# M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD v. STATE OF UP & ORS. ETC

- **Citation:** [2021] 9 S.C.R. 909
- **Court:** Supreme Court of India
- **Decided:** 2021-11-11
- **Case number:** Civil Appeal Nos. 6745-6749 of 2021
- **Bench:** Uday Umesh Lalit, Ajay Rastogi, Aniruddha Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-newtech-promoters-and-developers-pvt-ltd-v-state-of-up-ors-etc-35354
- **Pages:** 69

## Headnote

Real Estate (Regulation and Development) Act, 2016:
ss. 3,18, 19, 31, 71, 81, 43(5) proviso and 40(1) - Appellantspromoters and real estate developers failed to hand over possession
of the unit to allottees/home buyers - Complaint by home buyers
for refund - Single member of regulatory authority passed order
directing refund of the principal amount with interest - Writ petition
by promoters/real estate developers contending that single member
had no jurisdiction to pass the order of refund, and also challenged
the condition of pre-deposit for filing statutory appeal - Dismissal
of writ petition - On appeal, held: Act of 2016 is retroactive in
character - Conjoint reading of ss. 18 and 19 clearly manifests the
power of regulatory authority to examine and determine the outcome
of the complaint and refund of amount or interest thereon - It was
permissible for authority to delegate its power to one of its members
u/s 31 - Furthermore, the condition of pre-deposit for appeal was
sustainable - Thus, there is no error in the order passed by the
High Court - Uttar Pradesh Real Estate (Regulation and
Development) Rules, 2016.
Act of 2016 - Retrospective or retroactive in its operation -
Held: Application of the Act is retroactive in character and it cannot
be said to be violative of either Art. 14 or 19(1)(g) - 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 -
Projects already completed or to which the completion certificate
has been granted are not under its fold - At the same time, it would
apply after getting the on-going projects and future projects
registered u/s. 3 to prospectively follow the mandate of the Act - ss.
3(1), 13, 18(1) and 19(4) - Constitution of India - Arts. 14, 19(1)(g).
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ss. 12, 14, 18, 19 and 71 - Return/refund of the amount to
allottee - Jurisdiction of, regulatory authority or adjudicating officer
- Held: There is a complete delineation of the jurisdiction vested
with the regulatory authority and the adjudicating officer - A
conjoint reading of ss. 18 and 19 clearly manifests that when it
comes to refund of the amount, and interest thereon, it is the
regulatory authority which has the power to examine and determine
the outcome of a complaint - When it comes to seeking the relief of
adjudging compensation and interest thereon, the adjudicating
officer exclusively has the power to determine, keeping in view the
collective reading of s.71 r/w s.72 - If the adjudication u/ss. 12,
14, 18 and 19 other than compensation as envisaged, if extended
to the adjudicating officer as prayed that, may intend to expand
the ambit and scope of the powers and functions of the adjudicating
officer u/s. 71 and that would be against the mandate of the Act
2016.
s. 81 - Delegation of power to single member of the authority
to hear complaint instituted u/s. 31 - Permissibility of - Held: Is
permissible - s. 81 positively empowers the authority to delegate
such of its powers and functions to one of its member by general or
special order subject to s. 85 - It cannot said to be dehors the
mandate of law.
s. 43(5) proviso - Condition of pre-deposit for filing appeal
- Sustainability of - Held: Is sustainable in law - Obligation is cast
upon the promoter of pre-deposit u/s. 43(5), being a class in itself,
and the promoters 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 - Intention of the legislature was
to ensure that money once determined by the authority be saved if
appeal is to be preferred at the instance of the promoter after due
compliance of pre-deposit as envisaged u/s. 43(5) - Thus, it cannot
said to be onerous or in violation of Arts. 14 or 19(1)(g) of the
Constitution.
s. 40(1) - Issuance of recovery certifica

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 [2021] 9 S.C.R. 909
909
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD.
v.
STATE OF UP & ORS. ETC.
(Civil Appeal Nos. 6745-6749 of 2021)
NOVEMBER 11, 2021
[UDAY UMESH LALIT, AJAY RASTOGI
AND ANIRUDDHA BOSE, JJ.]
Real Estate (Regulation and Development) Act, 2016:
ss. 3,18, 19, 31, 71, 81, 43(5) proviso and 40(1) - Appellantspromoters and real estate developers failed to hand over possession
of the unit to allottees/home buyers - Complaint by home buyers
for refund - Single member of regulatory authority passed order
directing refund of the principal amount with interest - Writ petition
by promoters/real estate developers contending that single member
had no jurisdiction to pass the order of refund, and also challenged
the condition of pre-deposit for filing statutory appeal - Dismissal
of writ petition - On appeal, held: Act of 2016 is retroactive in
character - Conjoint reading of ss. 18 and 19 clearly manifests the
power of regulatory authority to examine and determine the outcome
of the complaint and refund of amount or interest thereon - It was
permissible for authority to delegate its power to one of its members
u/s 31 - Furthermore, the condition of pre-deposit for appeal was
sustainable - Thus, there is no error in the order passed by the
High Court - Uttar Pradesh Real Estate (Regulation and
Development) Rules, 2016.
Act of 2016 - Retrospective or retroactive in its operation -
Held: Application of the Act is retroactive in character and it cannot
be said to be violative of either Art. 14 or 19(1)(g) - 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 -
Projects already completed or to which the completion certificate
has been granted are not under its fold - At the same time, it would
apply after getting the on-going projects and future projects
registered u/s. 3 to prospectively follow the mandate of the Act - ss.
3(1), 13, 18(1) and 19(4) - Constitution of India - Arts. 14, 19(1)(g).
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ss. 12, 14, 18, 19 and 71 - Return/refund of the amount to
allottee - Jurisdiction of, regulatory authority or adjudicating officer
- Held: There is a complete delineation of the jurisdiction vested
with the regulatory authority and the adjudicating officer - A
conjoint reading of ss. 18 and 19 clearly manifests that when it
comes to refund of the amount, and interest thereon, it is the
regulatory authority which has the power to examine and determine
the outcome of a complaint - When it comes to seeking the relief of
adjudging compensation and interest thereon, the adjudicating
officer exclusively has the power to determine, keeping in view the
collective reading of s.71 r/w s.72 - If the adjudication u/ss. 12,
14, 18 and 19 other than compensation as envisaged, if extended
to the adjudicating officer as prayed that, may intend to expand
the ambit and scope of the powers and functions of the adjudicating
officer u/s. 71 and that would be against the mandate of the Act
2016.
s. 81 - Delegation of power to single member of the authority
to hear complaint instituted u/s. 31 - Permissibility of - Held: Is
permissible - s. 81 positively empowers the authority to delegate
such of its powers and functions to one of its member by general or
special order subject to s. 85 - It cannot said to be dehors the
mandate of law.
s. 43(5) proviso - Condition of pre-deposit for filing appeal
- Sustainability of - Held: Is sustainable in law - Obligation is cast
upon the promoter of pre-deposit u/s. 43(5), being a class in itself,
and the promoters 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 - Intention of the legislature was
to ensure that money once determined by the authority be saved if
appeal is to be preferred at the instance of the promoter after due
compliance of pre-deposit as envisaged u/s. 43(5) - Thus, it cannot
said to be onerous or in violation of Arts. 14 or 19(1)(g) of the
Constitution.
s. 40(1) - Issuance of recovery certificates for recovery of
principle amount under - Power of the authority - Held: Power of
authority to direct the refund of the principal amount is explicit in s.
18 and the interest that is payable is on the principal amount -
There is no interest in the absence of a principal amount being
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determined by the competent authority - 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
u/s. 40(1) - There appears some ambiguity in s. 40(1) and by
harmonising the construction of the scheme of the Act with the right
of recovery as mandated in s. 40(1), it is made 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 s. 40(1).
Object and reasons of the Act - Explained.
Interpretation of Statutes:
Retroactive statute - Meaning of - Held: Retroactive statute
means a statute which creates a new obligation on transactions or
considerations already passed or destroys or impairs vested rights
- 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.
Disposing of the appeals, the Court
HELD: 1.1. Looking to the scheme of Real Estate
(Regulation and Development) Act, 2016 and Section 3 in
particular, 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.
[Para 37][939-B-D]
1.2. 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
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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 submission of the promoters regarding the
contractual terms having an overriding effect over the
retrospective applicability of the Act, even on facts of the case.
[Para 41][940-D-F]
1.3. 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 timelines for getting the remaining development work
completed and from the scheme of the Act, the first proviso to
Section 3(1) is not in any manner 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. [Para 42][940-F-H]
1.4. 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 pre-existing contract and rights executed between the parties
in the larger public interest. [Para 45][941-D-F]
1.5. The consequences for breach of such obligations under
the Act are prospective in operation and in case ongoing project,
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of which completion certificate is not obtained, are not to be
covered under the Act, there is every likelihood of classifications
in respect of underdeveloped ongoing project and the new project
to be commenced. [Para 46][941-F]
1.6. 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.
[Para 47][941-G-H]
1.7. 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.
[Para 51][943-C]
1.8. 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. [Para 52][943-D-E]
1.9. Even the terms of the agreement to sale or home
buyers agreement invariably indicates the intention of the
developer that any subsequent legislation, rules and regulations
etc. issued by competent authorities would 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 submission regarding contractual terms
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD.
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having an overriding effect to the retrospective applicability of
the Authority under the provisions of the Act which is completely
misplaced and is rejected. [Para 53][943-E-G]
1.10. 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 on-going projects and future
projects registered under Section 3 to prospectively follow the
mandate of the Act 2016. [Para 54][943-G-H; 944-A]
State of Bombay (Now Maharashtra) versus Vishnu
Ramchandra AIR 1961 SC 307 : [1961] 2 SCR 26;
Jay Mahakali Rolling Mills vs. Union of India and
Others 2007 (12) SCC 198 : [2007] 8 SCR 855; Shanti
Conductors Private Limited and Another vs. Assam State
Electricity Board and Others 2019 (19) SCC 529;
Vineeta Sharma vs. Rakesh Sharma and Others 2020
(9) SCC 1 - referred to.
2.1. 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
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. [Para 75][952-B-D]
2.2. After the Act of 2016 has come into force, if any person
aggrieved wants to make complaint for refund against the
promotor or real estate agent other than compensation, it is to
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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. [Para 76][952-E-G]
2.3 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 pre-deposit being complied with can be further
challenged in appeal before the High Court under Section 58 of
the Act and, thus, the legislature has put reasonable restriction
and safeguards at all stages. [Para 79][954-A-B]
2.4 The submission 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, appears to
be attractive but is not supported with legislative intent for the
reason that if the allottee has made a default either in making
instalments or made any breach of the agreement, the promoter
has a right to cancel the allotment in terms of Section 11(5) of the
Act and proviso to sub-section 5 of Section 11 enables the allottee
to approach the regulatory authority to question the termination
or cancellation of the agreement by the promotor and thus,
the interest of the promoter is equally safeguarded. [Para 80]
[954-B-D]
2.5. 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
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with provisions of Sections 12, 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. [Para 81]954-D-G]
2.6 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, 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. [Para 82][955-A-D]
2.7 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 there is no
room for any inconsistency and the power of adjudication being
delineated, still if composite application is filed, can be segregated
at the appropriate stage. [Para 83][955-D-F]
2.8. If the literal rule of interpretation is seen 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 is always advisable to interpret the legislative
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wisdom in the literary sense as being intended by the legislature
and the Courts are not supposed to embark upon an inquiry and
find out a solution in substituting the legislative wisdom which is
always to be avoided. [Para 85][955-G-H; 956-A]
2.9 From the scheme of the Act 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 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 as prayed that, may intend to expand the
ambit and scope of the powers and functions of the adjudicating
officer under Section 71 and that would be against the mandate of
the Act 2016. [Para 86][956-B-E]
Imperia Structures Ltd. vs. Anil Patni and Another 2020
(10) SCC 783 - referred to.
3.1. 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
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.
[Para 103][962-A-B]
3.2. The emphasis 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
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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. The term meeting under Section 29 of the Act does
not deal with the performance of the authority in quasi-judicial
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. 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. [Paras 104, 105][962-B-E]
3.3 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. [Para 106][962-E-G]
3.4 Section 81 of the Act 2016 empowers the authority, by
general or special order in writing, to delegate its powers to any
member of the authority, subject to conditions as may be specified
in the order, such of the powers and functions under the Act.
What has been excluded is the power to make regulations under
Section 85, rest of the powers exercised by the authority can
always be delegated to any of its members obviously for
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
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permissible under the provisions of the Act. [Para 112][966-EG]
3.5 In the instant case, the authority by a special order dated
5th December, 2018 has delegated its power to the single member
for disposal of complaints filed under Section 31 of the Act.
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. 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 empowers the authority to delegate under
its wisdom that cannot be said to be dehors the provisions of the
Act. [Paras 107, 108, 113][962-H; 963-A; 966-G-H; 967-A-B]
3.6 What is being urged by 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 the promoters if to be accepted, the
very mandate of Section 81 itself will become otiose and nugatory.
[Para 114][967-B-C]
3.7 It is a well-established 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
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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, if delegated to a single member of
the authority is indeed within the fold of Section 81 of the Act.
[Para 115][967-C-E]
3.8 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. [Para 116][967-G-H; 968-A]
3.9 The power to be exercised by the authority in deciding
complaints under Section 31 of the Act is quasi-judicial in nature
which is delegable provided there is a provision in the statute.
Section 81 of the Act empowers the authority to delegate its power
and functions to any of its member, by general or special order.
[Para 117][968-C]
3.10 In the instant case, by exercising its power under
Section 81 of the Act, the authority, by a special order dated 5th
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 adjudicating officer who has been appointed
by the authority in consultation with the appropriate Government
under Section 71 of the Act, such powers are non-delegable to
any of its members or officers in exercise of power under Section
81 of the Act. [Para 118][968-D-E]
3.11 That scheme of the Act, 2016 provides an in-built
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
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appellate stage on the complaint made by the person aggrieved.
[Para 119][968-F-G]
3.12 In view of the remedial mechanism provided under
the Scheme of the Act, 2016 the power of delegation under
Section 81 of the Act by the authority to one of its members 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. [Para 120][968-G-H]
Province of Bombay vs. Kushaldas S Advani and Others
[1950] SCR 621; Shivji Nathubhai vs. Union of India
and Others [1960] 2 SCR 775; Harinagar Sugar Mills
Limited vs. Shyam Sunder Jhunjhunwala and Others
[1962] 2 SCR 339; Bombay Municipal Corporation vs.
Dhondu Narayan Chowdhary [1965] 2 SCR 929; Sahni
Silk Mills(P) Ltd. and Another vs. Employees State
Insurance Corporation (1994) 5 SCC 346 : [1994] 1
Suppl. SCR 626; Jagannath Temple Managing
Committee vs. Siddha Math and Others (2015) 16 SCC
542; Saurashtra Kutch Stock Exchange Ltd. vs.
Securities and Exchange Board of India and Another
(2012) 13 SCC 501; State of Uttar Pradesh vs. Batuk
Deo Pati Tripathi and Another (1978) 2 SCC 102 :
[1978] 3 SCR 131; Heinz India Private Limited and
Another vs. State of Uttar Pradesh (2012) 5 SCC 443 :
[2012] 3 SCR 898 - referred to.
Barnard vs. National Dock Labour Board 1953 (2) QB
18; Vine vs. National Dock Labour Board 1956 (1) QB
658 - referred to.
4.1 Section 43(5) of the Act envisages the filing of an appeal
before the appellate tribunal 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
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD.
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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. [Para 122][969-F-H]
4.2. 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 been imposed on the
promoters i.e. registration, duties of promoters, obligations of
promoters, adherence to sanctioned plans, insurance of real
estate, payment of penalty, interest and compensation, etc. under
Chapters III and VIII of the Act 2016. This classification between
consumers and promoters is based upon the intelligible differentia
between the rights, duties and obligations cast upon the allottees/
home buyers and the promoters and is in furtherance of the object
and purpose of the Act to protect the interest of the consumers
vis-a-viz., the promoters in the real estate sector. The promoters
and allottees are distinctly identifiable, separate class of persons
having been differently and separately dealt with under the various
provisions of the Act. 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. [Paras 125,
126][970-E-H]
4.3. Under the present real estate sector which is now being
regulated under the provisions of the Act 2016, the complaint for
refund of the amount of payment which the allottee/consumer
has deposited with the promoter and at a later stage, when the
promoter is unable to hand over possession in breach of the
conditions of the agreement between the parties, are being
instituted at the instance of the consumer/allotee demanding for
refund of the amount deposited by them and after the scrutiny of
facts being made based on the contemporaneous documentary
evidence on record made available by the respective parties. The
legislature in its wisdom has intended to ensure that the money
which has been computed by the authority at least must be
safeguarded if the promoter intends to prefer an appeal before
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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. [Para 127][971-A-D]
4.4. At the same time, it will avoid unscrupulous and
uncalled for litigation at the appellate stage and restrict the
promoter if feels that there is some manifest material irregularity
being committed or his defence has not been properly appreciated
at the first stage, would prefer an appeal for re-appraisal of the
evidence on record provided substantive compliance of the
condition of pre-deposit is made over, the rights of the parties
inter se could easily be saved for adjudication at the appellate
stage. [Para 128][971-E]
4.5. 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
reappraisal of facts and law at the appellate stage. The intention
of the instant legislation appears to be that the promoters ought
to show their bona fides by depositing the amount so
contemplated. [Paras 129, 135][971-F-G; 975-D-E]
4.6. It is indeed the right of appeal which is a creature of
the statute, without a statutory provision, creating such a right
the person aggrieved is not entitled to file the appeal. It is neither
an absolute right nor an ingredient of natural justice, the principles
of which must be followed in all judicial and quasi-judicial litigations
and it is always be circumscribed with the conditions of grant. At
the given time, it is open for the legislature in its wisdom to enact
a law that no appeal shall lie or it may lie on fulfilment of
precondition, if any, against the order passed by the Authority in
question. [Para 136][975-E-G]
4.7. The obligation cast upon the promoter of pre-deposit
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
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD.
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place by the competent authority, if legislature in its wisdom
intended to ensure that money once determined by the authority
be saved if appeal is to be preferred at the instance of the promoter
after due compliance of pre-deposit as envisaged under Section
43(5) of the Act, 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. [Para 137][975-G-H; 976-A-B]
Narayan Chandra Ghosh vs. UCO Bank and Others
(2011) 4 SCC 548 : [2011] 3 SCR 1024; Har Devi
Asnani vs. State of Rajasthan and Others (2011) 14 SCC
160 : [2011] 11 SCR 599; Government of Andhra
Pradesh and Others vs. P. Laxmi Devi (Smt.) (2008) 4
SCC 720 : [2008] 3 SCR 330; State of Haryana vs.
Maruti Udyog Ltd. and Others 2000 (7) SCC 348 :
[2000] 3 Suppl. SCR 185; Shreenath Corporation and
Others vs. Consumer Education and Research Society
and Others 2014 (8) SCC 657 : [2014] 9 SCR 356;
Tecnimont Pvt. Ltd. (Formerly Known As Tecnimont ICB
Private Limited) vs. State of Punjab and Others AIR
2019 SC 4489 : [2019] 12 SCR 229 - referred to.
5.1 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. [Para 139][976-G-H]
5.2 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
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scheme of the Act with the right of recovery as mandated in
Section 40(1) of the Act keeping in mind the intention of the
legislature to provide for a speedy recovery of the amount
invested by the allottee along with the interest incurred thereon
is self-explanatory. However, if 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. [Para 140][977-A-C]
5.3 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 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 abovestated principle into consideration, it is made 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. [Para 141][977-D-E]
5.4 There is no error in the judgment impugned in the
appeals. [Para 142][977-F]
Case Law Reference
[1961] 2 SCR 26
referred to
Para 43
[2007] 8 SCR 855
referred to
Para 48
(2019) 19 SCC 529
referred to
Para 49
(2020) 9 SCC 1
referred to
Para 50
(2020) 10 SCC 783
referred to
Para 78
[1950] SCR 621
referred to
Para 91
[1960] 2 SCR 775
referred to
Para 91
[1962] 2 SCR 339
referred to
Para 91
[1965] 2 SCR 929
referred to
Para 92
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD.
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[1994] 1 Suppl. SCR 626
referred to
Para 92
(2015) 16 SCC 542
referred to
Para 92
(2012) 13 SCC 501
referred to
Para 99
[1978] 3 SCR 131
referred to
Para 99
[2012] 3 SCR 898
referred to
Para 99
[2011] 3 SCR 1024
referred to
Para 130
[2011] 11 SCR 599
referred to
Para 131
[2008] 3 SCR 330
referred to
Para 131
[2000] 3 Suppl. SCR 185
referred to
Para 132
[2014] 9 SCR 356
referred to
Para 132
[2019] 12 SCR 229
referred to
Para 134
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.67456749 of 2021.
From the Judgment and Order dated 29.01.2021 of the High Court
of Judicature at Allahabad, Allahabad Bench, Uttar Pradesh in WRIT C
No.24602, 24604, 26451, 26450 and 26475 of 2020.
With
Civil Appeal Nos.6750, 6751, 6752, 6753, 6754, 6755, 6756 And
6757 of 2021.
Kapil Sibal, Sachin Datta, Narender Hooda, Aashish Chopra,
Siddharth Bhatnagar, Gopal Sankaranarayanan, Sr. Advs., Abhimanyu
Bhandari, Anirudh Bakhru, Ms. Roohe Hina Dua, Ms. Ananya Sikri,
Shalabh Singhal, Sukant Vikram, A. R. Takkar, Ms. Shreya Takkar,
Chritarth Palli, Sahil Tagotra, Ishan Dewan, Lokesh Malik, Anant Singh
Negi, Vishal Maharaj, Abhishek Sharma, Tarun Gupta, Tushar Singh,
Abhikalp Pratap Singh, Ms. Aagam Kaur, Ms. Bhavya Tyagi, Ms. Aadya
Yadav, Parag Maini, Abhimanyu Chopra, Ms. Pankhuri, Sanjeev
Sachdeva, Raghav Chadha, Rachna Yadav, Manoranjan Sharma, Vineet
Sinha, Keshav Saini, Deeptanshu Jain, Rajesh P., Senthil Jagadeesan,
Ms. Sonakshi Malhan, Ms. Mrinal Kanwar, Abhimanyu Tewari, Ms.
Eliza Bar, Ashray Chopra, Ankit Jaglan, Ardhendumauli Kumar Prasad,
Ms. Taruna Ardhendumauli Prasad, Pranav Proothi, Ashish Madaan,
Rajan Raj, Ms. Shikha Thakur, Hriday Kochhar, Faisal Sherwani,
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Surender Singh Hooda, Giriraj Subramanium, Pramod Sharma, Simarpal
Singh, Raghav Tankha, Prateek K.