# M/S Ats Reality Pvt. Ltd v. U.P. Real Estate Appellate Tribunal Lko. & Ors

- **Citation:** (2020) 12 ILRA 144
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-03-11
- **Case number:** Misc. Bench No. 23900 of 2020
- **Bench:** Pankaj Mithal, Saurabh Lavania
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-ats-reality-pvt-ltd-v-u-p-real-estate-appellate-tribunal-lko-ors-45448
- **Pages:** 7

## Headnote

(A) Civil Law -Real Estate (Regulation and
Development) Act (16 of 2016) - Appeal -
Pre-deposit - Section 43(5), Proviso -
Interpretation - where a promoter files an
appeal it shall not be entertained, unless
the promoter first deposits at least thirty
per cent of the penalty, or such higher
percentage as may be determined or the
total amount to be paid to the allottee
including interest and compensation -
Argument of promoter that promoter is
only liable to pay thirty percent of the
penalty or thirty percent of the total
amount to be paid to the allottee including
interest and compensation - Held - Proviso
in providing deposit of at least thirty
percent qualifies penalty amount only and
not total amount to be paid to allottee - if
only penalty is awarded then at least
thirty percent of same has to be deposited
before the appellate authority. For the
rest, such as on amount related to interest
or compensation or amount which was
deposited by allottee and ordered to be
returned, the expression "thirty percent"
would not apply & that the promoter is
liable to deposit the whole amount
directed to be paid (Para 14, 17,19)

Complaints made by allottees against promoter
alleging delay in possession, and claiming
charges/compensation on account of inordinate
delay in putting allottees in possession - RERA
(Real Estate Regulatory Authority) directed
petitioner to put allottees in possession & for
payment of interest @ MCLR + 1% from
12 All. M/S Ats Reality Pvt. Ltd. Vs. U.P. Real Estate Appellate Tribunal Lko. & Ors.
145
13.11.2017 till the date of offer of the
possession - Petitioner preferred statutory
appeal - Tribunal dismissed Appeal as the
requisite amount required to be paid as a precondition for entertaining and hearing the
appeals u/s 43 (5) was not deposited - Tribunal
held that it has no discretionary power to permit
the promoter to deposit only 30% of the total
amount directed to be paid as compensation
and interest to the allottees - Held - No illegality
on the part of Tribunal (Para 20)

B. Constitution of India - Article 226 - Real
Estate Regulatory Authority (RERA) -
judicial review of order passed by RERA
under Article 226 is not permissible - as
there is a statutory appeal provided
against it (Para 27)

Writ Petition dismissed. (E-5)

List of Cases cited: -

## Text

144 INDIAN LAW REPORTS ALLAHABAD SERIES

"30. It is necessary here to
remember the words of this Court in State
of Karnataka Vs. L.Muniswamy which
reads as follows : (SCC p.703, para 7)

"7...... In the exercise of this
wholesome power, the High Court is
entitled to quash a proceeding if it comes to
the conclusion that allowing the proceeding
to continue would be an abuse of the
process of the Court or that the ends of
justice require that the proceeding ought to
be quashed."

27. In the above circumstances, we
are of the considered view that the F.I.R.
does not disclose prima facie commission
of offence under Sections 406 and 420
I.P.C. The allegations of the F.I.R. have
been controverted by the petitioner and it
has been alleged that the complaint was
lodged with the motive to extort money and
respondent no.4 did not file counter
affidavit to rebut the averments of the
petitioner though ample time was granted
to him for the purpose. The allegations
regarding offences under Sections 504, 506
I.P.C. have already been found false by the
investigating officer, hence we find it a fit
case to quash the F.I.R.

28. In view of the above, the writ
petition is allowed. Accordingly, First
Information
Report
dated
11.3.2020
bearing Case Crime No.0098 of 2020,
under Sections 406, 420, 504, 506 I.P.C.,
Police Station Chowk, District Lucknow is
hereby quashed.
----------
(2020)12ILR A144
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 14.12.2020

BEFORE

THE HON'BLE PANKAJ MITHAL, J.
THE HON'BLE SAURABH LAVANIA, J.

Misc. Bench No. 23900 of 2020

M/S Ats Reality Pvt. Ltd. ...Petitioner
Versus
U.P. Real Estate Appellate Tribunal Lko. &
Ors. ...Respondents

Counsel for the Petitioner
Kunwar Sushant Prakash

Counsel for the Respondents:
C.S.C., Prashant Kumar, Shobhit Mohan
Shukla

(A) Civil Law -Real Estate (Regulation and
Development) Act (16 of 2016) - Appeal -
Pre-deposit - Section 43(5), Proviso -
Interpretation - where a promoter files an
appeal it shall not be entertained, unless
the promoter first deposits at least thirty
per cent of the penalty, or such higher
percentage as may be determined or the
total amount to be paid to the allottee
including interest and compensation -
Argument of promoter that promoter is
only liable to pay thirty percent of the
penalty or thirty percent of the total
amount to be paid to the allottee including
interest and compensation - Held - Proviso
in providing deposit of at least thirty
percent qualifies penalty amount only and
not total amount to be paid to allottee - if
only penalty is awarded then at least
thirty percent of same has to be deposited
before the appellate authority. For the
rest, such as on amount related to interest
or compensation or amount which was
deposited by allottee and ordered to be
returned, the expression "thirty percent"
would not apply & that the promoter is
liable to deposit the whole amount
directed to be paid (Para 14, 17,19)

Complaints made by allottees against promoter
alleging delay in possession, and claiming
charges/compensation on account of inordinate
delay in putting allottees in possession - RERA
(Real Estate Regulatory Authority) directed
petitioner to put allottees in possession & for
payment of interest @ MCLR + 1% from
12 All. M/S Ats Reality Pvt. Ltd. Vs. U.P. Real Estate Appellate Tribunal Lko. & Ors.
145
13.11.2017 till the date of offer of the
possession - Petitioner preferred statutory
appeal - Tribunal dismissed Appeal as the
requisite amount required to be paid as a precondition for entertaining and hearing the
appeals u/s 43 (5) was not deposited - Tribunal
held that it has no discretionary power to permit
the promoter to deposit only 30% of the total
amount directed to be paid as compensation
and interest to the allottees - Held - No illegality
on the part of Tribunal (Para 20)

B. Constitution of India - Article 226 - Real
Estate Regulatory Authority (RERA) -
judicial review of order passed by RERA
under Article 226 is not permissible - as
there is a statutory appeal provided
against it (Para 27)

Writ Petition dismissed. (E-5)

List of Cases cited: -

1. T. Chitty Babu Vs U.O.I. & ors. W.P.
No.29933 of 2019 & W.M.P. No.29844 of 2019

2. M/s Lotus Realtech Pvt. Ltd. Vs St. of Har. & ors.
C.W.P. No.15205 of 2020 (O&M) Dt. 23.9.2020

3. M/s Ansal Properties & Infrastructure Ltd. Vs
U.O.I. & ors. Misc. Bench No.5867 of 2020

4. Shree Chamundi Mopeds Ltd. Vs Church or
South India
Trust Association CSI Cinod
Secretariat, Madras 1992 AIR 1439

5. Titaghur Paper Mills Co. Ltd. & anr. Vs St. of
Orissa & ors. (1983) 2 SCC 433

6. Wolverhampton New Waterworks Co. Vs
Hawkesford (1859) 6 CBNS 336, 356

7. Mafatlal Industries Ltd. & ors. Vs U.O.I. &
ors. (1997) 5 SCC 536

(Delivered by Hon'ble Pankaj Mithal, J. &
The Hon'ble Saurabh Lavania, J.)

1. Heard Sri Prashant Chandra, Senior
Advocate assisted by Sri Sushant Prakash and
Ms. Mahima Pahwa, learned Counsel for the
petitioner, Sri Shobhit Mohan Shukla, learned
Counsel for respondent Nos.2, Sri Anand
Kumar Singh, learned Standing Counsel for
respondent No.3/State and Mr. Prashant
Kumar, learned Counsel for respondent
No.4/Yamuna
Expressway
Industrial
Development Authority.

2. The petitioner is a Private Limited
Company engaged in the promotion of
development and construction work. It
works as a promoter. In respect of one of
it's scheme ATS ALLURE, the petitioner is
registered as a promoter with RERA (Real
Estate
Regulatory
Authority).
Eight
complaints were made by different allottees
in connection with the above Scheme
alleging delay in possession, charging of
interest for the delayed period and claiming
charges/compensation
on
account
of
inordinate delay in putting allottees in
possession.

3. All the aforesaid complaints were
decided by RERA vide judgment and order
dated 25.6.2020 wherein apart from other
directions, the petitioner was directed to put
the allottees in possession of the respective
units allotted to them latest by 31.3.2021
and for payment of interest @ MCLR + 1%
from 13.11.2017 till the date of offer of the
possession excluding the lockdown period
24.3.2020 to 30.9.2020 due to COVID-19
pandemic.
The
interest
amount
was
directed to be adjusted in the final
outstanding balance to be paid by the
allottees and in the event, the interest
payable exceeds the balance amount, the
same was directed to be paid as directed
above.

4. Aggrieved by the aforesaid order
dated 25.06.2020, petitioner preferred a
statutory appeal before the Real Estate
Appellate Tribunal (hereinafter referred to
146 INDIAN LAW REPORTS ALLAHABAD SERIES
as 'the Tribunal']. Similar appeals were
also preferred by the other allottees against
the orders passed by RERA in their
respective complaints. They all remained
defective as the requisite amount required
to
be
paid
as
a
pre-condition
for
entertaining and hearing the appeals was
not deposited by the petitioner but were
clubbed together.

5. All appeals (total 10) were
dismissed vide order dated 18.10.2020 as
despite several opportunities, the petitioner
failed to comply with the mandatory
condition contained in 43 (5) of the Real
Estate (Regulation and Development) Act,
2016 [hereinafter referred to as the '2016
Act']. The Tribunal held that it has no
discretionary power to permit the promoter
to deposit only 30% of the total amount
directed to be paid as compensation and
interest to the allottees.

6. Sri Prashant Chandra, Senior Counsel
appearing for the petitioner submitted that the
petitioner had deposited 30% of the amount as
contemplated under Section 43 (5) of the 2016
Act and as such, the appeal was competent
which could not have been dismissed. The
Tribunal has manifestly erred in interpreting
Sub-Section (5) of Section 43 of the 2016 Act
to hold that the promoter is liable to deposit the
whole amount directed to be paid, whereas the
condition is only for payment of 30% of the
penalty or the total amount including interest
and compensation. If the said condition is read
otherwise it would make the condition to be
unreasonable and onerous and in turn, would
render the provision of statutory appeal to be
illusory and negatory.

7. In response to the argument so
advanced on behalf of the petitioner, Sri
Shobhit Mohan Shukla, learned Counsel for
RERA, Sri Anand Kumar Singh, learned
Standing Counsel and Sri Prashant Kumar,
learned
Counsel
for
respondent
No.4
submitted that the language of the proviso to
Sub-Section (5) of Section 43 of the 2016 Act
is plain and simple. It provides that the appeal
shall not be entertained, if the promoter has not
deposited with the Tribunal at least 30% of the
penalty or the total amount payable to the
allottee including interest and compensation, if
any, or both as the case may be for hearing of
the appeal. It has also been submitted by them
that the validity of Sub-Section (5) of Section
43 of 2016 Act has been upheld by various
High Courts, including that of Madras, Punjab
& Haryana and Allahabad and as such, there is
no scope for this Court to interfere in the
matter.

8. Sri Prashant Chandra then
submitted that the decisions of Madras
High Court and Punjab & Haryana High
Court are already under stay by the Apex
Court and that he has been informed that
SLP has also been filed against the decision
of the Allahabad High Court upholding the
validity of Section 43 (5) of 2016 Act. He
further submitted that such a provision has
to be read in harmonious manner so as to
make the provision workable, rather than to
defeat its object by literary interpretation.

9. The entire controversy as argued
before us revolves around the true and
correct interpretation of the proviso to SubSection (5) of Section 43 of 2016 Act and if
it is arbitrary and bad in law.

10. It is thus important to reproduce
Sub-Section (5) of Section 43 of 2016 Act
which reads as under:-

43 (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
12 All. M/S Ats Reality Pvt. Ltd. Vs. U.P. Real Estate Appellate Tribunal Lko. & Ors.
147
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 atleast thirty per cent. of
the penalty, or such higher percentage as
may be determined by the Appellate
Tribunal, or the total amount to be paid to
the
allottee
including
interest
and
compensation imposed on him, if any, or
with both, as the case may be, before the
said appeal is heard.

Explanation, -- For the purpose of
this sub-section "person" shall include the
association of allottees or any voluntary
consumer association registered under any
law for the time being in force."

11. The aforesaid provision on its
plain and simple reading provides for an
appeal before the Tribunal. The appeal,
apart
from
other
persons
such
as
allottees/complainants or any other party
aggrieved can also be filed by a promoter.
It is in the case of an appeal filed by the
promoter
that
the
aforesaid
proviso
provides that it shall not be entertained
unless the promoter deposits

(i) at least thirty percent of the
penalty, or such higher percentage as may
be determined by the Appellate Tribunal,

or

(ii) the total amount to be paid to the
allottee including interest and compensation.

12. Therefore, for the purposes of
entertaining and hearing an appeal filed by the
promoter, it is essential for the promoter to make
the deposit as contemplated here-in-above.

13. The argument is that the promoter
is only liable to pay thirty percent of the
penalty or thirty percent of the total amount
to be paid to the allottee including interest
and
compensation.
In
other
words,
according to Sri Chandra, the words 'thirty
percent' used therein refers not only to the
penalty amount, but also to the total
amount to be paid to the allottee including
interest and compensation.

14. To our mind, this is not the correct
way of reading the aforesaid proviso. The
aforesaid proviso in providing deposit of at
least thirty percent qualifies the penalty
amount only and not the total amount to be
paid to the allottee. This is clear from the
use of the word 'or' between the penalty and
the total amount. In view of the use of the
conjunction
'or',
thirty
percent
only
qualifies the penalty and not the total
amount. Otherwise, the word 'total' may not
have been added before the word 'amount'
used therein.

15. The clause, "or such higher
percentage as may be determined by the
Appellate Tribunal" appearing after the
word 'penalty' in the aforesaid proviso also
refers to the penalty only.

16. In order to make things simpler,
the relevant portion of the said proviso may
be read as under after omitting the clause
for the time being:-

"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
atleast thirty per cent. of the penalty 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."
148 INDIAN LAW REPORTS ALLAHABAD SERIES

17. Now, if we see the use of words
'thirty percent' it denotes that it qualifies
penalty only and since thereafter the word
'or' is used, it does not qualify the words
'total amount' referred thereafter in the
proviso. In short, in its literal interpretation,
it means (i) atleast thirty percent of the
penalty; or (ii) the total amount to be paid
to the allottee including interest and
compensation. In this way, it is clear that
the amount liable to be deposited by the
promoter for entertaining and hearing of
his/her appeal is either atleast thirty percent
of the penalty or the total amount to be paid
to the allottee including interest and
compensation. There cannot be any other
meaning or interpretation of the aforesaid
proviso.

18. The use of the words 'if any' or
with 'both' in the aforesaid proviso is also
very relevant and important for the
purposes of interpretation of the aforesaid
proviso. The legislature appears to be
conscious of the fact that the promoter
under the orders of RERA, may be required
to either deposit penalty or any other
amount payable to the allottee including
interest and compensation, if any, and in
some cases may be both. So in the case
where penalty alone has to be paid, the
appeal would be competent if atleast thirty
percent of it or any higher amount, as may
be determined by the Tribunal is deposited,
but where any other amount is directed to
be paid, the total of the said amount
including interest and compensation is also
to be deposited as a condition precedent or
both of them.

19. The language coughed/set forth in
provision in issue appears to be used after due
consideration of other provisions of 2016 Act
such as Section 12, which provides for return of
entire investment alongwith interest and
compensation; Section 14, which provides
grant of compensation to allottee; Section 18
(1), as per which the allottee would be entitled
to amount deposited by him with promoter
alongwith interest as also compensation from
promoter if he withdraw himself from the
project and if does not intend to withdraw from
the project then in that event the allottee is
entitled to interest for every month of delay;
Section 18 (2) and Section 18 (3), which relate
to grant of compensation as allottee, and
Section 38, which empowers the authority to
impose penalty or interest. In this view also,
there appears to be no ambiguity in the proviso
in issue, i.e., proviso to Section 43 (5) of 2016
Act and the provision in issue has to be read in
the light of provisions referred to here-in-above.
It is important to read the relevant provisions of
the 2016 Act conjointly. Accordingly, if only
penalty is awarded then at least thirty percent of
same has to be deposited before the appellate
authority. For the rest, such as on amount
related to interest or compensation or amount
which was deposited by allottee and ordered to
be returned, the expression "thirty percent"
would not apply.

20. In view of the aforesaid
discussion, we do not find that there is any
error or illegality on the part of the Tribunal
in construing or interpreting the true sense
of the proviso to Sub-Section (5) of Section
43 of the 2016 Act.

21. Having held as above, we proceed
on the second aspect of the matter whether
such a condition of deposit of the total
amount would be unfair, unreasonable,
arbitrary or onerous so as to make the
appeal to be illusion.

22. In this connection, first of all, the
petitioner has not challenged the vires or
the validity of Sub-Section (5) of Section
43 of 2016 Act. At the same time, the
12 All. M/S Ats Reality Pvt. Ltd. Vs. U.P. Real Estate Appellate Tribunal Lko. & Ors.
149
validity of the aforesaid provision has been
upheld not only by the Madras High Court in
T. Chitty Babu1 and Punjab & Haryana High
Court in M/s Lotus Realtech Pvt. Ltd.2 but
also by the Allahabad High Court in M/s
Ansal Properties3. The said decisions may be
under challenge in superior Court and there
may be stay in respect of the decisions of
Madras High Court and Punjab & Haryana
High Court, nonetheless, in view of the
decision of the Apex Court in Shree
Chamundi Mopeds Ltd.4 the said decisions
continue to exist in the law books and do not
seize to exist. Moreover, there is no stay
against the decision of the Allahabad High
Court. The said decision in clear and
unequivocal manner lays down that the
condition of depositing the amount as
contemplated under Section 43 (5) of the
2016 Act is neither unreasonable or onerous.
The Court in holding as such held that the
earlier decisions cited from the side of the
promoter are of no help as they were
rendered in connection with taxation laws,
whereas in the cases under RERA, the
amount is required to be deposited after
complete
adjudication
of
the
lis
for
entertaining and hearing the appeal thereafter.

23. The position is different where the
'lis' regarding liability to pay any amount is
adjudicated by an independent authority or
court as in those cases the liability stands
determined with findings and reasoning.

24. In the light of the above, we have
no option but to follow the opinion given
by a coordinate Bench of the Allahabad
High Court and to hold that the condition
of pre-deposit contained in the above
provision is not unfair and unreasonable.

25. There is another way of looking to
the aforesaid problem. The judgment and
order passed by RERA is like a money
decree which cannot ordinarily be stayed in
appeal on the analogy of the language of
Order 41 Rule 5 of Code of Civil Procedure
including Allahabad amendment therein.
Thus applying the same analogy, we are of
the view that the legislature in its wisdom
has rightly provided for the deposit of the
total
amount
including
interest
and
compensation or atleast thirty percent of
the penalty as a condition precedent for
entertaining and hearing the appeal of the
promoter. The money decrees if complied
with during pendency of appeal do not
result in any irreparable loss and injury
which cannot be compensated adequately
subsequently.

26. The challenge to the Appellate
Order dated 19.10.2020 thus fails.

27. We have not been addressed so as
to assail the order dated 25.6.2020 passed
by RERA obviously for the reason that
judicial review of it under Article 226 of
the Constitution of India is not permissible
when there is a statutory appeal provided
against it and the same has failed for one
reason or the other.

28. We may usefully refer to the
exposition of the Apex Court in Titaghur5,
wherein it is observed that where a right or
liability is created by a statute, which gives
a special remedy for enforcing it, the
remedy provided by that statute must only
be availed of.

29. In paragraph 11 of the above
report, the Court observed thus:-

"11. Under the scheme of the Act,
there is a hierarchy of authorities before
which the petitioners can get adequate
redress
against
the
wrongful
acts
complained of. The petitioners have the
150 INDIAN LAW REPORTS ALLAHABAD SERIES
right to prefer an appeal before the
Prescribed Authority under sub-section (1)
of Section 23 of the Act. If the petitioners
are dissatisfied with the decision in the
appeal, they can prefer a further appeal to
the Tribunal under sub-section (3) of
Section 23 of the Act, and then ask for a
case to be stated upon a question of law for
the opinion of the High Court under
Section 24 of the Act. The Act provides for
a complete machinery to challenge an order
of assessment, and the impugned orders of
assessment can only be challenged by the
mode prescribed by the Act and not by a
petition
under
Article
226
of
the
Constitution. It is now well recognised that
where a right or liability is created by a
statute which gives a special remedy for
enforcing it, the remedy provided by that
statute only must be availed of. This rule
was stated with great clarity by Willes, J. in
Wolverhampton6 in the following passage:

"There are three classes of cases
in which a liability may be established
founded upon statute. . . . But there is a
third class, viz. where a liability not
existing at common law is created by a
statute which at the same time gives a
special and particular remedy for enforcing
it.... The remedy provided by the statute
must be followed, and it is not competent to
the party to pursue the course applicable to
cases of the second class. The form given
by the statute must be adopted and adhered
to."

The rule laid down in this
passage was approved by the House of
Lords in Neville v. London Express
Newspapers Ltd. (1919 AC 368) and has
been reaffirmed by the Privy Council in
Attorney-General of Trinidad and Tobago
v. Gordon Grant & Co. Ltd. (1935 AC 532)
and Secretary of State v. Mask & Co. (AIR
1940 PC 105). It has also been held to be
equally applicable to enforcement of rights,
and has been followed by this Court
throughout. The High Court was therefore
justified in dismissing the writ petitions in
limine."
 (emphasis supplied)"

30. In the subsequent decision in
Mafatlal7, the Apex Court went on to
observe that an Act cannot bar and curtail
remedy under Article 226 or 32 of the
Constitution. The Court, however, added a
word of caution and expounded that the
constitutional Court would certainly take
note of the legislative intent manifested in
the provisions of the Act and would
exercise its jurisdiction consistent with the
provisions of the enactment. To put it
differently, the fact that the High Court has
wide jurisdiction under Article 226 of the
Constitution, does not mean that it can
disregard the substantive provisions of a
statute and pass orders which can be settled
only through a mechanism prescribed by
the statute.

31. In view of what has been stated
above, the writ petition filed by the
promoter
fails
and
is
accordingly
dismissed.
----------
(2020)12ILR A150
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 14.12.2020

BEFORE

THE HON'BLE ALOK MATHUR, J.

Application U/S 482/378/407 No. 770 of 2015

C.B.I., New Delhi ...Applicant
Versus
State of U.P. & Anr. ...Opp. Parties

Counsel for the Applicant:
Amarjeet Singh Rakhra, Varun Pandey