batch of appeals are as under:­
1. Whether   the   Act   2016   is   retrospective   or   retroactive   in   its
operation   and   what   will   be   its   legal   consequence   if   tested   on   the
anvil of the Constitution of India?
2. Whether the authority has jurisdiction to direct return/refund
of   the   amount   to   the   allottee   under   Sections   12,   14,   18   and   19   of
18

the   Act   or   the   jurisdiction   exclusively   lies   with   the   adjudicating
officer under Section 71 of the Act?
3. 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?
4. Whether the condition of pre­deposit under proviso to Section
43(5)   of   the   Act   for   entertaining   substantive   right   of   appeal   is
sustainable in law?
5. Whether   the   authority   has   power   to   issue   recovery   certificate
for recovery of the principal amount under Section 40(1) of the Act?
Question   1 :­   Whether   the   Act   2016   is   retrospective   or
retroactive   in   its   operation   and   what   will   be   its   legal
consequence   if   tested   on   the   anvil   of   the   Constitution   of
India?
32. The   issue   concerns   the   retroactive   application   of   the
provisions   of   the   Act   2016   particularly,   with   reference   to   the
ongoing projects.  If we take note of the objects and reasons and the
scheme   of   the   Act,   it   manifests   that   the   Parliament   in   its   wisdom
19

after   holding   extensive   deliberation   on   the   subject   thought   it
necessary to have a central legislation in the paramount interest for
effective   consumer   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   25 th
  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   sub­Section   (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
20

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 projects to which the completion certificate has not
been issued, such promoters shall  be under  obligation  to make an
application   to   the   authority   for   registration   of   the   said   project
within a period of three months from the date of commencement of
the   Act.   With   certain   exemptions   being   granted   to   such   of   the
projects   covered   by   sub­section   (2)   of   Section   3   of   the   Act,   as   a
consequence,   all   such   home   buyers   agreements   which   has   been
executed by the parties inter se has to abide the legislative mandate
in completion of their ongoing running projects.
34. The term “ongoing project” has not been so defined under the
Act   while   the   expression   “real   estate   project”   is   defined   under
Section 2(zn) of the Act which reads as under:­
“2(zn) “real estate project” means the development of a building or
a   building   consisting   of   apartments,   or   converting   an   existing
building   or   a   part   thereof   into   apartments,   or   the   development   of
land into plots or apartments, as the case may be, for the purpose
of selling all or some of the said apartments or plots or building, as
the case may be, and includes the common areas, the development
works, all improvements and structures thereon, and all easement,
rights and appurtenances belonging thereto;”  
         
21

35. The  Act is intended to  comply   even  to  the ongoing   real  estate
project.   The   expression   “ongoing   project”   has   been   defined   under
Rule   2(h)   of   the   Uttar   Pradesh   Real   Estate   (Regulation   and
Development) Rules, 2016 which reads as under:­
“2(h)   “Ongoing   project”   means   a   project   where   development   is
going on and for which completion certificate has not been issued
but excludes such projects which fulfil any of the following criteria
on the date of notification of these rules:
(i) where   services   have   been   handed   over   to   the
Local Authority for maintenance.
(ii) where   common   areas   and   facilities   have   been
handed   over   to   the   Association   for   the   Residents'
Welfare Association for maintenance.
(iii) where   all   development   work   have   been
completed and sale/lease deeds of sixty percent of the
apartment/houses/plots have been executed. 
(iv)     where   all   development   works   have   been
completed   and   application   has   been   filed   with   the
competent   authority   for   issue   of   completion
certificate.”
36. The   expression   “completion   certification”   has   been   defined
under Section 2(q) and “occupancy certificate” under Section 2(zf) of
the Act which 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
22

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   the
stake holders, including allottees/home buyers, promoters and real
estate   agents   while   imposing   certain   duties  and   responsibilities   on
each   of   them   and   to   regulate,   administer   and   supervise   the
unregulated   real   estate   sector   within   the   fold   of   the   real   estate
authority. 
38. The emphasis of Mr. Kapil Sibal, learned senior counsel for the
appellant   is   that   the   agreement   of   sale   was   executed   in   the   year
23

2010­11, i.e.   much before the coming into force of the Act and the
present Act has retrospective application and registration of ongoing
project under the Act would be in contravention to the contractual
rights   established   between   the   promoter   and   allottee   under   the
agreement   for   sale   executed   which   is   impermissible   in   law   and
further submits that Sections 13, 18(1), 19(4) of the Act 2016 to the
extent of their retrospective application is in violation of Articles 14,
19(1)(g) of the Constitution of India.
39. Mr.   Tushar   Mehta,   learned   Solicitor   General,   on   the   other
hand,   submits   that   a   bare   perusal   of   the   object   and   reasons
manifest   that   the   Act   does   not   take   away   the   substantive
jurisdiction,   rather   it   protects   the   interest   of   homebuyers   where
project/possession is delayed and further submits that the scheme
of   the   Act   has   retroactive   application,   which   is   permissible   under
the   law.     The   provisions   make   it   clear   that   it   operates   in   future,
however,   its   operation   is   based   upon   the   character   and   status
which   have   been   done   earlier   and   the   presumption   against
retrospectivity   in   this   case   is   ex­facie   rebuttable.     The   literal
interpretation   of   the   statute   manifest   that   it   has   not   made   any
24

distinction between the “existing” real estate projects and “new” real
estate projects as has been defined under Section 2(zn) of the Act.
40. Learned   counsel   further   submits   that   the   key   word,   i.e.,
“ongoing   on   the   date   of   the   commencement   of   this   Act”   by
necessary   implication,   ex­facie   and   without   any   ambiguity,   means
and includes those projects which were ongoing and in cases where
only   issuance   of   completion   certificate   remained   pending,
legislature   intended   that   even   those   projects   have   to   be   registered
under   the   Act.     Therefore,   the   ambit   of   Act   is   to   bring   all   projects
under   its   fold,   provided   that   completion   certificate   has   not   been
issued.     The   case   of   the   appellant   is   based   on   “occupancy
certificate”   and   not   of   “completion   certificate”.     In   this   context,
learned 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.
25

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 on­going  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. 
42. What the provision further emphasizes is that a promoter of a
project   which   is   not   complete/sans   completion   certificate   shall   get
the   project   registered   under   the   Act   but   while   getting   the   project
registered,   promoter   is   under   an   obligation   to   prescribe   fresh
26

timelines   for   getting   the   remaining   development   work   completed
and from the scheme of the Act, we do not find that the first proviso
to   Section   3(1)   in  any  manner   is   either   violative   of   Articles   14  and
19(1)(g)   of   the   Constitution   of   India.   The   Parliament   is   always
competent   to   enact   any   law   affecting   the   antecedent   events   under
its fold within the parameters of law. 
43. In   State   of   Bombay   (Now   Maharashtra)   versus   Vishnu
Ramchandra 1
, this Court observed that if the part of requisites for
operation   of   the   statute   were   drawn   from   a   time   antecedent   to   its
passing,   it   did   not   make   the   statute   retrospective   so   long   as   the
action was taken after the Act came into force.
44. To   meet   out   different   nature   of   exigencies,   it   was   noticed   by
the Parliament that Pan India, large number  of real estate projects
where   the   allottees   did   not   get   possession   for   years   together   and
complaints   being   filed   before   different   forums   including   under   the
Consumer Protection Act has failed to deliver adequate/satisfactory
results to the consumer/allottees and their life savings is locked in
and   sizable   sections   of   allottees   had   invested   their   hard­earned
1   AIR 1961 SC 307
27

money, money obtained through loans or financial institutions with
the   belief   that   they   will   be   able   to   get   a   roof   in   the   form   of   their
apartments/flats/unit.   
45. At  the  given  time, there  was  no   law  regulating  the   real  estate
sector,   development   works/obligations   of   promoter   and   allottee,   it
was badly felt that such of the ongoing projects to which completion
certificate   has   not   been   issued   must   be   brought   within   the   fold   of
the   Act   2016   in   securing   the   interests   of   allottees,   promoters,   real
estate   agents   in   its   best   possible   way   obviously,   within   the
parameters   of   law.     Merely   because   enactment   as   prayed   is   made
retroactive in its operation, it cannot be said to be either violative of
Articles 14 or 19(1)(g) of the Constitution of India.  To the contrary,
the   Parliament   indeed   has   the   power   to   legislate   even
retrospectively   to   take   into   its   fold   the   pre­existing   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
28

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 2
, which reads as under:­
“8.   “Retrospective”   means   looking   backward,   contemplating   what
is   past,  having   reference  to  a  statute  or   things  existing   before  the
statute   in   question.   Retrospective   law   means   a   law   which   looks
backward   or   contemplates   the   past;   one,   which   is   made   to   affect
acts   or   facts   occurring,   or   rights   occurring,   before   it   comes   into
force.   Retroactive   statute   means   a   statute,   which   creates   a   new
obligation on transactions or considerations or destroys or impairs
vested rights.”
2   2007(12) SCC 198
29

49. Further,   this   Court   in   Shanti   Conductors   Private   Limited
and   Another   Vs.   Assam   State   Electricity   Board   and   Others 3
,
held as under:­
“ 67.   Retroactivity   in   the   context   of   the   statute   consists   of
application   of   new   rule   of   law   to   an   act   or   transaction   which   has
been completed before the rule was promulgated.
68.   In the present case, the liability of buyer to make payment and
day   from   which   payment   and   interest   become   payable   under
Sections   3   and   4   does   not   relate   to   any   event   which   took   place
prior to the 1993 Act, it is not even necessary for us to say that the
1993   Act   is   retroactive   in   operation.   The   1993   Act   is   clearly
prospective   in   operation   and   it   is   not   necessary   to   term   it   as
retroactive in operation. We, thus, do not subscribe to the opinion
dated   31­8­2016   [ Shanti   Conductors   (P)   Ltd.   v.   Assam   SEB ,   (2016)
15 SCC 13] of one of the Hon'ble Judges holding that the 1993 Act
is retroactive.”
50. In   the   recent   judgment   of   this   Court   rendered   in   the   case   of
Vineeta   Sharma   Vs.   Rakesh   Sharma   and   Others 4
  wherein,   this
Court   has   interpreted   the   scope   of   Section   6(1)   of   the   Hindu
Succession Act, 1956, the law of retroactive statute held as under:­
“ 61.   The   prospective   statute   operates   from   the   date   of   its
enactment   conferring   new   rights.   The   retrospective   statute
operates   backwards   and   takes   away   or   impairs   vested   rights
acquired under  existing  laws.  A retroactive statute is the  one that
does not operate retrospectively. It operates in futuro. However, its
operation is based upon the character or status that arose earlier.
Characteristic   or   event   which   happened   in   the   past   or   requisites
3   2019(19) SCC 529
4   2020(9) SCC 1
30

which   had   been   drawn   from   antecedent   events.   Under   the
amended   Section   6,   since   the   right   is   given   by   birth,   that   is,   an
antecedent   event,   and   the   provisions   operate   concerning   claiming
rights on and from the date of the Amendment Act.”  
51. Thus,   it   is   clear   that   the   statute   is   not   retrospective   merely
because it affects existing rights or its retrospection because a part
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
31

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
parties,   promoters/home   buyers   or   allottees,   cannot   shirk   from
their   responsibilities/liabilities   under   the   Act   and   implies   their
challenge to the violation of the provisions of the Act and it negates
the   contention   advanced   by   the   appellants   regarding   contractual
terms having an overriding effect to the retrospective applicability of
the   Authority   under   the   provisions   of   the   Act   which   is   completely
misplaced and deserves rejection.
54.   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 fold and therefore, vested or accrued   rights, if any,
in   no   manner   are   affected.   At   the   same   time,   it   will   apply   after
getting   the   on­going   projects   and   future   projects   registered   under
Section 3 to prospectively follow the mandate of the Act 2016. 
32

Question no. 2: Whether   the   authority   has   jurisdiction   to
direct   return/refund   of   the   amount   to   the   allottee   under
Sections   12,   14,   18   and   19   of   the   Act   or   the   jurisdiction
exclusively lies with the adjudicating officer under Section 71
of the Act?
55. Before examining the question, we have to take a holistic view
of the scheme of the Act along with the rules/regulations framed by
the Authority in exercise of its powers under Sections 84 and 85 of
the Act that postulates certain functions and duties to the promoter
of   the   real   estate   project   and   its   entailing   consequences   if   the
promoter   fails   to   fulfil   his   obligations   defined   under   Chapter   III.
Some of the obligations are spelt out in Sections 12, 14, 18 and 19
of the Act.
56. Section   12   which   falls   for   consideration   in   these   petitions
reads as follows:
“12. Where any person makes an advance or a deposit on the basis
of   the   information   contained   in   the   notice   advertisement   or
prospectus,   or   on   the   basis   of   any   model   apartment,   plot   or
building, at the case may be, and sustains any loss or damage by
reason of any incorrect, false statement included therein, he shall
33

be   compensated   by   the   promoter   in   the   manner   as   provided
under this Act:”
Provided   that   if   the   person   affected   by   such   incorrect,   false
statement contained in the notice, advertisement or prospectus, or
the model apartment, plot or building, as the case may be, intends
to   withdraw   from   the   proposed   project,   he   shall   be   returned   his
entire   investment   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
34

‘compensation’   are   distinctly   delineated.   Section   18   reads   as
follows:
18.(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   be,   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. 
(2)   The   promoter   shall   compensate   the   allottees   in   case   of   any
loss caused to him due to defective title of the land, on which the
project is being developed or has been developed, in the manner as
provided   under   this   Act,   and   the   claim   for   compensation   under
this   subsection   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.
      (emphasis supplied)
35

59. Chapter IV deals with the rights and duties of the allottees and
in   particular,   Section   19(4)   entitles   the   allottees   to   a   refund   of   the
amount paid.  Section 19(4) reads as follows:­
“(4)   The   allottee   shall   be   entitled   to   claim   the   refund   of   amount
paid   along   with   interest   at   such   rate   as   may   be   prescribed   and
compensation   in   the   manner   as   provided   under   this   Act   from
the   promoter,   if   the   promoter   fails   to   comply   or   is   unable   to   give
possession of the apartment, plot or building, as the case may be,
in   accordance   with   the   terms   of   agreement   for   sale   or   due   to
discontinuance   of   his   business   as   a   developer   on   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 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   sub­section   “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.
36

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   appoint,   in
consultation   with   the   appropriate   Government,   one   or   more
judicial   officer   as   deemed   necessary,   who   is   or   has   been   a
District   Judge   to   be   an   adjudicating   officer   for   holding   an
inquiry   in   the   prescribed   manner,   after   giving   any   person
concerned a reasonable opportunity of being heard: 
Provided   that   any   person   whose   complaint   in   respect   of   matters
covered under sections 12, 14, 18 and section 19 is pending before
the   Consumer   Disputes   Redressal   Forum   or   the   Consumer
Disputes   Redressal   Commission   or   the   National   Consumer
Redressal   Commission,   established   under   Section   9   of   the
Consumer   Protection   Act,   1986   (68   of   1986),   on   or   before   the
commencement   of   this   Act,   he   may,   with   the   permission   of   such
Forum   or   Commission,   as   the   case   may   be,   withdraw   the
complaint   pending   before   it   and   file   an   application   before   the
adjudicating officer under this Act. 
(2)   The   application   for   adjudging   compensation   under   sub­
section   (1),   shall   be   dealt   with   by   the   adjudicating   officer   as
expeditiously   as   possible   and   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   adjudicating   officer   shall   record
his   reasons   in   writing   for   not   disposing   of   the   application   within
that period. 
(3)   While   holding   an   inquiry   the   adjudicating   officer   shall   have
power   to   summon   and   enforce   the   attendance   of   any   person
acquainted   with   the   facts   and   circumstances   of   the   case   to   give
evidence   or   to  produce   any   document   which   in   the   opinion   of   the
adjudicating   officer,   may   be   useful   for   or   relevant   to   the   subject
37

matter   of   the   inquiry   and   if,   on   such   inquiry,   he   is   satisfied   that
the   person   has   failed   to   comply   with   the   provisions   of   any   of   the
sections   specified   in   sub­section   (1),   he   may   direct   to   pay   such
compensation or interest , as the case any be, as he thinks fit in
accordance with the provisions of any of those sections.
62. The   broad   factors   to   be   considered   while   adjudging
compensation have been provided under Section 72 which reads as
under:­
“72.   While   adjudging   the   quantum   of   compensation   or
interest,   as   the   case   may   be,   under   section   71,   the
adjudicating   officer   shall   have   due   regard   to   the   following
factors, namely:— 
(a)   the   amount   of   disproportionate   gain   or   unfair
advantage,   wherever   quantifiable,   made   as   a   result   of
the default; 
(b)   the   amount   of   loss   caused   as   a   result   of   the
default; 
(c) the repetitive nature of the default; 
(d)   such   other   factors   which   the   adjudicating   officer
considers   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   27 th
  February,   2019   called   as   Uttar   Pradesh   Real
Estate   Regulatory   Authority(General)   Regulations,   2019(hereinafter
being referred to as “Regulations 2019”).  
38

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,   will
appoint   Adjudicating   Officers   on   the   Panel   of   U.P.   RERA   for   the
purposes   of   adjudicating   the   matters   of   compensation   admissible
under the Act.
(c)   The aggrieved persons will be required to file complaints before
the Authority online in form – M. The Claims of compensation will
also be included in form – M itself. While the Authority will decide
all  the  questions of  breaches of  the  Act,  Rules and  Regulations, it
will refer the question relating to the adjudication of compensation
to one of the Adjudicating Officers on the Panel of U.P. RERA who
will then decide the matter expeditiously and preferably within 60
days.
(d)   The   Adjudicating   Officers   on   the   Panel   of   U.P.   RERA   will   hold
their courts at Lucknow or Gautam Buddhnagar as decided by the
chairman.   The   complaints   relating   to   the   districts   of   NCR   will   be
heard   at   Gautam   Buddhnagar   whereas   complaints   from   the
remaining districts of the State will be heard at Lucknow.
65. The complaint before the regulatory authority for any violation
of the Act or rules or regulations made thereunder by an aggrieved
person   has   to   be   submitted   in   Form   (M)   as   per   the   procedure
prescribed   under   Rule   33(1)   which   the   regulatory   authority   has   to
39

follow.     At   the   same   time,   any   person   who   is   aggrieved   to   claim
compensation under Sections 12, 14, 18 and 19 has to submit his
compliant   in   Form   (N)   for   adjudging   compensation   as   per   the
procedure   provided   under   Section   71(3)   of   the   Act   taking   into
consideration   the   factors   indicated   under   Section   72   and   in   the
manner provided under Rule 34(1) of the Rules 2016.
66. Rules   33(1)   and   34(1)   of   the   Uttar   Pradesh   Real
Estate(Regulation and Development) Rules, 2016 which is relatable
to the adjudicatory powers of the regulatory authority/adjudicating
officer reads as follows:­
“   33(1)      Any   aggrieved   person   may   file   a   complaint   with   the
regulatory   authority   for   any   violation   under   the   Act   or   the   rules
and   regulations   made   thereunder,   save   as   those   provided   to   be
adjudicated by the adjudicating officer, in Form ‘M’ 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 seat of the said regulatory authority is situated.
Explanation:­   For   the   purpose   of   this   sub­rule   "person"   shall
include   the   association   of   allottees   or   any   voluntary   consumer
association registered under any law or the time being in force.
34(1)      Any   aggrieved   person   may   file   a   complaint   with   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)
40

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   statute
itself.
69. The adjudicating officer under Section 71 is specifically vested
with   the   jurisdiction   to   adjudicate   complaints   under   Sections
12,14,18   &   19   of   the   Act   2016.     In   disposing   of   such   complaints,
the   adjudicating   officer   alone  is   empowered   under  Section  71(3)   to
41

conduct   enquiry   and   direct   the   payment   of   refund   as   well   as
compensation   and   interest,   as   the   case   may   be,   in   taking   note   of
the   broad   parameters   enumerated   in   Section   72   and   such
complaints   are   to   be   statutorily   disposed   of   within   60   days   failing
which the reasons are to be recorded.
70. According to the learned counsel for the appellants, proviso to
Section   71(1),   the   jurisdiction   to   adjudicate   complaints   under
Sections   12,   14,   18   and   19   which   were   earlier   pending   before   the
authority   established   under   the   Consumer   Protection   Act,   1986
stands vested with the adjudicating officer.     According to him, the
legislative   intent   is   clear   and   unambiguous   that   the   complaints
emanating   from   the   bundle   of   rights   which   flow   from   Sections   12,
14, 18 and 19 including the cause of action for refund and interest
be   withdrawn   from   the   forums   established   under   the   Consumer
Protection   Act   and   in   turn   be   filed   before   and   adjudicated   by   the
Adjudicating   Officer   under   this   Act   and   that   being   the   legislative
intent, matters arising under Sections 12, 14, 18 and 19 would be
examined and adjudicated exclusively by the adjudicating officer as
mandated by law.
42

71. Per contra, Ms. Madhavi Divan, learned senior counsel for the
respondents   while   supporting   the   findings   recorded   by   the   High
Court   in   the   impugned   judgment   submits   that   the   Act   provides
distinct   remedies,   i.e.,   ‘return   of   amount/investment’   on   the   one
hand and ‘compensation’ on the other, to be determined separately.
According to her, the right to refund on demand is a statutory right,
fundamentally,   contextually   and   conceptually   distinct   from   the
right to receive compensation.   While the right to refund emanates
from   the   Legislature’s   recognition   of   the   fact   that   homebuyers   are
“ out of pocket ” financial creditors, the right to compensation seeks
to make amends for injury or loss.
72. Thus,  refund  and  compensation   are  two   distinct   rights  under
the Act and cannot be conflated.  The manner in which the two are
to   be   determined   would   require   a   different   process   and   involve
different   considerations.     According   to   her,   the   determination   of
compensation   involves   a   full­fledged   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   allottees­homebuyers.     The
43

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 that has received unjust enrichment or unjust benefit.
74. Learned counsel further submits that in order to give full effect
to the letter and spirit of the right to refund in the context explained
above, there can be no doubt that the determination of the right to
44

refund   must   be   left   to   the   authority   whereas   the   adjudication   for
adjudging   compensation   with   the   adjudicating   officer   as   reflected
under Section 71 of the Act.   According to the learned counsel, the
authority is fully  seized with the standard agreements entered into
between   the   promoters   and   the   allottees,   and   therefore,   is   best
equipped to determine the extent of delay, if any.  Therefore, refund
claims   can   most   conveniently   and   effectively   be   dealt   with   by   the
authority and interest on refund is available at the rate prescribed
by   the   appropriate   Government.     In   the   instant   batch   of   matters,
the   prescribed   rate   of   interest   is   (MCLR   +   1%),   which   has   been
notified by the Government of Uttar Pradesh.
75. The   legislature   in   its   wisdom   has   made   a   specific   provision
delineating   power   to   be   exercised   by   the   regulatory
authority/adjudicating   officer.     “Refund   of   the   amount”   and
“compensation”   are   two   distinct   components   which   the   allottee   or
the   person   aggrieved   is   entitled   to   claim   if   the   promoter   has   not
been   able   to   hand   over   possession   with   a   nature   of   enquiry   and
mechanism   provided   under   the   Act.     So   far   as   the   claim   with
respect   to   refund   of   amount   on   demand   under   Sections   18(1)   and
45

19(4) of the Act is concerned, it vests within the jurisdiction of the
regulatory   authority.     Section   71   carves   out   the   jurisdiction   of   the
adjudicating officer to adjudge compensation under Sections 12, 14,
18   and   19   after   holding   enquiry   under   Section   71(3)   of   the   Act
keeping in view the broad contours referred to under Section 72 of
the Act.
76. The   submission   made   by   learned   counsel   for   the   appellants
that   the   proviso   under   Section   71(1)   empowers   the   adjudicating
officer   to   examine   the   complaints   made   under   Sections   12,   14,   18
and   19   pending   before   the   Consumer   Disputes   Redressal
Forum/Commission   is   in   different   context   and   it   was   one   time
mechanism to provide a window to the consumers whose composite
claims   are   pending   before   the   Consumer   Forum/Commission   to
avail   the   benevolent   provision   of   the   Act   2016   for   the   reason   that
under   the   Consumer   Protection   Act,   there   is   no   distinction   as   to
whether   the   complaint   is   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
46

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   date   specified   and   the
justification  which   the  promotor  wants  to  tender  as  his  defence  as
to  why   the withdrawal of  the  amount  under  the  scheme  of the  Act
may  not  be  justified  appears to   be  insignificant   and  the  regulatory
47

authority with summary nature of scrutiny of undisputed facts may
determine   the   refund   of   the   amount   which   the   allottee   has
deposited, while seeking withdrawal from the project, with interest,
that too has been prescribed under the Act, as in the instant case,
the   State   of   Uttar   Pradesh   has   prescribed   MCLR   +   1%   leaving   no
discretion to the authority and can also claim compensation as per
the procedure prescribed under Section 71(3) read with Section 72
of the Act.
78. This Court while interpreting Section 18 of the Act, in  Imperia
Structures Ltd.  Vs.  Anil Patni and Another    5
 held that Section 18
confers   an   unqualified   right   upon   an   allottee   to   get   refund   of   the
amount deposited with the promoter and interest at the prescribed
rate, if the promoter fails to complete or is unable to give possession
of   an   apartment   as   per   the   date   specified   in   the   home   buyer’s
agreement in para 25 held as under:­
“ 25.   In terms of Section 18 of the RERA Act, if a promoter fails to
complete   or   is   unable   to   give   possession   of   an   apartment   duly
completed   by   the   date   specified   in   the   agreement,   the   promoter
would be liable, on demand, to return the amount received by him
in respect of that apartment if the allottee wishes to withdraw from
the   Project.   Such   right   of   an   allottee   is   specifically   made   “without
prejudice   to   any   other   remedy   available   to   him”.   The   right   so
5   2020(10) SCC 783
48

given   to   the   allottee   is   unqualified   and   if   availed,   the   money
deposited  by   the   allottee  has  to  be   refunded  with  interest   at  such
rate   as   may   be   prescribed.   The   proviso   to   Section   18(1)
contemplates   a   situation   where   the   allottee   does   not   intend   to
withdraw from  the Project. In that case he is entitled to and must
be paid interest for every month of delay till the handing over of the
possession. It is up to the allottee to proceed either under Section
18(1) or under proviso to Section 18(1). The case of Himanshu Giri
came   under   the   latter   category.   The   RERA   Act   thus   definitely
provides a remedy to an allottee who wishes to withdraw from the
Project or claim return on his investment.”
 
     (emphasis supplied)
79. To  safeguard the  interests of the parties, on being  decided by
the regulatory authority/adjudicating officer, it is always subject to
appeal   before   the   Tribunal   under   Section   43(5)   provided   condition
of   pre­deposit   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
49

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   sub­section   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 functions of the adjudicating officer are only for
“adjudging compensation” under Sections 12, 14, 18 and 19 of the
Act. If the legislative intent was to expand the scope of the powers of
the adjudicating officer, then the wording of Section 71(1) ought to
have   been   different.     On   the   contrary,   even   the   opening   words   of
Section 71(2) of the Act make it clear that an application before the
adjudicating   officer   is   only   for   “adjudging   compensation”.     Even   in
Section 71(3) of the Act, it is reiterated that the adjudicating officer
may direct “to pay such compensation or interest” as the case may
be   as   he   thinks   fit,   in   accordance   with   provisions   of   Sections   12,
50

14,   18   and   19   of   the   Act.     This   has   to   be   seen   together   with   the
opening   words   of   Section   72   of   the   Act,   which   reads   “while
adjudging   the   quantum   of   compensation   or   interest,   as   the   case
may   be,   under   Section   71,   the   adjudicating   officer   shall   have   due
regards”   to   the   broad   parameters   to   be   kept   in   mind   while
adjudging   compensation   to   be   determined   under   Section   71   of   the
Act.
82. The   further   submission   made   by   the   learned   counsel   for   the
appellants   that   if   the   authority   and   the   adjudicating   officer   either
come to different  conclusions  on the same questions or  in a single
complaint, the person aggrieved is seeking manifold reliefs with one
of   the   relief   of   compensation   and   payment   of   interest,   with   the
timelines   being   provided   for   the   adjudicating   officer   to   decide   the
complaint   under   Section   71   of   the   Act.     At   least,   there   is   no
provision   which   could   be   referred   to   expedite   the   matter   if   filed
before the regulatory authority.   The submission may not hold good
for the reason that there is a complete delineation of the jurisdiction
vested with the regulatory authority and the adjudicating officer.  If
there is any breach or violation of the provisions of Sections 12, 14,
51

18   and   19   of   the   Act   by   the   promoter,   such   a   complaint
straightaway   has  to   be  filed  before   the   regulatory   authority.     What
is   being   referable   to   the   adjudicating   officer   is   for   adjudging
compensation,   as   reflected   under   Section   71   of   the   Act   and
accordingly   rules   and   regulations   have   been   framed   by   the
authority   for   streamlining   the   complaints   which   are   made   by   the
aggrieved person either  on  account of  violation  of the provisions of
Sections   12,   14,   18   and   19   or   for   adjudging   compensation   and
there appears no question of any inconsistency  being made, 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
52

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
sub­section (2) of Section 71 is concerned, it pre­supposes 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 restrain the mandate of 60 days as referred to under Section
71(3) of the Act.
85. The provisions of which a detailed reference has been made, if
we go with the literal rule of interpretation that when the words of
the statute are clear, plain and unambiguous, the Courts are bound
to   give   effect   to   that   meaning   regardless   of   its   consequence.     It
leaves   no   manner   of   doubt   and   it   is   always   advisable   to   interpret
the legislative wisdom in the literary sense as being intended by the
legislature   and   the   Courts   are   not   supposed   to   embark   upon   an
53

inquiry   and   find   out   a   solution   in   substituting   the   legislative
wisdom which is always to be avoided.
86. From  the scheme of the Act of which a detailed reference has
been made and taking note of power of adjudication delineated with
the  regulatory  authority  and adjudicating   officer, what finally   culls
out   is   that   although  the   Act   indicates   the   distinct   expressions   like
‘refund’,   ‘interest’,   ‘penalty’   and   ‘compensation’,   a   conjoint   reading
of   Sections   18   and   19   clearly   manifests   that   when   it   comes   to
refund   of   the   amount,   and   interest   on   the   refund   amount,   or
directing   payment   of   interest   for   delayed   delivery   of   possession,   or
penalty   and   interest   thereon,   it   is   the   regulatory   authority   which
has   the   power   to   examine   and   determine   the   outcome   of   a
complaint.     At   the   same   time,   when   it   comes   to   a   question   of
seeking   the   relief   of   adjudging   compensation   and   interest   thereon
under   Sections   12,   14,   18   and   19,   the   adjudicating   officer
exclusively   has   the   power   to   determine,   keeping   in   view   the
collective reading  of Section 71 read with  Section  72 of the Act.   If
the   adjudication   under   Sections   12,   14,   18   and   19   other   than
compensation   as   envisaged,   if   extended   to   the   adjudicating   officer
54

as   prayed   that,   in   our   view,   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.
Question   no.   3:   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?
87. It is the specific stand of the respondent Authority of the State
of  Uttar  Pradesh   that   the   power  has   been  delegated  under   Section
81   to   the   single   member   of   the   authority   only   for   hearing
complaints under Section 31 of the Act.   To meet out the exigency,
the   authority   in   its   meeting   held   on   14 th
  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
5 th
  December,   2018   empowered   the   single   member   to   hear   the
55

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 the scheme of the Act.
89. Learned counsel further submits that the order passed by the
single member of the authority is without jurisdiction and it suffers
from coram non­judice.   Section 21 of the Act clearly provides that
the   authority  shall  consist   of  a  Chairperson  and  not  less  than   two
whole   time   members   to   be   appointed   by   the   Government.
56

Regulation 24(a) of the Regulations 2019 framed by the authority is
in   clear   contravention   to   the   parent   statute   that   the   delegation   of
power  can be of class, category  of cases, specific to  the member  of
the   authority   but   a   general   delegation   of   power   to   the   single
member   of   the   authority   in   exercise   of   power   under   Section   81   is
not contemplated under the Act and delegation to a single member
of the authority in adjudicating the disputes under Sections 12, 14,
18  and   19  is  without   jurisdiction   and  that   is   the   reason   for   which
the   appellants   have   approached   the   High   Court   by   filing   a   writ
petition under Article 226 of the Constitution and in furtherance to
this Court.
90. Learned counsel further submits that from the plain reading of
the statute itself, the role of the authority is of a quasi­judicial body
forms   its   underpinning.     The   adjudicatory   role   of   the   authority   is
specifically recognized under Sections 5, 6, 7(2), 9(3) and 31 where
the authority is supposed to hear the other side, after compliance of
the   principles   of   natural   justice,   is   supposed   to   pass   an   order   in
accordance with law.
57

91. Section 31 allows the aggrieved person to file a complaint with
the authority  or  the adjudicating  officer  for  any  violation or  breach
or   contravention   to   the   provisions   of   the   Act   or   the   rules   and
regulations made thereunder  and this being  a quasi­judicial power
to   be  exercised   by   the   authority   could   not   be  delegated  to   a   single
member   of   the   authority   under   the   guise   of   Section   81   of   the   Act,
that apart, there are certain provisions where authority alone holds
power to initiate action or make inquiries like Sections 35(1), 35(2),
36 or 38, the powers are exclusively exercised by the authority and
the tests for determining whether an action is quasi­judicial or not
are   laid   down   in   Province   of   Bombay   Vs.   Kushaldas   S   Advani
and   Others 6
  which   has   been   consistently   followed   by   the
Constitution Bench in its decision in   Shivji Nathubhai Vs. Union
of   India   and   Others 7
;   Harinagar   Sugar   Mills   Limited   Vs.
Shyam Sunder Jhunjhunwala and Others 8
.
92. Learned   counsel   further   submits   that   according   to   him,   the
powers which have been exercised by the authority under Sections
6   1950 SCR 621
7   1960(2) SCR 775
8   1962(2) SCR 339
58

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 9
 and
Vine   Vs.   National   Dock   Labour   Board 10
  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   quasi­judicial   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 11
;   Sahni   Silk   Mills(P)   Ltd.   and
Another   Vs.   Employees   State   Insurance   Corporation 12
;
Jagannath Temple Managing Committee Vs. Siddha Math and
Others 13
.
9   1953(2) QB 18
10   1956(1) QB 658
11   1965(2) SCR 929
12   1994(5) SCC 346
13   2015(16) SCC 542
59

93. Learned counsel submits that it has been consistently held by
this   Court   that   the   power   being   quasi­judicial   in   nature,   the
presumption   is   that   it   ought   to   be   exercised   by   the   authority
competent   and   no   other,   unless   the   law   expressly   or   by   clear
implication permits it.  
94. Learned   counsel   further   submits   that   even   by   necessary
implication, the judicial power of the authority cannot be delegated
by the multi­member authority to any of its members.  If at all there
are   practical   considerations   of   workload,   the   Government   can
always   establish   more   than   one   authority   in   terms   of   the   second
proviso to Section 20(1).
95. Per contra, Mr. Devadatt Kamat, learned senior counsel for the
respondents submits that the complaint of the appellants has been
primarily   on   the   issue   that   a   single   member   is   not   competent   to
exercise power to hear complaints under Section 31 of the Act and
the   delegation   of   its   power   by   the   authority   invoking   Section   81   is
beyond jurisdiction.
96. Learned   counsel   submits   that   as   a   matter   of   fact   the   entire
functioning   of   the   authority   has   not   been   delegated   to   the   single
60

member.  It is only the hearing of complaints under Section 31 that
the   single   member   of   the   authority   has   been   empowered   to   deal
with   such   complaints,   keeping   in   view   the   overall   object   of   speedy
disposal of such complaints mandated under the law.  According to
him,   it   is   factually   incorrect   to   say   that   the   other   functions   of   the
authority like imposition of penalty under Section 38, revocation of
registration   under   Section   7   or   functions   of   the   authority   under
Sections   32   or   33   have   been   delegated   to   a   single   member   of   the
authority.
97. Learned   counsel   further   submits   that   the   question   is   not
whether   the   delegation   per   se   to   a   single   member   is   bad,   but   the
question   is   whether   the   power   to   hear   complaints   in   reference   to
Sections   12,14,18   and   19   delegated   to   a   single   member   is
permissible under the law.  It may be noticed that the authority has
been vested with several other powers and functions under the Act,
which   the   authority   has   consciously   not   delegated   to   a   single
member.
98. Learned   counsel   further   submits   that   pursuant   to   the
delegation of power under Section 81 by the special order dated 5 th
61

December,   2018   read   with   Regulation   24,   a   single   member   has
been   authorized   by   the   authority   to   hear   the   matters   related   to
refund of the amount under Section 31 of the Act.
99. Learned counsel further submits that almost in a pari materia
scheme,   Section   29­A   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   14
.   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 15
  Heinz   India   Private   Limited   and
Another   Vs.   State   of   Uttar   Pradesh 16
;   and   taking   assistance
14   2012(13) SCC 501
15   1978(2) SCC 102
16   2012(5) SCC 443
62

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   under   Section   81   has   not   been   questioned   in
either of the pending appeals before the Court. 
100. Learned   counsel   further   submits   that   Section   21   of   the   Act
relates   to   the   composition   of   the   authority   and   does   not   deal   with
minimum   bench   strength.     At   the   given   time,   the   legislature   has
consciously   avoided   prescribing   any   minimum   bench/quorum
strength to hear complaints by the authority.  At the same time, the
Act only prescribes a bench/quorum only of the Appellate Tribunal
under   Section   43(3)   of   the   Act   and   further   submits   that   in   the
absence   of   the   minimum   bench/quorum   strength   being   fixed   by
statute, it is impermissible to treat the composition of the authority
itself as a minimum bench strength. 
101. Learned counsel further submits that Sections 29 and 81 are
not   in   derogation   to   each   other   and   operate   in   different   fields.
Section 29 is concerned with the meetings of the authority and does
63

not   envisage   in   its   fold   the   quasi­judicial   functions   which   the   Act
casts   upon   the   authority.     The   term   “meetings”   under   Section   29
does   not   deal   with   the   performance   of   quasi­judicial   functions
which   are   referred   to   the   authority   under   Section   31.     It   can   only
refer   to   meetings   on   policy/regulatory   issues   and   invited   attention
to   Sections   32   and   33   of   the   Act   which   are   in   the   nature   of
policy/regulatory   decisions   the   authority   is   mandated   under   the
Act.  It can be further noticed from Section 29(3) and (4) which talks
about ‘questions’ before the authority, to be disposed off within 60
days   of   receiving   the   ‘application’   and   there   is   no   reference   to   any
‘complaints’ as indicated in Section 31 of the Act.
102. To   examine   the   scheme   of   the   Act   it   may   be   relevant   to   take
note of certain provisions add infra:­
“ 21.  The Authority shall consist of a Chairperson and not less than
two   whole   time   Members   to   be   appointed   by   the   appropriate
Government.
29.   (1)   The   Authority   shall   meet   at   such   places   and   times,   and
shall follow such rules of procedure in regard to the transaction of
business at its meetings, (including quorum at such meetings), as
may be specified by the regulations made by the Authority. 
(2) If the Chairperson for any reason, is unable to attend a meeting
of   the   Authority,   any   other   Member   chosen   by   the   Members
present   amongst   themselves   at   the   meeting,   shall   preside   at   the
meeting. 
64

(3)   All   questions   which   come   up   before   any   meeting   of   the
Authority   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   be
dealt   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   sub­section   "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   sub­section
(1) shall be such as may be specified.
81.   The   Authority   may,   by   general   or   special   order   in   writing,
delegate   to   any   member,   officer   of   the   Authority   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   power   to   make   regulations   under   section   85),   as  it   may   deem
necessary.
103. Section   21   of   the   Act   relates   to   the   composition   of   the
authority   which   consists   of   a   Chairperson   and   not   less   than   two
whole   time   members   to   be   appointed   by   the   appropriate
Government   but   conspicuously   it   does   not   mention   minimum
65

bench   strength   at   the   same   time   consciously   prescribes   minimum
bench/quorum   while   constituting   the   Real   Estate   Appellate
Tribunal as reflected under Section 43(3) of the Act. 
104. The   emphasis   of   the   appellants   was   on   Section   29   of   the   Act
which indicates the quorum of meetings of the authority.  There is a
specific provision that there shall be a meeting of the authority with
the   minimum   quorum   being   prescribed,   such   business   of   the
meeting   of   the   authority   indeed   could   not   be   delegated   to   a   single
member   of   the   authority   in   exercise   of   power   under   Section   81   of
the Act.
105. The   term   meeting   under   Section   29   of   the   Act   does   not   deal
with   the   performance   of   the   authority   in   quasi­judicial   matters
which are referred to under Section 31 of the Act.   It only refers to
meetings,   policy/regulatory   issues   that   the   authority   is   mandated
to discharge under the Act.  It may be noticed that Sections 32 and
33   are   in   the   nature   of   policy/regulatory   directions   which   the
authority   is   mandated   to   be   discharged   indisputably   have   to   be
undertaken   by   the   authority   while   functioning   as   a   whole   body
under Section 29 of the Act.
66

106. To add it further, Section 29(3) and (4) of the Act talks about
the   questions   before   the   authority   which   are   to   be   disposed   of
within 60 days on receiving the applications.  It may be noticed that
there is no reference to any complaint referred to under Section 31
of the Act.   To buttress it further, Section 29 and Section 81 of the
Act   are   not   in   derogation   to   each   other.     To   the   contrary,   both
operate in different fields.  Section 29 deals with the meetings of the
authority   to   be   held   for   taking   policy/regulatory   decisions   in   the
interest of the stake holders and does not envisage in its fold quasi­
judicial   functions   which   the   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   5 th
  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
67

minutes   of   the   meeting   dated   5 th
  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 point no. 1:
Regarding hearing by 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,   for   disposal   of   complaint   cases   at
Lucknow and Gautambudh Nagar on same dates.
Decision:
Proposal was approved by the authority.
..
..”
108. Pursuant   to   the   delegation   of   power   to   the   single   member   of
the   authority,   complaints   filed   by   the   allottees/home   buyers   for
refund of the amount and interest under Section 31 of the Act came
to   be   decided   by   the   single   member   of   the   authority   after   hearing
the parties in accordance with the provisions of the Act. 
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109. This   Court,   while   examining   the   pari   materia   provisions   of
delegation of power  under  Section 29A and Section 19 of the SEBI
Act   which   empowered   the   board   to   delegate   its   power   to   any
member of the Board held that the board may in writing delegate its
power to any member of the board and such is valid in law as held
by   this   Court   in   Saurashtra   Kutch   Stock   Exchange   Ltd. (supra)
as under:­  
“6.   The   High   Court   dismissed   the   special   civil   application   vide
order   dated   19­11­2007   [ Saurashtra   Kutch   Stock   Exchange
Ltd.   v.   SEBI ,   Special   Civil   Application   No.   23902   of   2007,   decided
on   19­11­2007   (Guj)]   and   considered   the   submission   of   the
appellant in the following manner:
“Section 29­A is reproduced hereunder:
‘ 29­A.   Power   to   delegate .—The   Central   Government
may, by  order  published in the Official Gazette, direct
that   the   powers   (except   the   power   under   Section   30)
exercisable by it under any provision of this Act shall,
in   relation   to   such   matters   and   subject   to   such
conditions, if any, as may be specified in the order, be
exercisable also by the Securities and Exchange Board
of   India   or   Reserve   Bank   of   India   constituted   under
Section 3 of the Reserve Bank of India Act, 1934 (2 of
1934).’
Notification   dated   13­9­1994   issued   by   the   Central   Government
reads as under:
‘In exercise of powers conferred by Section 29­A of the
Securities   Contracts   (Regulation)   Act,   1956   (42   of
1956), the Central Government hereby directs that the
powers exercisable by it under Section 3, sub­sections
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(1), (2), (3) and (4) of Section 4, Section 5, sub­section
(2)   of   Section   7­A,   Section   13,   sub­section   (2)   of
Section   18,   Section   22   and   sub­section   (2)   of   Section
28 of the Act shall also be exercisable by 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 13­9­1994 issued in
exercise of power under Section 29­A 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 Full­Time 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   whole­time   single   member   of   SEBI   has
no   jurisdiction   to   cancel   or   withdraw   recognition
granted   to   a   stock   exchange   on   the   principle   that
delegate   cannot   further   delegate   its   power,   and
whether   the   order   under   challenge   is   without
jurisdiction?”
In   our   view,   it   is   not   necessary   to   go   into   the   above
question as we find that this very question was raised
by   the   appellant   before   the   High   Court   in
70

extraordinary   jurisdiction   under   Article   226   of   the
Constitution of India. The High Court, as noted above,
in its order dated 19­11­2007 [ Saurashtra Kutch Stock
Exchange   Ltd.   v.   SEBI ,   Special   Civil   Application   No.
23902 of 2007, decided on 19­11­2007 (Guj)] held that
the   withdrawal   of   recognition   under   Section   5   of   the
1956   Act   by   the   Full­Time   Member   of   SEBI   under
Section   11   of   the   Securities   and   Exchange   Board   of
India   Act,   1992   cannot   be   said   to   be   dehors   the
provisions   of   the   Act.   The   special   leave   petition   from
the   above   order   of   the   High   Court   came   to   be
dismissed   by   this   Court   on   10­3­2008   [ Saurashtra
Kutch Stock Exchange Ltd.   v.   SEBI , SLP (C) No. 5197 of
2008, decided on 10­3­2008 (SC)] . The same question
cannot   be   allowed   to   be   reopened   in   the   present
appeal.”
110. 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.
111. In   Heinz   India   Private   Limited   and   Another (supra),   the
revisional   powers   were   conferred   upon   the   State   Agricultural
Market   Board   under   Section   32   of   the   state   law   to   examine   the
orders   passed   by   the   market   committee.     Section   33   thereof
empowered the Board to delegate its powers to the Director.   In the
facts of the case, an objection was taken to the exercise of revisional
71

powers not by the Director himself but by some officer lower in the
hierarchy.     This   Court,   while   taking   note   of   the   definition   of
‘Director’   as   provided   in   Section   2(h)   to   include   “any   other   officer
authorized   by   the   Director   to   perform   all   or   any   of   his   functions
under this Act” held as under:­
“34.   Now, it is true that the stakes involved in the present batch of
cases are substantial and those called upon to satisfy the demands
raised against them would like their cases to be heard by a senior
officer or a committee of officers to be nominated by the Board. 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
72

delegated   to   any   of   its   members   obviously   for   expeditious   disposal
of   the   applications/complaints   including   complaints   filed   under
Section 31 of the Act and exercise of  such  power  by  a  general and
special   order   to   its   members   is   always   permissible   under   the
provisions of the Act.
113. In   the   instant   case,   the   authority   by   a   special   order   dated
5 th
  December,   2018   has   delegated   its   power   to   the   single   member
for disposal of complaints filed under Section 31 of the Act.   So far
as   refund   of   the   amount   with   interest   is   concerned,   it   may   not   be
considered   strictly   to   be   mechanical   in   process   but   the   kind   of
inquiry   which   has   to   be   undertaken   by   the   authority   is   of   a
summary   procedure   based   on   the   indisputable   documentary
evidence, indicating the amount which the allottee/home buyer had
invested   and   interest   that   has   been   prescribed   by   the   competent
authority   leaving   no   discretion   with   minimal   nature   of   scrutiny   of
admitted material on record is needed, if has been delegated by the
authority, to be exercised by the single member of the authority in
exercise   of   its   power   under   Section   81   of   the   Act,   which   explicitly
73

empowers   the   authority   to   delegate   under   its   wisdom   that   cannot
be said to be dehors the provisions of the Act.
114. What is being urged by the learned counsel for the appellants
in  interpreting  the scope of Section  29 of the  Act  is limited only  to
policy matters and cannot be read in derogation to Section 81 of the
Act   and   the   interpretation   as   argued   by   learned   counsel   for   the
promoters   if   to   be   accepted,   the   very   mandate   of   Section   81   itself
will become otiose and nugatory.
115. It   is   a   well­established   principle   of   interpretation   of   law   that
the court should read the section in literal sense and cannot rewrite
it to suit its convenience; nor does any canon of construction permit
the   court   to   read   the   section   in   such   a   manner   as   to   render   it   to
some extent otiose.  Section   81   of   the   Act   positively   empowers   the
authority   to   delegate   such   of   its   powers   and   functions   to   any
member by  a general or a special order with an exception to make
regulations under Section 85 of the Act.   As a consequence, except
the   power   to   make   regulations   under   Section   85   of   the   Act,   other
powers and functions of the authority, by a general or special order,
74

if delegated to a single member of the authority is indeed within the
fold of Section 81 of the Act.
116. The   further   submission   made   by   learned   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.
75

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   mainly   administrative   or   clerical,   and   cannot   possibly
encompass any of the core functions which are to be discharged by
the authority, the judicial functions are non­delegable, as these are
the   core   functions   of   the   authority.   The   submission   may   not   hold
good for the reason that the power to be exercised by the authority
in deciding complaints under Section 31 of the Act is quasi­judicial
in   nature   which   is   delegable   provided   there   is   a   provision   in   the
statute.     As   already   observed,   Section   81   of   the   Act   empowers   the
authority to delegate its power and functions to any of its member,
by general or special order.
118. In the instant case, by exercising its power under Section 81 of
the Act, the authority, by a special order dated 5 th
  December, 2018
has   delegated   its   power   to   the   single   member   of   the   authority   to
exercise and decide complaints under Section 31 of the Act and that
being permissible in law, cannot be said to be de hors the mandate
of   the   Act.     At   the   same   time,   the   power   to   be   exercised   by   the
76

adjudicating   officer   who   has   been   appointed   by   the   authority   in
consultation with the appropriate Government under  Section 71 of
the   Act,   such   powers   are   non­delegable   to   any   of   its   members   or
officers in exercise of power under Section 81 of the Act.  
119.     That   scheme   of   the   Act,   2016   provides   an   in­built
mechanism   and  any  order  passed  on  a  complaint  by  the  authority
under   Section   31   is   appealable   before   the   tribunal   under   Section
43(5)   and   further   in   appeal   to   the   High   Court  under   Section   58   of
the   Act   on   one   or   more   ground   specified   under   Section   100   of   the
Code   of   Civil   Procedure,   1908,   if   any   manifest   error   is   left   by   the
authority either in computation or in the amount refundable to the
allottee/home buyer, is open to be considered at the appellate stage
on the complaint made by the person aggrieved.
120. In view of the remedial mechanism provided under the scheme
of   the   Act   2016,   in   our   considered   view,   the   power   of   delegation
under   Section   81  of  the   Act   by   the   authority   to   one   of   its   member
for deciding applications/complaints under Section 31 of the Act is
not only well defined but expressly permissible and that cannot be
said to be dehors the mandate of law.
77

Question   no.   4:­   Whether   the   condition   of   pre­deposit   under
proviso to Section 43(5) of the Act for entertaining substantive
right of appeal is sustainable in law ?
121. Before   we   examine   the   challenge   to   the   proviso   to   Section
43(5)   of   the   Act   of   making   pre­deposit   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   sub­section   “person”   shall
include   the   association   of   allottees   or   any   voluntary   consumer
association registered under any law for the time being in force.”
122. It   may   straightaway   be   noticed   that   Section   43(5)   of   the   Act
envisages   the   filing   of   an   appeal   before   the   appellate   tribunal
78

against the order of an authority or the adjudicating officer by any
person aggrieved and where the promoter intends to appeal against
an   order   of   authority   or   adjudicating   officer   against   imposition   of
penalty,   the   promoter   has   to   deposit   at   least   30   per   cent   of   the
penalty   amount   or   such   higher  amount   as   may   be   directed  by   the
appellate   tribunal.   Where   the   appeal   is   against   any   other   order
which   involves   the   return   of   the   amount   to   the   allottee,   the
promoter   is   under   obligation   to   deposit   with  the   appellate  tribunal
the   total   amount   to   be   paid   to   the   allottee   which   includes   interest
and compensation imposed on him, if any, or with both, as the case
may be, before the appeal is to be instituted. 
123. The plea advanced by the learned counsel for the appellants is
that   substantive   right   of   appeal   against   an   order   of
authority/adjudicating   officer   cannot   remain   dependent   on
fulfilment of pre­deposit which is otherwise onerous on the builders
alone   and   only   the   builders/promoters   who   are   in   appeal   are
required   to   make   the   pre­deposit   to   get   the   appeal   entertained   by
the   Appellate   Tribunal   is   discriminatory   amongst   the   stakeholders
as defined under the provisions of the Act. 
79

124. Learned counsel further submits that if the entire sum as has
been computed either by the Authority or adjudicating officer, is to
be deposited including 30 per cent of the penalty in the first place,
the remedy of appeal provided by one hand is being taken away by
the   other   since   the   promoter   is   financially   under   distress   and
incapable   to   deposit   the   full   computed   amount   by   the
authority/adjudicating   officer.     The   right   of   appreciation   of   his
defence at appellate stage which is made available to him under the
statute   became   nugatory   because   of   the   onerous   mandatory
requirement   of   pre­deposit   in   entertaining   the   appeal   only   on   the
promoter who intends to prefer under Section 43(5) of the Act which
according   to   him   is   in   the   given   facts   and   circumstances   of   this
case   is   unconstitutional   and   violative   of   Article   14   of   the
Constitution of India.
125. The submission in the first blush appears to be attractive but
is not sustainable in law for the reason that a perusal of scheme of
the   Act   makes   it   clear   that   the   limited   rights   and   duties   are
provided   on   the   shoulders   of   the   allottees   under   Section   19   of   the
Act   at   a   given   time,   several   onerous   duties   and   obligations   have
80

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 vis­a­viz., 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 complaint for refund of the amount of payment which the
allottee/consumer   has   deposited   with   the   promoter   and   at   a   later
81

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.
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
82

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   pre­deposit   is
made over, the rights of the parties inter se could easily be saved for
adjudication at the appellate stage.
129. There   are   multiple   statutes   which   provide   a   condition   of   pre­
deposit   of  a   stipulated   statutory   amount   to   be   deposited   before  an
appeal   is   entertained   by   an   appellate   forum/tribunal   for   re­
appraisal   of   facts   and   law   at   the   appellate   stage   and   it   has   been
examined by this Court as well.  Proviso to Section 18 of SARFAESI
Act, 2002 of the Act which provides pre­deposit is as follows:­
“ 18. Appeal to Appellate Tribunal
…….
Provided   further   that   no   appeal   shall   be   entertained   unless   the
borrower has deposited with the Appellate Tribunal fifty per cent of
the   amount   of   debt   due   from   him,   as   claimed   by   the   secured
creditors or determined by the Debts Recovery Tribunal, whichever
is less:
Provided   also   that   the   Appellate   Tribunal   may,   for   the   reasons   to
be recorded in writing, reduce the amount to not less than twenty­
five per cent. of debt referred to in the second proviso.”
83

130. The   intention   of   the   legislature   appears   to   be   to   ensure   that
the   rights   of   the   decree­holder   (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 17
  observed
as under:­
“8.   It  is well­settled 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   pre­deposit   under   sub­
section   (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   of   the   Act
itself, can refuse to give full effect to the provisions of the statute.
We   have   no   hesitation   in   holding   that   deposit   under   the   second
proviso to Section 18(1) of the Act  being  a condition precedent for
preferring an appeal under the said section, the Appellate Tribunal
had   erred   in   law   in   entertaining   the   appeal   without   directing   the
appellant to comply with the said mandatory requirement.”
131. In   Har   Devi   Asnani   Vs.   State   of   Rajasthan   and   Others 18
,
the validity of proviso to Section 65(1) of the Rajasthan Stamp Act,
1998   came   up   for   consideration   in   terms   of   which   no   revision
application   could   be   entertained   unless   it   was   accompanied   by   a
17   (2011) 4 SCC 548
18   (2011) 14 SCC 160
84

satisfactory   proof   of   payment   of   50   per   cent   of   the   recoverable
amount. Relying  on  the  earlier  decisions  of this  Court including   in
Government   of   Andhra   Pradesh   and   Others   Vs.   P.   Laxmi   Devi
(Smt.) 19
,   the   challenge   was   repelled   and   the   view   expressed   in   P.
Laxmi   Devi (supra)   was   repeated   in   Har   Devi   Ashani (supra)
wherein this Court held as under:­
“ In our opinion in this situation it is always open to a party to file a
writ   petition   challenging   the   exorbitant   demand   made   by   the
registering   officer   under   the   proviso   to   Section   47­A   alleging   that
the   determination   made   is   arbitrary   and/or   based   on   extraneous
considerations,   and   in   that   case   it   is   always   open   to   the   High
Court,   if   it   is   satisfied   that   the   allegation   is   correct,   to   set   aside
such   exorbitant   demand   under   the   proviso   to   Section   47­A   of   the
Stamp Act by declaring the demand arbitrary. It is well settled that
arbitrariness   violates   Article   14   of   the   Constitution   vide   Maneka
Gandhi   v.   Union of  India   [(1978)  1  SCC  248]  .    Hence,  the  party   is
not remediless in this situation.”
132. At the same time, Section 19 of the Consumer Protection Act,
1986 prescribes a condition for pre­deposit which provides that an
appeal   shall   not   be   entertained   unless   50   per   cent   of   the   amount
awarded by the State Commission or Rs. 35,000/­ whichever is less
is   deposited   before   the   National   Consumer   Disputes   Redressal
Commission(NCDRC). This Court while placing reliance on  State of
19   (2008) 4 SCC 720
85

Haryana   Vs.   Maruti   Udyog   Ltd.   and   Others 20
;   in   Shreenath
Corporation and Others Vs. Consumer Education and Research
Society   and   Others 21
  held   that   such   a   condition   is   imposed   to
avoid frivolous appeals.
“ 7.   Section 19 of the Consumer Protection Act, 1986 deals with the
appeals   against   the   order   made   by   the   State   Commission   in
exercise   of   its   power   conferred   by   sub­clause   ( 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   sub­clause   ( 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 thirty­five 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   “pre­deposit”
required   for   an   appeal   to   be   entertained   by   the   National
Commission.
9.   The   second   proviso   to   Section   19   of   the   Act   mandates   pre­
deposit   for   consideration   of   an   appeal   before   the   National
20   2000(7) SCC 348
21   2014(8) SCC 657
86

Commission. It requires 50% of the amount in terms of an order of
the   State   Commission   or   Rs   35,000,   whichever   is   less   for
entertainment   of   an   appeal   by   the   National   Commission.   Unless
the   appellant   has   deposited   the   pre­deposit   amount,   the   appeal
cannot   be   entertained   by   the   National   Commission.   A   pre­deposit
condition to deposit 50% of the amount in terms of the order of the
State   Commission   or   Rs   35,000   being   condition   precedent   for
entertaining appeal, it has no nexus with the order of stay, as such
an   order   may   or   may   not   be   passed   by   the   National   Commission.
The condition of pre­deposit is there to avoid frivolous appeals.”
133. Similarly,   under   Section   19   of   the   Micro,   Small   and   Medium
Enterprises   Development   Act,   2006,   any   appellant,   other   than   the
supplier,   is   required   to   make   a   pre­deposit   of   75   per   cent   to
maintain an appeal against any decree, award or order made either
by   the   Micro   and   Small   Enterprises   Facilitation   Council   or   by   any
institution or  center  providing  alternate dispute resolution services
to   which   a   reference   is   made   by   the   Council.   Section   19   reads   as
follows:­
“19.   Application   for   setting   aside   decree,   award   or   order .—No
application for setting aside any decree, award or other order made
either by the Council itself or by any institution or centre providing
alternate  dispute  resolution  services   to  which   a  reference  is   made
by   the   Council,   shall   be   entertained   by   any   court   unless   the
appellant   (not   being   a   supplier)   has   deposited   with   it   seventy­five
per   cent.   of   the   amount   in   terms   of   the   decree,   award   or,   as   the
case may be, the other order in the manner directed by such court:
Provided   that   pending   disposal   of   the   application   to   set   aside   the
decree, award or order, the court shall order that such percentage
of   the   amount   deposited   shall   be   paid   to   the   supplier,   as   it
considers reasonable under the circumstances of the case, subject
to such conditions as it deems necessary to impose.”
87

134. Similarly,   the   condition   of   pre­deposit   has   been   examined
recently   by   this   Court   in   Tecnimont   Pvt.   Ltd.   (Formerly   Known
As   Tecnimont   ICB   Private   Limited)   Vs.   State   of   Punjab   and
Others 22
,   where   the   validity   of   Section   62(5)   of   the   Punjab   Value
Added   Tax   Act,   2005   (PVAT)   which   imposes   a   condition   of   25   per
cent   of   pre­deposit   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   twenty­five   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
22   AIR 2019 SC 4489
88

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   pre­
condition,   if   any,   against   the   order   passed   by   the   Authority   in
question.
137. In our considered view, the obligation cast upon the promoter
of pre­deposit 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 buyers/allottees 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   pre­deposit   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. 
89

Question No.5   :­ Whether the authority has the power to issue
recovery   certificates   for   recovery   of   the   principal   amount
under Section 40(1) of the Act?
138. To   examine   this   question,   it   will   be   apposite   to   take   note   of
Section 40 that  states regarding  the recovery  of  interest or  penalty
or   compensation   to   be   recovered   as   arrears   of   land   revenue,   and
reads as under:­
40.   Recovery   of   interest   or   penalty   or   compensation   and
enforcement of order, etc.—
(1)   If   a   promoter   or   an   allottee   or   a   real   estate   agent,   as   the   case
may   be,   fails   to   pay   any   interest   or   penalty   or   compensation
imposed   on   him,   by   the   adjudicating   officer   or   the   Regulatory
Authority   or   the   Appellate   Authority,   as   the   case   may   be,   under
this Act  or  the  rules and regulations  made  thereunder, it shall  be
recoverable from such promoter  or allottee or real estate agent, in
such manner as may be prescribed as an arrears of land revenue. 
(2)   If   any   adjudicating   officer   or   the   Regulatory   Authority   or   the
Appellate Tribunal, as the case may be, issues any order or directs
any person to do any act, or refrain from doing any act, which it is
empowered   to   do   under   this   Act   or   the   rules   or   regulations   made
thereunder,   then   in   case   of   failure   by   any   person   to   comply   with
such   order   or   direction,   the   same   shall   be   enforced,   in   such
manner as may be prescribed.”
139. The   submission   of   the   appellants/promoters   is   that   under
Section 40(1) of the Act only the interest or penalty imposed by the
authority   can   be   recovered   as   arrears   of   land   revenue   and   no
90

recovery   certificate   for   the   principal   amount   as   determined   by   the
authority   can   be   issued.   If   we   examine   the   scheme   of   the   Act,   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
91

of   the   amount   invested   by   the   allottee   along   with   the   interest
incurred   thereon   is   self­explanatory.     However,   if   Section   40(1)   is
strictly   construed   and   it   is   understood   to   mean   that   only   penalty
and   interest   on   the   principal   amount  are   recoverable  as   arrears   of
land revenue, it would defeat the basic purpose of the Act.
141. Taking into consideration the scheme of the Act what is to be
returned   to   the   allottee   is   his   own   life   savings   with   interest   on
computed/quantified   by   the   authority   becomes   recoverable   and
such   arrear   becomes   enforceable   in   law.     There   appears   some
ambiguity   in   Section   40(1)   of   the   Act   that   in   our   view,   by
harmonising   the   provision   with   the   purpose   of   the   Act,   is   given
effect to the provisions is allowed to operate rather running either of
them redundant, noticing purport of the legislature and the above­
stated   principle   into   consideration,   we   make   it   clear   that   the
amount   which   has   been   determined   and   refundable   to   the
allottees/home   buyers   either   by   the   authority   or   the   adjudicating
officer   in   terms   of   the   order   is   recoverable   within   the   ambit   of
Section 40(1) of the Act.
92

142. The   upshot   of   the   discussion   is   that   we   find   no   error   in   the
judgment   impugned   in   the   instant   appeals.     Consequently,   the
batch of appeals are disposed off in the above terms.    However, we
make   it   clear   that   if   any   of   the   appellant   intends   to   prefer   appeal
before   the   Appellate   Tribunal   against   the   order   of   the   authority,   it
may   be   open   for   him   to   challenge   within   30   days   from   today
provided   the   appellant(s)   comply   with   the   condition   of   pre­deposit
as contemplated under the proviso to Section 43(5) of the Act which
may   be   decided   by   the   Tribunal   on   its   own   merits   in   accordance
with law.   No costs.  
143. Pending application(s), if any, stand disposed of.
…………………………………J.
(UDAY UMESH LALIT)
…………………………………J.
(AJAY RASTOGI)
…………………………………J.
(ANIRUDDHA BOSE)
NEW DELHI
NOVEMBER 11, 2021
93