M/s Man Global Ltd. Mumbai v. Mr. Jitendra Jain

(i) The RERA awarded delayed interest from 1st February

2018 onwards for Phase-1 complainants and April 2018 onwards for Phase-2 complainants, till the developer offers possession of the apartments with Occupation Certificate, instead of the agreed date of possession as mentioned in the Agreement for Sale. Therefore, the respective Respondents preferred appeals and the learned Appellate Tribunal has passed the order by Pallavi/Dusane 18/80 which the Appellants were directed to pay the interest with effect from the next day of the date of possession as stipulated in the respective Agreements for Sale.

(ii) The said Act is retroactive and therefore, the contentions raised that the stringent provisions of the said Act will not apply to the present Project is not legal.

(iii) As far as the orders passed by the RERA are concerned, the same have become final qua the Appellant, as the Appeal filed by them has been dismissed for noncompliance of deposit of an amount under the proviso of Section 43(5) of the said Act.

(iv) The Appellant has not filed any reply before RERA and therefore, the contentions raised on merits are required to be rejected.

(v) Delay in handing over possession on account of delays in receiving NOC, permissions and sanctions from various authorities is not attributable to the allottees-apartment purchasers and therefore the same is irrelevant. Extension in date of handing over possession to the allottees as granted by RERA is irrelevant for the claim of Pallavi/Dusane 19/80 interest.

(vi) It is submitted that stipulation of the fresh/revised date under Section 2(1)(c) of the said Act read with Rule 4(2) of the Maharashtra Real Estate (Regulation and Development) Rules, 2017 (hereinafter referred to as “the said Rules”) is only to absolve the promoter of the penal consequences and the same will have no effect in respect of payment of interest under Section 18 of the said Act for delay in handing over possession by virtue of retroactive operation of the said Act. Stipulation of the fresh/revised date under Section 2(1)(c) of the said Act read with Rule 4(2) of the said Rules does not re-write the contract between the promoter and the purchaserallottee. The promoter is bound to pay interest under Section 18 of the said Act despite fresh/revised date under Section 2(1)(c) of the said Act read with Rule 4(2) of the said Rules for delay in handing over possession.

(vii) The factors enumerated under Section 72 of the said Act are not applicable to the complaint filed under Section 31 of the said Act before the Authority read with proviso Pallavi/Dusane 20/80 to Sections 18 of the said Act seeking interest for delayed possession. The factors enumerated in Section 72 of the said Act are to be considered only while adjudicating the compensation under Section 71 of the said Act. (viii)In the complaints of respective Respondents, no compensation has been claimed and compensation has not even been awarded under Section 71 of the said Act. (ix)The impugned order is passed by properly constituted Maharashtra Appellate Tribunal, Mumbai i.e. one Judicial Member and one Administrative or Technical Member under Section 43(3) of the said Act.

(x) Reliance is also placed on Section 18 read with Section

19(4) of the said Act basis which submission is made that the allottees are entitled to interest for every month’s delay in handing over the possession.

(xi) Reliance is placed on paragraphs 104, 128 to 142, 242 to

(xii) Reliance is placed on paragraph 25 of the decision of the

V. Anil Patni & Anr[4].

(xiii)Reliance is also placed on paragraphs 19 to 25, 41 and 50 and 55 to 56 of Newtech Promoters (supra). (xiv)Reliance is also placed on the decision of a learned Single Judge of this Court in the case of Bombay Dyeing & Manufacturing Co. Ltd. V. Ashok Narang[5]. (xv)No substantial question of law arises in the Second Appeal and therefore the Second Appeals deserve to be dismissed. (xvi)Learned counsels also raised several contentions and also relied on various decisions, reference to which, is made if necessary.

10. Mr. Chandrakant Sutrave is the Respondent No.2 in Second Appeal No. 123 of 2023 and he appeared in-person. He pointed out various dates of demand notice and date of payments. He submitted that the promoter had charged interest on payment for even a single day's delay. He pointed out various dates showing that he has booked the flat on 31st July 2010 and initially the flat was allotted on 10th floor

Pallavi/Dusane 22/80 and the date of possession was informed to be in December 2013. Thereafter the layout plans were unilaterally changed and he was allotted flat No. 1101 on 11th floor and additional floor rise payment was recovered from him. The possession date was thereafter extended to December 2015. He submitted that 95% of the consideration was paid on 14th January 2015 as per the demand notice dated 22nd December 2014. He submitted that as possession was not handed over, an Appeal was filed in MahaRERA Court in May 2017. He submitted that MahaRERA passed the impugned order on 4th February 2019 and Occupation Certificate for the said Project was received on 7th May

2019. He submitted that the Appeal is filed before the learned Appellate Tribunal in March 2019 and although Occupation Certificate was received in May 2019, the promoter failed to give possession and ultimately possession was given in December 2019. He submitted that as per Section 18 of the said Act, the specified date mentioned in the Agreement for giving possession is absolute and no grace period has been mentioned in the Agreement. He submitted that the learned Appellate Tribunal rightly held that permitting the possession beyond the specified date would lead to disastrous consequences rendering the agreed date of possession as specified in the Agreement for sale Pallavi/Dusane 23/80 irrelevant. He therefore, submitted that the Second Appeal be dismissed as no substantial question of law is raised. He also submitted that 100% of the amount be directed to be deposited with the learned Appellate Tribunal as per Section 43(5) of the said Act.

11. At the outset, it is to be noted that although the details like Agreement date, date of possession etc. are different in all these Second Appeals, however, the substantial questions of law raised in all these Second Appeals are the same.

12. For appreciating the controversy involved in the Second Appeals, it is necessary to set out factual position in one Second Appeal and, accordingly, the factual aspects as involved in the Second Appeal NO. 119 of 2023 are set out herein below.

(i) The Respondents in said Second Appeal No. 119 of 2023 entered into Agreement of Sale with the promoter on 17th December 2014. The said Respondents agreed to purchase flat No.1902 in building No. 5 in Phase-1.

(ii) The said Respondent has paid an amount of

(iii) Although the agreed date of possession as per the

(iv) The Appellant received Occupation Certificate with respect to the said building on 7th May 2019.

(v) The Respondents in said Second Appeal No.119 of 2023 filed Complaint No. CC 006 000 0000 23721. The learned Chairperson, MahaRERA i.e. the RERA has, inter alia, passed a common Order in about 53 complaints. The following is the operative part of the common order:

21. The proviso to Section 18(1) contemplates the situation where the allottee does not intend to withdraw from the project and provides Pallavi/Dusane 33/80 that, in that case, he or she is entitled to and must be paid interest for every month of delay till the handing over of the possession. The Supreme Court clarified that it is up to the allottee to proceed either under Section 18(1) or under proviso to Section 18(1). Thus, it is very clear that as per the provisions of Section 18 of the said Act, the allottee has got two distinct options: one option is to withdraw from the project and other option is to continue in the project. In both the cases two separate and distinct rights are provided. In this group of Second Appeals, the second option is relevant as concerned allottees i.e. respective Respondents have not withdrawn from the project and have continued in the project. The question is what are the rights of such allottees, who do not intend to withdraw from the project as there is a delay in handing over possession and whether they are entitled for interest.

22. As noted herein above proviso to Section 18 of the said Act clearly provides 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. The word used in Section 18 is ‘shall’ indicating that if there is delay in handing over possession the promoter is mandatorily Pallavi/Dusane 34/80 liable to pay interest for every month till the handing over of the possession. It is a settled legal position that the use of word ‘shall’ raises a presumption that particular provision is imperative; but this prima facie inference may be rebutted by other considerations such as object and scope of the enactment and the consequences flowing from such construction [Burjore and Bhawani Pershad v. Bhagana, ILR 10 Cal 557]. The word ‘shall’ is ordinarily mandatory but is sometimes not so interpreted if the context or the intention otherwise demands [Sainik Motors v. State of Rajasthan, AIR 1961 SC 1480]. Thus it is necessary to consider object and reasons for enacting the said Act, scope of the said Act and related aspects.

23. In this context it is necessary to set out the Preamble of the said Act, which reads as under:- “An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, 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 to establish an adjudicating mechanism for Pallavi/Dusane 35/80 speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto.”

24. In Newtech Promoters (supra), the Supreme Court in paragraphs 6 to 14 discussed the object and reasons of the said Act and also the scope of the said Act. The said paragraphs read as under:- “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. Pallavi/Dusane 36/80

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 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:— Pallavi/Dusane 37/80 “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 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 Pallavi/Dusane 38/80 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 fast-track dispute resolution mechanism. It also proposes to induct professionalism and standardization in the sector, thus 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 Pallavi/Dusane 39/80 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 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 Pallavi/Dusane 40/80 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 position-the 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 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.” Pallavi/Dusane 41/80

25. Thus, the said Act was enacted, inter alia, to achieve following objectives:-

Pallavi/Dusane 42/80 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.

26. In paragraphs 19 to 25 of Newtech Promoters (supra), the scheme of the said Act particularly of Section 18 and relevant provisions are also discussed. The said paragraphs read as under:

Pallavi/Dusane 43/80 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

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 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 Pallavi/Dusane 44/80 18(1) of the Act. Both these provisions recognize right of an allottee two distinct remedies, viz, refund of the amount together with interest 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."

27. Thus, object and reasons of the said Act and the very peculiar position of allottee as explained by the Supreme Court to the effect that the buyer borrows money to pay for a house and simultaneously plays the role of a financier as building projects collect money upfront and this puts the buyer in a very vulnerable position-the weakest stakeholder with a high financial exposure clearly shows that the legislative intent to use ‘shall’ used in Section 18 of the said Act is to make the same mandatory. Pallavi/Dusane 45/80

28. Thus, the object and reasons for enacting said Act, the scope of the said Act, relevant provisions of the said Act and the decision of the Supreme Court in Imperia Structures Limited (supra) and Newtech Promoters (supra) make it very clear that the allottee has an unqualified right to either withdraw from the Project and to seek refund of compensation and/or interest and if the allottee does not intend to withdraw from the project in spite of delay, then the allottee has been given the right to receive interest per month till receipt of possession. It is very clear that the same is an unqualified right of the allottee and there cannot be any embargo or constraints on the exercise of said right.

29. In the above background, it is necessary to consider the submission of Mr. Vineet Naik, learned Senior Counsel that for the delay which has been caused by various authorities in issuing permissions, sanctions, occupation certificates etc., the Appellant-Promoter cannot be held liable. It is significant to note that Section 71 of the said Act provides the power of adjudication of the compensation under Sections 12, 14, 18 and 19. The same is to be done by the adjudicating officer. For that purpose, it is provided that Section 72 of the said Act sets out the factors, which can be taken into consideration while determining Pallavi/Dusane 46/80 the compensation. Section 71 and Section 72 reads as under: "Section 71: Power to adjudicate.

71. (1) For the purpose of adjudging compensation under sections 12, 14, 18 and section 19, the Authority is appointed under Section 2(a) 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, 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 subsection (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 matter of the inquiry and if, on such Pallavi/Dusane 47/80 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. 72: Factors to be taken into account by the adjudicating officer. 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."

30. Thus, it is clear that the factors which can be taken into consideration while determining the compensation and interest under Section 71 are not required to be taken into consideration for determination of the interest which the allottee is entitled to for delay in handing over of the possession. It is very clear that for adjudication of the compensation and interest, various factors are enumerated including the amount of disproportionate gain or unfair advantage gained as a result of the default or the amount of loss caused as a result Pallavi/Dusane 48/80 of the default. However, the enquiry which is contemplated for determination of the interest, is very limited in scope. The enquiry, which is contemplated to decide right of allottee as far as proviso to Section 18(1) is concerned i.e. seeking interest for delayed possession, is only concerning the contractual date of handing over of possession and the delay in handing over of possession. It is very clear that the causes for delay are immaterial as the allottee has already paid the substantial consideration to the promoter with the expectation that he or she will get the possession on a particular date. As noted earlier the Supreme Court in Newtech Promoters (supra) observed that the real estate market in India has a peculiar feature. The buyer borrows money to pay for a house and simultaneously plays the role of a financier as promoters collect consideration upfront and this puts the buyer in a very vulnerable position-the weakest stakeholder with a high financial exposure. Thus, for the allottee who does not wish to withdraw from the project where possession is delayed, an unqualified right is given to the allottee to receive interest per month till receipt of the possession of the apartment. It is significant to note that the legislature has given only right to get interest and not the compensation to such an allottee who does not withdraw from the project in spite of delay in receiving Pallavi/Dusane 49/80 possession. Thus, it is clear that the factors enumerated in Section 72 of the said Act are not applicable in such a case.

31. Mr. Vineet Naik, learned Senior Counsel appearing on behalf of the Appellants has relied on paragraph 308 of Neelkamal Realtors (supra). The same reads as under:- “308. A perusal of Section 18 indicates that payment of interest including compensation or interest, as the case may be, is payable on account of default committed by the promoter. Although this Section does not consider a situation where the promoter is unable to complete or handover possession for no fault of his own, it would be open to him to claim frustration in such a case and return the money to the allotee with interest thereby stopping the interest that is to be paid till handing over possession. The provisions of RERA ensure that the allotees’ money is not misused or unreasonably retained by the promoter.” Above paragraph shows that the same recognises the right of the allottee to receive interest, compensation or interest in terms of Section 18 of the said Act. Thus, right of allottee to receive interest for delayed possession is recognised.

32. Perusal of the said Division Bench decision in Neelkamal Realtors Pallavi/Dusane 50/80 (supra) shows that from paragraph 1 to paragraph 203, opinion of Justice Naresh H. Patil, (as he then was) was recorded and thereafter, opinion of Justice R. G. Ketkar, (as he then was), has been recorded. Justice Ketkar was considering whether first proviso to Section 3(1), Section 3(2)(a), first proviso to Section 6, Sections 7, 8, 18, 22, 38, 40, 46, 59, 60, 61, 63 and 64 of the said Act are penal in nature. The relevant discussion is from paragraph 302 to 312. Thus, it is clear that paragraph 308 cannot be read in isolation.

33. In any case, the decision of the Supreme Court in Newtech Promoters (supra) as well as in Imperia Structures Limited (supra) makes it clear that the Supreme Court has held that right of the allottees as provided under Section 18 of the said Act is an unqualified right. As already set out, the allottee has got right to withdraw from the project and in that case, the allottee is entitled to refund with interest as well as for compensation and if an allottee does not withdraw from the project then his or her only right is to get interest per month for delayed possession and both these rights are unqualified. As far as the right to compensation is concerned, it has to be determined by the Adjudicating Officer and while determining the quantum of compensation or interest under Section 71, the factors which are enumerated in Section 72 are Pallavi/Dusane 51/80 required to be taken into consideration. Therefore, there is no substance in the contention raised by Mr. Naik that the promoters are not liable to pay interest if delay in handing over possession is on account of delay in receiving NOC and Occupation Certificate from the Corporation. The said factors will be relevant for determination of the compensation or interest in case the concerned allottee withdraws from the project.

34. In these Second Appeals almost all the allottees i.e. buyers have paid almost 95% or more of the agreed consideration in or around the year 2015. The date of Agreements are in 2013-2014/ 2015 and in most of the cases the agreed date of possession was in June 2015. It is an undisputed position that the possession has been actually handed over to the allottees after about more than 4 years. Thus, this is a case where the promoter had accepted the huge consideration and received almost entire consideration about 4 years ago and the possession has been handed over after a delay of more than 4 years.

35. In paragraph 25 of Newtech Promoters (supra), it has been held that the unqualified right of the allottee to seek refund under Section 18(1)(a) and Section 19(4) of the said Act is not dependent on any contingencies or stipulations thereof. The same will also apply to the allottees who who do not intend to withdraw from the project and are Pallavi/Dusane 52/80 entitled to receive interest for delayed possession. It is very clear that the allottees are not responsible for obtaining required permissions/sanctions and Occupation Certificate from the relevant statutory authorities.

36. Mr. Vineet Naik, learned Senior Counsel has also raised the contention that the observations of the Supreme Court regarding Section 18 of the said Act constitute as obiter dicta and, therefore, the same do not form a binding precedent. He relied on the decision of the Supreme Court in Director of Settlements, A.P. and Ors. V. M.R. Apparao and Anr.[6] and more particularly on paragraph 7 of the same, which reads as under:

37. The Supreme Court in the case of Union of India & Ors. V. Dhanwanti Devi & Ors.[7] discussed the aspect of binding precedent. The relevant discussion is in paragraphs 9 and 10 which reads as under:

38. In the decision of Shah Faesal v. Union of India[8], the Constitutional Bench of the Supreme Court while considering the constitutional challenge to two Constitution Orders issued by the President of India in exercise of his powers under Article 370 of the Constitution of India, inter alia, quoted with approval above decision of the Supreme Court in Union of India (supra). The said concepts of ratio decidendi and the obiter dictum are explained in paragraphs 25 and 26, which read as under:

25. In this line, further enquiry requires us to examine, to

Pallavi/Dusane 58/80 what extent does a ruling of coordinate Bench bind the subsequent Bench. A judgment of this Court can be distinguished into two parts: ratio decidendi and the obiter dictum. The ratio is the basic essence of the judgment, and the same must be understood in the context of the relevant facts of the case. The principal difference between the ratio of a case, and the obiter, has been elucidated by a three-Judge Bench decision of this Court in Union of India v. Dhanwanti Devi [Union of India v. Dhanwanti Devi, (1996) 6 SCC 44] wherein this Court held that: (SCC pp. 51-52, para 9)...

26. The aforesaid principle has been concisely stated by Lord Halsbury in Quinn v. Leathem [Quinn v. Leathem, 1901 AC 495 (HL)] in the following terms: (AC p. 506) “… that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides.” (emphasis supplied)

39. Thus, it is settled legal position that in order to understand and appreciate the binding force of a decision it is always necessary to see Pallavi/Dusane 59/80 what were the facts in the case in which the decision was given and what was the point which had to be decided. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi.

40. In view of the above legal position, it is necessary to discuss the decision of Imperia Structures Limited (supra) and Newtech Promoters (supra) to ascertain the ratio of the same.

41. The challenge in Imperia Structures Limited (supra) was to the common Judgment and Order dated 12th September 2018 passed by the National Consumer Dispute Redressal Commission, New Delhi. In group of consumer cases, the Supreme Court was considering whether the allottee under the said Act can also approach the consumer Courts established under the provisions of Consumer Protection Act, 1986. From that perspective, the Supreme Court has analysed the rights of the allottee under the said Act. The relevant discussion is to be found in Pallavi/Dusane 60/80 paragraphs 23 to 30, which read as under: “23. It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.

24. Before we consider whether the provisions of the RERA Act have made any change in the legal position stated in the preceding paragraph, we may note that an allottee placed in circumstances similar to that of the complainants, could have initiated the following proceedings before the RERA Act came into force: (A) If he satisfied the requirements of being a “consumer” under the CP Act, he could have initiated proceedings under the CP Act in addition to normal civil remedies. (B) However, if he did not fulfil the requirements of being a “consumer”, he could initiate and avail only normal civil remedies.

(C) If the agreement with the developer or the builder provided for arbitration:

(i) in cases covered under Clause (B)

(ii) in cases covered under Clause (A) hereinabove, in accordance with law laid down in Emaar MGF Land Ltd. v. Aftab Singh [Emaar MGF Land Ltd. v. Aftab Singh, (2019) 12 SCC 751: (2018) 5 SCC (Civ) 652], he could still choose to proceed under the CP Act.

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 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. Pallavi/Dusane 62/80

26. It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.

27. Section 79 of the RERA Act bars jurisdiction of a civil court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force.

28. On plain reading of Section 79 of the RERA Act, an allottee described in Clause (B) stated in para 24 hereinabove, would stand barred from invoking the jurisdiction of a civil court. However, as regards the allottees who can be called “consumers” within the meaning of the CP Act, two questions would arise; (a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and (b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.

29. In Malay Kumar Ganguly v. Sukumar Mukherjee Pallavi/Dusane 63/80 [Malay Kumar Ganguly v. Sukumar Mukherjee, (2009) 9 SCC 221: (2009) 3 SCC (Civ) 663: (2010) 2 SCC (Cri) 299], it was held by this Court: (SCC p. 252, para 43) “43. … The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. (See Bharat Bank Ltd. v. Employees [Bharat Bank Ltd. v. Employees, 1950 SCC 470: AIR 1950 SC 188: 1950 SCR 459] and Nahar Industrial Enterprises Ltd. v. Hong Kong & Shanghai Banking Corpn. [Nahar Industrial Enterprises Ltd. v. Hong Kong & Shanghai Banking Corpn., (2009) 8 SCC 646: (2009) 3 SCC (Civ) 481] )”

30. On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint.”

42. Thus, the Supreme Court in Imperia Structures Limited (supra) was considering rights of allottee under Section 18 of the said Act to determine whether the allottee has remedy under the Consumer Protection Act as well as under the said Act. To determine the Pallavi/Dusane 64/80 availability of remedies, the Supreme Court considered whether under the said Act an allottee has a right to get refund of the entire amount collected from the allottee towards consideration of the flat in case allottee seeks withdrawal from the project and if he or she does not intend to withdraw from the project then whether he or she is entitled to receive interest for delayed possession. The Supreme Court was considering the said aspect as it wanted to ascertain the remedies available to these allottees. It is in this context that, the Supreme Court has considered the rights given under Section 18 of the said Act and has held that an allottee can adopt remedies under Consumer Protection Act as well as the remedies under the said Act. Thus, the Supreme Court has considered the rights of allottees under the said Act. On the touchstone of the law laid down by the Supreme Court in Director of Settlements (supra), Union of India (supra) and Shah Faesal (supra), it cannot be said that the observation in paragraph 25 of the Imperia Structures Limited (supra) constitutes as obiter.

43. In Newtech Promoters (supra), the dispute before the Supreme Court is set out in paragraphs 2 to 4. The relevant portion of the said paragraphs, reads as under: Pallavi/Dusane 65/80

44. Thus, it is clear that in Newtech Promoters (supra), the Supreme Court was considering the rights of allottees/home buyers who have made a substantial investment from their hard earned money/loan and Pallavi/Dusane 67/80 the promoters have failed to hand over the possession in terms of the Agreement. The only difference is that in that case, the claimants have sought refund along with interest. In that context, the Supreme Court has considered the scheme of the Act and also scheme of Section 18 of the said Act. The relevant discussion is to be found in paragraphs 19 to 25 of the same, which read as under:

24. Section 19(4) is almost a mirror provision to Section Pallavi/Dusane 69/80 18(1) of the Act. Both these provisions recognize right of an allottee two distinct remedies, viz, refund of the amount together with interest 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.”

45. By no stretch of imagination, it can be said that the discussion of the Supreme Court in Newtech Promoters (supra) concerning Section 18 is obiter. Therefore, there is no substance in the contention raised by Pallavi/Dusane 70/80 Mr. Naik, learned Senior Counsel that the observations in Imperia Structures Limited (supra) and Newtech Promoters (supra) are obiter and not binding on this Court.

46. It is also relevant to note that the Supreme Court in Secundrabad Club v. CIT[9] has held that even obiter of the Supreme Court under Article 141 is binding on the Courts. The relevant paragraph reads as under:- “76. As against the ratio decidendi of a judgment, an obiter dictum is an observation by a court on a legal question which may not be necessary for the decision pronounced by the court. However, the obiter dictum of the Supreme Court is binding under Article 141 to the extent of the observations on points raised and decided by the Court in a case. Although the obiter dictum of the Supreme Court is binding on all courts, it has only persuasive authority as far as the Supreme Court itself is concerned.”

47. Thus, even assuming that the observations in Imperia Structures Limited (supra) and Newtech Promoter (supra) with respect to Section

Pallavi/Dusane 71/80 18 are obiter, the same will be binding on Courts. Therefore, there is no substance in the first substantial question of law raised by, Mr. Naik, learned Senior Counsel.

48. The second substantial question of law raised by Mr. Naik, learned Senior Counsel appearing for the Appellant is as follows:- Second substantial question of law: “Whether in view of the approval of extension in date of handing over of possession by the allottees, allottees continue to remain entitled to claim interest?”

49. Mr. Naik submitted that the present project was not an ongoing project when the said Act came into force. He submitted that on 1st May 2017 the project was registered under the provisions of the said Act and subsequently, the date of completion of project was revised to 3rd December 2018 and subsequently further revised to 30th August 2019 only on account of non-receipt of NOC from MMRDA and on account of frequent changes in plan as requested by MMRDA. Therefore, he submitted that as the extension has been granted by RERA, the allottees will not be entitled for the interest till the extension of period granted for handing over possession has been revised by RERA. However, it is to be seen that as per the various Agreements Pallavi/Dusane 72/80 executed with individual allottees, the Appellant-Promoter has agreed to hand over possession on particular dates and therefore, the said right to receive possession of the apartment is a contractual right. The said right cannot be wiped out only because the Authorities under the said Act have extended the date. The objective of extending the said dates is totally different. The aim is to bring the projects which are ongoing on the date of commencement of the said Act and for which the Completion Certificate has not be issued within the ambit of the said Act so that the promoters and the allottees will be entitled for the rights and obligations provided under the said Act and the aggrieved home buyer/person can approach the RERA and thereafter, the Appellate Tribunal. However, granting registration of such ongoing project under the said Act and extension of period for such registration or for the date of completion of the project in any manner will not wipe out the contractual obligations between the parties promoter/developer and apartment/flat purchaser. Therefore, there is no substance in the second substantial question of law raised by Mr. Naik.

50. The third substantial question of law raised by Mr. Naik, learned Senior Counsel appearing for the Appellant is as follows:- Third substantial question of law: Pallavi/Dusane 73/80 “Whether in respect of an ongoing project can the period of interest awarded be retrospective to the date of registration and the new date of completion of the project as per declaration required to be made under section 4(2)(c) r/w Rule 4 of the RERA Act?”

51. In this behalf, it is also important to note that in Newtech Promoters (supra), the Supreme Court was considering the question whether the said Act is ‘retrospective’ or ‘retroactive’ in its operation and what will be its legal consequences. The Supreme Court, after considering the scheme of the said Act, has held that the said Act, in its application is retroactive in character. It has been further held that the project which has already been completed and to which the Completion Certificate has already been granted will not come under the purview of the said Act and, therefore, vested or accrued rights, if any, in no manner are affected. It has been further clarified that, it will apply prospectively after getting the ongoing projects registered under Section 3 of the said Act and, then such projects will have to follow the mandate of the said Act.

52. It is significant to note the discussion in Neelkamal Realtors (supra), in this behalf in Paragraph 137, which reads as under:- Pallavi/Dusane 74/80 “137. The another plea raised is as to why a promoter shall pay interest for the past contractual rights, in case of failure to complete the project after registration under RERA, till the possession is handed over. Under the scheme of the RERA it is clear by now that a promoter has to self assess and declare time period during which he would complete the project. But in case, inspite of making genuine efforts, a promoter fails to complete the project, then the concerned authorities, adjudicators, forums, tribunals would certainly look into genuine cases and mould their reliefs accordingly. We do not find that on that count the provisions of Section 18(1)(a) are to be declared as contrary and violative of Articles 14 and 19(1)(g). Considering the scheme of the RERA and the provisions of Section 18(1)(b), we are of the view that the same are not contrary to Articles 14 and 19(1)(g) of the Constitution. The provisions cannot be struck down on the ground of challenge that its operation is retroactive in nature. Neither the provisions of Section 18(1)(a) and (b) violate Article 20 of the Constitution. ……….” It is obvious that the said discussion of Neelkamal Realtors (supra) is regarding compensation and for the purpose of determining the Pallavi/Dusane 75/80 compensation what is required to be noted is that Section 72 of the said Act specifies the factors which can be taken into consideration. With regards to the delay in completing the project or in handing over possession, if compensation is sought by the allottees by withdrawing from the project then various factors can be taken into consideration including the delay by the Municipal Authorities, Sanctioning Authority, etc. However, if the allottee does not intend to withdraw from the project and there is a delay in handing over possession than the agreed date of possession then, the allottee is entitled for the interest per month till possession is handed over. It is clear that in such a case, the allottee has already paid substantial amount to the promoter and, in spite of the same fails to get possession of the purchased apartment. Therefore, there is no substance in the third substantial question of law raised by Mr. Vineet Naik, learned Senior Counsel.

53. Therefore, there is no substance in any of the substantial questions of law raised by Mr. Naik, learned Senior Counsel appearing for the Appellants in first group of Second Appeals.

54. As far as second group of 22 Second Appeals are concerned, which are regarding the dismissal of the Appeals filed before the Appellate Tribunal for non-compliance of Section 43(5) of the said Act, Pallavi/Dusane 76/80 it is the contention of Mr. Vinod Talreja, learned counsel appearing for the Appellants that the said Section 43(5) is not mandatory. However, it is to be noted that in Newtech Promoters (supra), the Supreme Court was specifically considering the point where the condition of predeposit under the proviso to Section 43(5) of the said Act for entertaining substantive right of the Appeal is sustainable in law. The said aspect has been discussed in Newtech Promoters (supra) from paragraph 122 to 138 of the said judgment. The Supreme Court, in paragraph 138, has held as follows:-

Pallavi/Dusane 77/80

55. While considering the provisions of Sub-Section (5) of Section 43 of the said Act, the Supreme Court in paragraph 123 has held that as far as imposition of penalty is concerned, the promoter has to deposit at least 30% of the penalty amount or such higher amount as may be directed by the Appellate Tribunal and if the Appeal is against any other Order which involves the return of the amount to the allottee, then 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 or her, if any, or with both, as the case may be, before the appeal is to be instituted. Paragraph 123 reads as under:

56. It is an admitted position that in the present case, awarded amount is interest for delayed payment. Therefore, in terms of the Supreme Court decision in Newtech Promoters (supra), the Appellant was required to deposit 100% amount as directed by the RERA before the Appellate Tribunal. Therefore, there is no illegality committed by the learned Appellate Tribunal in dismissing the 22 Appeals for noncompliance of requirement of Section 43(5) of the said Act. Therefore, there is no substance in the second set of 22 Second Appeals and the same are also dismissed.

57. In view of the above discussion all the Second Appeals are dismissed, however, with no order as to costs. In view of dismissal of the Second Appeals, nothing survives in the Interim Applications and the same are also disposed of. Pallavi/Dusane 79/80

58. At this stage, the learned counsel appearing for the Appellant seeks stay of this order. However, the Appellant has not deposited any amount before the learned Appellate Tribunal in compliance with Section 43(5) of the said Act which is a mandatory provision, and in any case, there is a delay of more than 4 years in handing over possession of the flats after receipt of the consideration amount of more than 95% of the Agreement consideration amount. Therefore, the said request of stay is rejected. [MADHAV J. JAMDAR, J.] Pallavi/Dusane 80/80