Full Text
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 5893 OF 2021
Man Global Ltd, A company registered under the
Companies Act, 1956, having office at
101, Man House, Opposite Pawan
Hans, SV Road, Vile Parle (East), Mumbai 400056 …Petitioner
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Ram Prakash Joukani, Indian Inhabitant, having address at
207, Bhullar Star Estate, Behind Sakinaka Telephone Exchange, Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai 400072 …Respondent
Man Global Ltd, A company registered under the
Companies Act, 1956, having office at
101, Man House, Opposite Pawan
Hans, SV Road, Vile Parle (East), Mumbai 400056 …Petitioner
Bharat Prakash Joukani, Indian Inhabitant, having address at
207, Bhullar Star Estate, Behind Sakinaka Telephone Exchange, Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai 400072 …Respondent
APPEARANCES for the petitioner Mr Mayur Khandeparkar, with
Vikram Garewal, Vinod Talreja, i/b GD Talreja & Associates, in both Writ Petitions. for respondent Mr Nimay Dave, with Anosh
Sequeira, Dhiren Durante, Sahil Namavati, i/b Lexicon
Law Partners, in both Writ
Petitions.
DATED : 6th March 2023
ORAL JUDGMENT
1. The matter pertains to the assignment of a Single Judge. However, by an order of 29th November 2021, a learned Single Judge of this Court while considering these two Petitions, expressed doubts about the correctness of an earlier decision of another learned Single Judge, i.e., a bench of co-ordinate strength in Nirman Realtors and Developers Ltd v Danish Ansari.[1] There being this difference of opinion, the matter came to be referred to a larger Bench by the Hon’ble Chief Justice in exercise of his administrative powers. The matter was then assigned to this Bench. We will not, of course, be deciding the Writ Petition itself but only the point that is referred to for a decision.
2. We have heard Mr Khandeparkar for the Petitioner, Man Global Ltd and Mr Dave for the Respondents in both Petitions.
3. The issue turns on an interpretation of Section 58 of the Real Estate (Regulation and Development) Act 2016 (“RERA”). The Section reads as follows: “58. Appeal to High Court: (1) Any person aggrieved by any decision or order of the Appellate Tribunal, may file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908: Provided that the High Court may entertain the appeal after the expiry of the said period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time. Explanation: The expression “High Court” means the High Court of a State or Union territory where the real estate project is situated.
(2) No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties.” (Emphasis added)
4. The learned Single Judge in Nirman Realtors was dealing with a set of First Appeals filed before the RERA Appellate Tribunal. The Appellate Authority had, in exercise of powers under Section 43(5), directed the appellants-promoters to deposit 40% of the total amount involved including interest and compensation by a given date. The first appellant filed appeals under Section 58.
5. In Nirman Realtors, the learned Single Judge held in paragraph 3 to 10 as follows: “3. The builder-developer preferred First Appeals before the Appellate Tribunal under the Real Estate (Regulation and Development) Act, 2016 and by order dated 07.08.2018, the Appellate Authority under Section 43(5) proviso directed Appellants-Promoters to deposit 40% of the total amount including interest and compensation as per order dated 26.04.2018 to be deposited before 03.09.2018. The aggrieved first appellants have preferred these Appeals under Section 58.
4. The learned Counsel for the Appellants argued that Section 58 provided right of Appeal to the High Court against any decision or order passed on merits by the First Appellate Tribunal. It need not be in the form of Decree. The words used ‘or any one or more of the grounds specify in Section 100 of Code of Civil Procedure’ should be understood only as to the necessity of substantial question of law and it need not be understood to be Appeal from decree.
5. In case complaint under RERA Act, the Authority or Adjudicating Officer passes some orders on merits disposing the complaint before him, there can be first Appeal before the Appellate Tribunal under Section 43. If the Appellate Tribunal disposes of the First Appeal, then Second Appeal would lie as per Section 58 and the same would come before this Bench which has assignment of all Second Appeals. In the present case, admittedly, all the first appeals are pending and are not disposed of. The orders are passed under Section 43(5) proviso which reads as under: “43(5).… provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained without the promoter first having deposited with the appellate tribunal at least thirty per cent of the penalty or such higher percentage as may be determined by the Appellant Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him if any or with both, as the case may be before the said Appeal is heard”.
6. The impugned order is not disposing of the Second Appeals either on merits or even on technical grounds like limitation or maintainability. When no order is passed by the Appellate Tribunal under RERA Act finally adjudicating the rights of the parties the said order is not a decree and these appeals challenging the same cannot be treated as Second Appeals.
7. If the arguments of learned Counsel for the Appellants are to be accepted, there can be two types of Appeals one against final disposal of the Appellate Tribunal, which will come to this Court having assignment of Second Appeal.
8. Second if the provision of Section 100 of Code of Civil Procedure relating to Second Appeal from decree is not applicable to such appeals under Section 58 and only ground specified namely existence of substantial question of law under Section 100 of CPC is applicable, in that case, it is Appeal against Order and it will not be before this Bench.
9. Since, it is certain that these Appeals cannot be treated as Second Appeals, I refrain from expressing any opinion whether Appeals are maintainable or not as Appeal from Order. I hold that these Appeals are not maintainable before this Court as Second Appeals. As these appeals are not maintainable before this Court, the Appeals be removed from board.
10. Registry to take steps to place them before the appropriate Bench.”
6. Nirman Realtors was cited before the learned Single Judge, GS Kulkarni J, in the Man Global Writ Petitions. There, disputes between the parties arose under an agreement for sale / purchase of flats. Man Global is the developer. Joukani is the flat purchaser. The subject flat purchase agreements were executed around December
2015. Disputes arose as to whether the Petitioner had completed the project in accordance with the Agreement for Sale. Joukani filed complaints under RERA. On that, the first authority in RERA passed an order on 24th September 2018 directing Man Global Ltd to pay Man Global simple interest at 10.5% pa on the amount referred to in that order. The amount itself is substantial — Rs 5.14 Crores — and interest was to run from 1st July 2016 until possession was delivered. There was also a direction for refund of an amount Rs 61,73,878/-. This was about a complaint by Joukani that the developer had charged him or included in the flat purchase price an area of 118 sq ft which was really a common area (a lift- lobby). Finally, there was an award of costs of Rs 20,000/-.
7. Man Global for its part raised a counter-dispute about an adjustment but we are presently not concerned with that. Man Global filed appeals under Section 43 of the RERA before the Appellate Tribunal. On 18th March 2021, the Appellate Tribunal passed a common order. Paragraphs 9 to 12 of that RERA Appellate Authority order read as follows: “9] Perused material placed on record. Prima facie, it appears that appellant would be entitled to adjust the amount of Rs.1,28,50,000/- towards dues to be recovered from each of the allottees on handing over possession of respective flats. Admittedly possession has not been delivered so far and therefore, in our view sum of Rs.1,28,50,000/- cannot be unilaterally adjusted by appellant. Respondents emphatically denied having allowed such adjustment. 10] In the above premise we find that there is no escape at this stage to appellant from depositing amount as required prior to entertaining the appeals as compliance to Proviso to Section 43(5) of the Act is mandatory. Consequently prayer clause (b) in stay applications being unacceptable, meritless and against the record stands rejected. 11] Appellant to deposit 60% of the amount as directed vide order dated 16.12.2009 in Appeal Nos.AT0060000000 21398 and AT006000000021399, within two weeks failing which appropriate orders in accordance with law to follow. 12] Stand over to 01.04.2021.”
8. Against this Appellate Order, Man Global filed the Writ Petitions referred to above (Writ Petition No. 5893 of 2021 and Writ Petition No. 5894 of 2021).
9. Before Kulkarni J, Mr Dave for Joukani raised a preliminary objection to maintainability of the writ petitions. This objection was Man Global’s appropriate, alternative, and equally efficacious remedy was to file an appeal before this Court under Section 58 of RERA.
10. Man Global opposed the submission on maintainability. It relied on the decision in Nirman Realtors to contend that a second appeal to the High Court under Section 58 had been held not to be maintainable. An appeal would lie only against ‘a final order’ passed by the Appellate Tribunal.
11. This was thus the question before Kulkarni J in these two Writ Petitions, i.e., whether Man Global had to file a second appeal under Section 58 of RERA to the High Court or whether the Writ Petitions were maintainable.
12. Kulkarni J took the view that Nirman Realtors was wrongly decided in that it held that the second appeal would lie only against ‘a final’ order of the RERA Appellate Authority. Kulkarni J held inter alia that Section 58 allowed an appeal against ‘any decision or order’ by the Appellate Tribunal. The word ‘final’ did not appear in the statute. All that Section 58(1) said was that the grounds of a second appeal would be akin or analogous to those under Section 100 of the Code of Civil Procedure 1908 (“CPC”).
13. Section 100 of the CPC reads: “100. Second appeal: (1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law. (2) An appeal may lie under this section from an appellate decree passed ex parte. (3) In an appeal under this section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal. (4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (5) The appeal shall be heard on the question so formulated and the respondent shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question: Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law, not formulated by it, if it is satisfied that the case involves such question.”
14. Kulkarni J drew a parallel to other statutes such as the Income Tax Act 1961 which similarly provided for further appeals to the High Court but limited the grounds on which such appeals could be filed. We find this observation in paragraph 9 of Kulkarni J’s order.
15. Consequently, Kulkarni J took the view that Nirman Realtors does not lay down the correct position in law. Hence, this reference.
16. On a closer reading, it appears to us that the observations and findings in Nirman Realtors cannot be sustained, and the view Kulkarni J is not only the correct one, but the only view that can be taken. Paragraph 5 of the Nirman Realtors judgment proceeds on the footing that since the first appeals were pending and had not been disposed of, no second appeal would lie. Reference was made to the proviso to Section 43(5), but in our view, this does not carry the matter further. What the Nirman Realtors judgment really did was to impute or insert the word ‘final’ into Section 58 of the RERA Act between the words ‘any’ and ‘decision’. In the Nirman Realtors formulation, Section 58(1) would read like this: “58. Appeal to High Court: (1) Any person aggrieved by any FINAL decision or order of the Appellate Tribunal, may file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908: The word ‘final’ would thus have to be inserted — or read as inserted — into the section. We find no warrant or authority for this method of interpretation of any statute. Where the words of a statute are clear, plain and unambiguous, and capable of receiving only one meaning, courts are bound to give effect to that mean irrespective of the consequences. In that situation, no question of ‘construction of a statute’ arises; the Act speaks for itself: United India Insurance Company Ltd v Orient Treasures Pvt Ltd.[2]
17. It may be necessary to understand at this stage the conspectus of Section 100 of the CPC as it is applied by reference in other statutes. In a civil suit, a first appeal from a final order is a matter of right. That first appeal is a substantive appeal on both facts and law. When the CPC provides for a first appeal, this literally means that every litigant in a civil proceeding has a right to have a final decision or judgment of a trial court tested once. But a second appeal is considerably constrained under the CPC. Here, a party aggrieved by a decision in the first appeal cannot as a matter of right file a fullspectrum second appeal, i.e., again call into question both facts and law. Section 100 and, in particular, the concluding words of subsection (1) (“if the High Court is satisfied that the case involves a substantial question of law”) and the wording of Sub-section (3) (“In an appeal under this section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal”) make it abundantly clear that a second appeal in a civil proceeding controlled by the CPC lies only on a ‘substantial question of law’. That ‘substantial question of law’ must be stated specifically in the memorandum of appeal. It does not end there. Sub-section (4) then requires a threshold satisfaction by the High Court that a substantial question of law is indeed involved and then requires the High Court to ‘formulate’ that question. If there is any doubt about what this means, it is put to rest by sub-section (5) which then says that the appeal is to be heard on the question ‘so formulated’. The respondent in a second appeal is allowed to argue that no such question of law arises in the second appeal. There is of course power in the Court under the proviso to sub-section (5) to formulate an additional question of law. should it arise.
18. There are two factors at play here. First, there is an abridgement of a substantive right of appeal in a second appeal. This is clear from the phrasing of Section 100. Second, the manner in which that right is curtailed is by the requirement of first posing the question of law and then formulating it.
19. This does not necessarily mean that another statute that references Section 100 necessarily limits itself to final orders under that other statute even though under the CPC, a second appeal can be filed only against a final first appellate order or decree and not otherwise. It is entirely permissible for a referencing statute to limit the grounds of the appeal to substantial questions of law without necessarily — or even by necessary implication — requiring that the appeal be only against a final order. Such an appeal, on substantial questions of law, may perfectly legitimately be permitted by another referencing statute against any order or decision.
20. Kulkarni J held precisely this. He noted that Section 58 does not speak of a final decision or order of the RERA Appellate Tribunal. It plainly says ‘any decision or order’. Obviously, the legislature must be presumed to have known of the provisions of Section 100 of the CPC when it framed Section 58 of the RERA Act. Had the intention been to restrict Section 58 appeals to final orders of the Appellate Authority or final decisions of that authority, Section 58 would have said so. Instead, the Section speaks more broadly and possibly with the widest amplitude of ‘any decision or order’. But what Section 58 then does is to constrain or limit the grounds on which such a second appeal may be filed. This leads to the position that while a second appeal can be filed against any order, not necessarily a final order, of the RERA Appellate Tribunal, it is to be guided by the restrictive provisions of Section 100, that is to say, such an appeal must involve substantial questions of law that are identified, formulated and then taken up for decision. It is difficult to find support for the proposition in Nirman Realtors that merely because a first appeal is pending, no appeal will lie to the High Court. As we have noted above, the interpretation placed by Kulkarni J is the correct interpretation and must be sustained.
21. We are fortified in this view by the Supreme Court decision on which Mr Dave relies, Raj Kumar Shivhare v Assistant Director, Directorate of Enforcement and Anr.[3] In paragraphs 16 to 18, considering Section 35 of the Foreign Exchange Management Act, 1999, the Supreme Court held: “16. The statutory scheme under Section 34 of FEMA is to exclude the jurisdiction of the civil court in express terms. Section 35, which calls for interpretation in this case, runs as follows:
“35. Appeal to High Court.—Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. Explanation.—In this section ‘High Court’ means— (a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and (b) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.”
17. A reading of Section 35 makes it clear that jurisdiction has been clearly conferred on the High Court to entertain an appeal within 60 days from “any decision or order of the appellate authority”. But such appeal has to be on a question of law. The proviso empowers the High Court to entertain such an appeal after 60 days provided the High Court is satisfied that the appellant was prevented by sufficient cause from appealing earlier.
18. The argument that under Section 35 only appeals from final order can be filed has been advanced on a misconception of the clear provision of the section itself. The section clearly says that from “any decision or order” of the Appellate Tribunal, appeal can be filed to the High Court on a question of law.”
22. The reference is answered accordingly. Liberty to the parties to have the matter listed before the learned Single Judge.
23. We are of course not deciding the objection as to maintainability advanced by Mr Dave. In view of this answer to the reference, it is open to Mr Dave to take the objection and the decision is left to the learned Single Judge on the facts and circumstances of the case before that Bench.
24. We are also not required to answer the question of whether a writ lies against a pre-deposit order. All contentions in that behalf before the learned Single Judge are expressly kept open.
25. The previous interim order will continue for a period of three weeks to enable parties to apply to the learned Single Judge for listing and, if possible, for an expedited hearing. (Neela Gokhale, J) (G. S. Patel, J) Note: This judgment is modified by an order dated 27th March 2023 passed on a praecipe. Corrections are shown in bold and italics.