Marvel Sigma Homes Pvt. Ltd. v. State of Maharashtra

5.10 By an order dated 22nd March, 2019 the Appellate Tribunal returned the said Application to the Petitioner and directed the Petitioner to present the execution (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 10/37 application before RERA. By the aforesaid order, the Appellate Tribunal held that as the said Appeal filed by Respondent No.4 challenging the said order dated 1st March, 2018 was not entertained or heard, as Respondent No.4 failed to comply with the mandatory requirement of deposit under Section 43(5) of the RERA Act, RERA would be the court of first instance and not the Appellate Tribunal, which passed the order or decree and therefore, would also be the proper forum to execute the same. It further held that as RERA was the proper authority to execute the said order, the execution proceedings were not maintainable under Section 57 of the RERA Act, as the said Section only deals with execution of order by Appellate Tribunal.

5.11 Pursuant thereto, the Petitioner presented its execution application before RERA. RERA on 12th April, 2019 allowed the execution application and issued the Recovery Certificate against Respondent No.4. A copy of the Recovery Certificate was not provided to the Petitioner.

5.12 On 15th April, 2019 RERA vide its letter, forwarded the said Recovery Certificate to the Collector and directed the Collector to execute the said Recovery Certificate against Respondent No.4 and recover the decretal amount as arrears of land revenue, as per procedure prescribed under the Maharashtra Land Revenue Code, 1966. A copy of this direction was also not provided to the Petitioner.

5.13 Thereafter, the Collector vide its letter / direction dated 4th June, 2019, directed the Tahsildar to execute the Recovery Certificate and recover the said (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 11/37 decretal amount from Respondent No.4 as arrears of land revenue and deposit the same with the Petitioner directly. A copy of this letter was served on the Petitioner and the same referred to the said direction dated 15th April, 2019 and the Recovery Certificate.

5.14 However, despite the aforesaid direction dated 4th June, 2019, the Tahsildar failed to execute the said Recovery Certificate.

5.15 In view of the above, the Petitioner by its letter dated 3rd October, 2019 requested the Tahsildar to comply with the direction dated 15th April, 2019 passed by RERA. However, the Collector and Tahsildar did not execute the Recovery Certificate.

5.16 In view thereof, in March, 2020 the Petitioner filed Writ Petition (L) No.3221 of 2020.

V. ISSUES FOR CONSIDERATION:

6. In order to decide the Interim Application and the second Writ Petition No.2657 of 2020, the following issues will have to be considered: 6.[1] Whether the initiation of insolvency proceedings by the Petitioner against the Respondent No.4 before the NCLT disentitles the Petitioner from filing Writ Petition (L) No.3221 of 2020 ? 6.[2] Whether the said Order dated 1st March, 2018 directing return of the consideration amount with interest is required to be executed or enforced under (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 12/37 Section 40(1) of RERA Act read with Rule 3 as arrears of land revenue OR under Section 40(2) of the RERA Act read with Rule 4 of the RERA Rules as a decree of a civil Court ? 6.[3] Whether every order passed by the Appellate Tribunal is required to be executed under Section 57 of the RERA Act ? 6.[4] Whether Writ Petition (L) No.3221 of 2020 is liable to be dismissed because of failure to annex the Recovery Certificate ?

SUBMISSIONS OF THE PARTIES:

ISSUE 1 AS SET OUT IN PARAGRAPH 6.1:

7. Shri Amit Gharte, learned Advocate for Respondent No.4 submitted that the Petitioner has filed Company Petition No.4599 of 2018 before the NCLT seeking execution of the said order. As the Petitioner has already approached the NCLT for execution of the said Order, the Petitioner cannot seek compliance/execution of the same order again by filing Writ Petition (L) No.3221 of 2020 and therefore, the said Writ Petition is not maintainable and ought to be dismissed. 7.[1] Shri Sharan Jagtiani, learned Senior Advocate appearing on behalf of the Petitioner submitted that the Petitioner had filed the said Complaint under Sections, 12, 14, 18 and 19 of the RERA Act against Respondent No.4 inter alia seeking refund of its amount, interest and compensation. Thus, the said proceeding initiated by the Petitioner was a proceeding in personam. Further, the Recovery Certificate issued (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 13/37 pursuant thereto is equivalent to a money decree and is enforceable against the Respondent in personam, under the RERA Act. Whereas, the insolvency proceeding initiated by the Petitioner against Respondent No.4 are proceeding in rem to enforce a statutory right claimed as a financial creditor being a home buyer. He submitted that this insolvency proceeding initiated by the Petitioner is neither a suit for recovery nor a proceeding for seeking execution of the Recovery Certificate as contended by Respondent No.4. It was submitted that the scope of enquiry and the reliefs claimed and allowed under execution proceedings and insolvency proceedings are entirely different, distinct and independent of each other and have no connection whatsoever. 7.[2] In support of his aforesaid contention, Shri Jagtiani relies upon the judgment of this Court in Viral Filaments Ltd., Mumbai V/s. Indusind Bank Ltd. Mumbai[1]. The Petitioner, in its Written Submissions has also placed reliance upon a judgment of the National Company Law Appellate Tribunal (“NCLAT”) in Annapurna Infrastructure Pvt. Ltd. and Anr. V/s. Soril Infra Resources Ltd.[2] ISSUE NO.2

AS SET OUT IN PARAGRAPH 6(b):

8. Shri Gharte, the learned Advocate appearing for Respondent No.4 submitted that RERA has wrongly issued the Recovery Certificate and directed the Collector to recover the decretal amount as arrears of land revenue under Section 40(1) of the Act. He submitted that the said order has to be executed under Section 1 2001 (3) Mh.L.J. - paras 5, 8 2 2017 SCC Online NCLAT 380 – paras 6, 16, 17, 26, 30, 33, 34 (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 14/37 40(2) of RERA Act and in the manner as prescribed under Rule 4 of the RERA Rules. He submitted that as per Section 40(2) read with Rule 4, every order passed by the Adjudicating Officer, Regulatory Authority and the Appellate Tribunal is required to be executed as if it were a decree or order made by the principal civil Court of original jurisdiction and not arrears of land revenue. Therefore, he submits that RERA has erred in issuing the said Recovery Certificate and Petitioner cannot seek compliance of the same. 8.[1] Shri Gharte representing Respondent No.4 further submitted that Section 40(1) of the Act read with Rule 3 of the RERA Rules does not apply to orders directing return of the amount paid by an allottee with interest. Those provisions, according to him, apply only to grant of compensation, which is different from return of the amount paid. He relied upon the provisions of Section 18 of the Act to contend that they are dealt with separately. Therefore, it was contended that the order of the Adjudicating Officer can only fall under Section 40(2) of the Act read with Rule 4 of the RERA Rules. 8.[2] Shri Jagtiani on behalf of the Petitioner submitted that the aforesaid ground is based on an incorrect interpretation of the various provisions of the RERA Act. Mr. Jagtiani drew our attention to the Preamble to the RERA Act. He submitted that from the preface to the RERA Act, it can be seen that the main object of the RERA Act is inter alia to protect the interests of the consumer in the real estate sector, ensure (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 15/37 accountability, infuse transparency and establish adjudicating mechanism for speedy dispute redressal. 8.[3] Shri Jagtiani submits that under Section 18 of the RERA Act, even a monetary claim for return of the amount of consideration paid with interest is to be understood as compensation within the meaning of both Section 18 and Section 40(1) of the Act. 8.[4] Shri Jagtiani submitted that from a reading of the various provisions together, it is relevant to note that all the monies payable under Sections 12, 14, 18 and 19 i.e. towards return of amount, interest, compensation, etc., have all been referred to as “compensation” under Section 71 of the RERA Act. Thus, the term “compensation” under Section 71 would cover under its gamut any form of monetary reliefs payable under Sections 12, 14, 18 and 19. 8.[5] Shri Jagtiani submitted that all forms of monetary relief under the Sections referred to in Section 40(1) are therefore, recoverable as arrears in land revenue and return of amounts paid with interest cannot be kept out of the purview of Section 40(1) of the Act. 8.[6] Shri Jagtiani submitted that an allottee is entitled to return of the amounts under Section 18 of the Act and this amount is adjudicated under Section 71 of the RERA Act and that ‘return of amount’ with or without interest is a remedy to the allottee for the developers breach and is a form or specie of “compensation” because (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 16/37 in law, it is in this manner by which actual loss to the allottee is quantified. Although the term ‘return of amount’ is not specifically mentioned in section 40 (1), from a conjoint reading and harmonious construction of Sections 18, 71, 40 (1) of the RERA Act and Rule 3 of the RERA Rules it is clear that any monetary sum payable either towards return of money to allottee, interest, penalty, compensation shall be covered under Section 40 (1) of the Act and has to be recovered in the manner prescribed therein i.e. as arrears of land revenue. He further submitted that the aforesaid interpretation would be just and sound as there is no conceivable reason why an award of compensation being unliquidated damages for delay would be allowed to be recovered under Section 40 (1) and an award for return of amount, which is the money actually paid by the allottee to the promoter would not be covered under Section 40 (1) of the Act. 8.[7] Shri Jagtiani submitted that while Section 40 (1) of the RERA Act deals with recovery of compensation, interest and penalty being monetary reliefs, Section 40(2) of the RERA Act on the other hand deals with enforcement of “any order” issued by the Adjudicating Officer, Regulatory Authority or the Appellate Tribunal directing any person to do or refrain from doing any act. Such orders may include orders by RERA directing promoter to deliver possession or any other order as contemplated under section 34 of the Act. In fact, Section 40(2) does not even use the term compensation and the term “any orders” is missing in Section 40(1) of the RERA Act. (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 17/37 8.[8] Shri Jagtiani drew our attention to the facts of the present case and submitted that the said Complaint was filed by the Petitioner before RERA under Sections 12, 14, 18 and 19 of the RERA Act against Respondent No. 4 interalia for return of the consideration amount and compensation for delay in handing over possession of the said premises by Respondent No. 4. Thus, the Petitioner had only sought monetary reliefs in the said Complaint. By the said Order, the said Complaint of the Petitioner was allowed by the Adjudicating Officer and Respondent No. 4 was directed to pay a total sum of Rs. 14,05,57,705.46/- to the Petitioner with interest at 10.05% within 30 days, being the amount towards return of the consideration amount to the Petitioner with interest and compensation. As Respondent No. 4 failed to comply with the order of return of money, interest and compensation granted by the Adjudicating Officer the said Recovery certificate was issued by RERA under Section 40(1) of the RERA Act, as the reliefs of which compliance was sought was only monetary in nature. He drew our attention to Clause 3 of the Recovery Certificate which mentioned that the said Recovery Certificate was issued under Section 40(1) of the RERA Act read with Rule 3 of the RERA Rules. 8.[9] Shri Jagtiani therefore submitted that the Recovery Certificate has correctly been issued under Section 40(1) of the RERA Act read with Rule 3 of the RERA Rules and the decreetal amount has rightly been directed to be recovered as arrears of land revenue. (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 18/37 ISSUE NO. 3 AS SET OUT IN PARAGRAPH 6(c):

9. Shri Gharte for Respondent No. 4 submitted that the said Order is required to be executed under Section 57 of the RERA Act read with Section 40 (2) of the RERA Act. He submits that as per Section 57 of RERA Act, every order of the Appellate Tribunal is executable by the Appellate Tribunal as a decree of civil court and therefore RERA could not have issued the said Recovery Certificate for recovering the decreetal amount as arrears of land revenue. 9.[1] Shri Jagtiani submitted that from a bare perusal of Section 57 of the RERA Act it is clear that it deals with orders or decrees passed by the Appellate Tribunal. Thus, under this section, the Appellate Tribunal is only empowered to execute orders passed or decrees made by it. Therefore, no orders passed by the Adjudicating Officer can be governed by this section. He further submitted that Section 40(1) of the RERA Act categorically states that any interest or penalty or compensation inter alia imposed by the Appellate Authority shall be recovered as arrears of land revenue. Thus, according to Shri Jagtiani, the inclusion of the terms “Appellate Authority” in Section 40 (1) of the Act clearly shows that the intention of the legislature was not to subject all orders passed by the Appellate Tribunal to enforcement under Section 57. 9.[2] Shri Jagtiani without prejudice to his aforesaid argument, submitted that Section 57 deals with execution of “any order” passed by the Appellate Tribunal and whereas Section 40(1) of the said Act specifically deals with penalty, interest, (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 19/37 compensation imposed by the Adjudicating Officer, Regulatory Authority or Appellate Tribunal. Further, Section 40(2) deals with “any order” issued by RERA directing any person to do any act or to refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder. Thus, the phrase “any order” is consciously and conspicuously missing in Section 40(1) but is provided in 9.[3] Shri Jagtiani also submitted that in the present case the said Order and decree have been passed by the Adjudicating Officer. Although, the said Appeal was filed by Respondent No.4 challenging the said Order, the same was not entertained and dismissed as the Respondent No.4 failed to comply with the mandatory requirement of Section 43(5) of deposit of at least 30% of the decreetal amount for filing such Appeal. In view thereof, the said Order and decree passed by the Adjudicating Officer remained unaltered and the Court that passed such decree remains to be the Adjudicating Officer. Thus, as the said Order of which execution has been sought is not an order passed by the Appellate Tribunal, Section 57 is completely inapplicable in the present case. 9.[4] Shri Jagtiani also submitted that the Petitioner due to a misconceived understanding of Section 57, had filed an execution application before the Adjudicating Officer, as more particularly set out hereinabove which was later transferred to the Appellate Tribunal. The Appellate Tribunal by its order dated 22nd (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 20/37 March, 2019 returned the said application with a direction to file the execution application before RERA. By the said Order dated 22nd March, 2019, the Appellate Tribunal has considered the aforesaid ground and rightly held that as the decree was passed by the Adjudicating Officer and remained unaltered by the Appellate Tribunal, Section 57 would not be applicable as the same is not for execution of an order or decree passed by an Appellate Tribunal. It was on the basis of this order that the Petitioner had approached RERA for execution of the said Order and pursuant thereto, the RERA allowed the execution application and issued Recovery Certificate under Section 40(1) of the RERA Act read with Rule 3 of the RERA Rules. He submitted that the findings arrived at by the Appellate Tribunal have not been challenged by any party and the same have attained finality. Respondent No.4 therefore cannot raise the same ground, which has already been considered by the Appellate Tribunal and therefore seek dismissal of the present Writ Petition.

ISSUE NO.4 – AS SET OUT IN PARAGRAPH 6(d):

10. Shri Gharte for Respondent No.4, submitted that Writ Petition (L) NO. 3221 of 2020 is liable to be dismissed because the Recovery Certificate of which enforcement is sought is not annexed to the Petition. 10.[1] In response, Shri Jagtiani submitted that this is because the Recovery Certificate was issued by RERA and sent directly to the Collector for enforcement or recovery under Section 40(1) of the Act and Rule 3 of the RERA Rules, without any (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 21/37 copy being sent to the Petitioner. The Petitioner learnt of it only from subsequent correspondence with the Collector that has been referred to above and could therefore refer to it specifically in the prayers. In any event the Recovery Certificate and the communication by which it was sent to the Collector has been placed on record in the Affidavit in Reply filed by Respondent Nos.[2] and 3.

FINDINGS AND CONCLUSION:

ISSUE NO.1 – EFFECT OF NCLT PROCEEDINGS

11. Having considered the submissions of the parties, we are of the view that the filing of an Application by the Petitioner under Section 7 of the IBC, which is pending adjudication, does not in any way affect the maintainability of Writ Petition

(L) No. 3221 of 2020. This objection as raised by Respondent No.4 is misconceived as it fails to take into consideration the nature of proceedings initiated by the Petitioner before the RERA Authorities/Adjudicating Officer and the Application under Section 7 of the IBC. 11.[2] The former is an action to recover the monies or amounts paid towards purchase of the subject apartment with interest. It is on account of Respondent No.4’s breach of that contract in relation to the sale and delivery of possession of the subject flat within a stipulated time that the Petitioner filed proceedings under the statutory remedy provided under the RERA Act to make this monetary claim. The Recovery Certificate that came to be issued pursuant to the said Order of the Adjudicating Officer in favour of the Petitioner is akin to money decree or a direction (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 22/37 to Respondent No.4 to pay the said amount to the Petitioner. The entire action is one that is in personam albeit under the statutory framework of the RERA Act. 11.[3] As observed above Writ Petition (L) No. 3221 of 2020 has been filed as a consequence of the authorities under the Maharashtra Land Revenue Code failing to discharge their statutory duties in enforcement of the Recovery Certificate. 11.[4] In contrast, the Application by the Petitioner before the NCLT under Section 7 of the IBC is not a recovery proceeding. The nature of the proceeding is in rem and it seeks the initiation of a corporate insolvency resolution process against Respondent No.4 on the basis that there is a default in paying a financial debt due to a financial creditor. It is clear to us that recourse to Section 7 of the IBC is by no means a substitute to recovery proceedings seeking monetary reliefs under provisions of the RERA Act. This distinction between proceedings seeking winding up of a company under the Companies Act, 1956 (the precursor to Section 7 and Section 9 of the IBC) and recovery proceedings, is settled law and noted in various judgments. 11.[5] In Viral Filaments Ltd. Mumbai (Supra), it was held that a Petition presented under Section 433(e) of the Companies Act, 1956 for winding up of a Company is not equivalent to an application seeking recovery of debt due to the petitioning creditor. Further it was also held that Section 433 of the Companies Act, 1956 is not intended to supplant the jurisdiction of a Civil Court to adjudicate a money suit. (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 23/37 11.[6] It is also relevant to consider the NCLAT’s view in this regard in the case of Annapurna Infrastructure Pvt. Ltd. and Anr. (Supra). The NCLAT was dealing with an issue whether pendency of proceedings for execution of an award or judgment and decree, bar a creditor to prefer any petition under the IBC. The NCLAT while answering the said question in the negative held as under:

11.[7] Both these judgments support our conclusion on the first issue. For the (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 24/37 reasons stated above we are of the opinion that the filing of a Section 7 Application under the IBC by the Petitioner does not affect its rights to seek monetary reliefs under the RERA Act and under this Writ Petition which is filed in view of the alleged failure of the authorities to take effective steps for recovery of the amount directed to be paid to the Petitioner. We would therefore answer Issue No.1 in the negative.

ISSUE NO.2 – APPLICABILITY OF SECTION 40(1) OR SECTION 40(2) OF THE RERA ACT

12. The main question that arises for consideration is: whether the said Order of the Adjudicating Officer directing return of the amount paid with interest is a direction to pay ‘compensation’ or a monetary claim of ‘compensation’ as understood by Section 40(1) of the Act ? 12.[1] Before considering the relevant statutory provisions and the relevant rules, it is necessary to note a few important and admitted facts. The Complaint under which the said Order came to be passed was filed, inter alia, under Section 18 of the Act. It was filed before the Adjudicating Officer. The powers of the Adjudicating Officer are set out in Section 71 of the Act. The prayer in the Complaint seeks return of the amount paid with interest including compensation. The Recovery Certificate as sent by the RERA Authorities for enforcement under the provisions of the Maharashtra Land Revenue Code, expressly states that it is issued under Section 40(1) of the Act read with Rule 3 of the Rules. It is important to note these facts though (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 25/37 they do not have a direct bearing on the question of interpretation of Section 40(1) and Section 40(2) of the Act. 12.[2] The relevant provisions that require to be considered are set out as below: Section 18 of the Act states as under: “18. Return of amount and compensation: (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,-- (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. (2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 26/37 this Act, and the claim for compensation under this subsection shall not be barred by limitation provided under any law for the time being in force. (3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.” Section 71 of the RERA Act states as under:

Section 40(1) of the Act states as under:

Rule 4 of the RERA Rules states as under: (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 28/37

13. From a reading of the above provisions, our findings on the interpretation of the above provisions are set out below.

(i) Although the sub-heading to Section 18 refers to ‘return of amount and compensation’, on a reading of Section 18 by itself and in context with the other provisions, it is clear that ‘return of amount’ is a facet of ‘compensation’ under Section 18. In other words, ‘return of amount’ and ‘compensation’ are not mutually exclusive categories.

(ii) Section 18(a), which deals with the promoters failure to deliver possession in (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 29/37 accordance with the terms of the agreement is to be read with the consequence mentioned in Section 18(b), namely, ‘[the promoter] shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act’.

(iii) Significantly, return of the amount with interest is mentioned as including compensation. It is thus clear that the expression ‘compensation’ does not stand apart from return of the amount, but the monetary amount represented by return of the consideration paid with interest is an aspect of compensation within the meaning of Section 18 of the Act.

(iv) This understanding is made abundantly clear by the language of Section 71 of the Act, which deals with the appointment, power and position of the Adjudicating Officer under the Act. It begins by stating, ‘for the purpose of adjudging compensation under sections 12, 14, 18 and section 19...’. It is, therefore, clear from a contextual and harmonious reading of the provisions that all the amounts that can be awarded to be paid by the promoter or that constitute the promoters’ liability under Section 18 of the Act, are collectively and generally referred to as ‘compensation’. This is a clear indication that there is no merit whatsoever in bifurcating the amounts (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 30/37 that the promoter is liable to pay under Section 18 of the Act as ‘return of consideration’ on the one hand and ‘compensation’ on the other hand.

(v) In view of the above, we are of the clear view that the expression ‘compensation’ as used in Section 40(1) of the Act must be understood in the sense of Section 71 of the Act, namely, to include all amount that a promoter is liable to pay to an allottee, inter alia, under Section 18 of the Act or for that matter under Sections 12, 14 and 19 of the Act.

(vi) It is also clear from a reading of Section 40(1) of the Act when contrasted with Section 40(2) of the Act that the clear intention of the Legislature was to group all directions to pay or monetary reliefs granted against the promoter in one category i.e., Section 40(1) of the Act, and to treat them differently from all other orders, for the purpose of the means of enforcement or recovery. There is no valid explanation or justification for treating some forms of monetary reliefs granted to allottees differently from others, as has been suggested by Respondent No.4. The intention of the legislature, as is apparent from the Preamble of the Act, was to provide speedy and efficacious remedy to allottees against the breaches of promoters and developers. It is consistent with that objective that enforcement of the monetary directions to pay against the promoter are recoverable as arrears in land revenue. There is no conceivable reason to deprive allottees to whom the amount of consideration paid is directed to be returned with interest of this expeditious means of recovery. Such a (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 31/37 contention, if accepted, would be inconsistent with the statutory provisions as analysed above and the object and purpose of the Act.

(vii) The scope of Section 40(2) of the Act, on the other hand, pertains to orders or directions against any person to do an act or refrain from doing an act under the provisions of the RERA Act. When read in the light of Section 40(1) and the other provisions of the Act, it is apparent that Section 40(2) of the Act deals with orders or directions that are not in the nature of monetary reliefs or for recovery of amounts that are specifically provided for in Section 40(1) of the Act. There are various other orders that the Authority under Section 20 of the Act can make, such as for example delivery of possession of units or in respect of conveyance of the land to the Society or Association formed. Section 40(2) of the Act would apply in situations such as these. If the expression ‘order’ and ‘direction’ under Section 40(2) is to be understood as every order and direction including those contemplated in Section 40(1) of the Act, then Section 40(2) of the Act would render Section 40(1) of the Act redundant or otiose. It is a well settled rule of interpretation that if two provisions can be read so as to give meaning and effect to both of them, then that interpretation should be preferred to one that renders a particular provision otiose or ineffective.

(viii) As regards Rule 3 and Rule 4 of the RERA Rules, their application will follow the interpretation of the Sections of the Act, which have been considered above. There is no dispute that if the recovery is covered by Section 40(1) of the Act, Rule 3 (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 32/37 will apply; and if the order or direction is covered by Section 40(2) of the Act, the execution of such order or direction will be governed by Rule 4 of the Act. 13.[1] For the above reasons we are of the view that the Recovery Certificate resulting from the Order of the Adjudicating Officer has rightly been issued under Section 40(1) of the Act read with Rule 3 of the RERA Rules. We accordingly answer the first part of the second issue as set out in paragraph 6.[2] in the affirmative and the second part of the second issue as set out in paragraph 6.[2] in the negative.

ISSUE NO. 3 – APPLICABILITY OF SECTION 57 OF THE ACT

14. Respondent No.4 then submitted that by reason of Section 57 of the Act any order of the Appellate Tribunal is to be executed by the Appellate Tribunal as a decree of a civil court. 14.[1] It is not clear from the submission of Respondent No.4 as to how Section 57 would apply at all to the present case. The Order of the Adjudicating Officer was challenged by Respondent No.4 but that Appeal came to be dismissed as the predeposit amount was not paid. Therefore, the Order of which enforcement is being sought by the Recovery Certificate is that of the Adjudicating Officer and that is how the Recovery Certificate produced by Respondent Nos.[2] and 3 proceeds. 14.[2] The other order of direction given by the Appellate Tribunal, as set out above, was on 22nd March, 2019 by which it is directed that an application for execution of the Order of the Adjudicating Officer that was transferred to the (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 33/37 Appellate Tribunal was misconceived and that execution of the Adjudicating Officers order would have to be sought before RERA itself. As submitted by Shri Jagtiani for the Petitioner, any execution before the Appellate Tribunal was misconceived and infact the Petitioner accepted the aforesaid direction of the Appellate Tribunal. As noted above, the Application for execution was made before RERA and this resulted in the issuance of the Recovery Certificate. It is clear that this direction of the Appellate Tribunal, which is itself in a misconceived application for execution, does not attract Section 57 of the Act. 14.[3] Although Section 57 of the RERA Act is not attracted in the facts of the present case, we are nevertheless proceeding to consider its interpretation since it was argued before us. Section 57 of the Act states as under:

14.[4] In considering the scope of Section 57 of the Act, it is important to note that Section 40(1) of the Act, which we have analysed above, also encompasses (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 34/37 directions to the promoter/developer to pay penalty, interest and compensation that may be issued by the Appellate Authority. Even if one considers these directions in respect of monetary claims as ‘orders’, it is not as if all orders by the Appellate Tribunal are only covered by Section 57 of the Act. Therefore, Section 57 of the Act would have to be harmoniously interpreted with Section 40(1) of the Act. Accordingly, the directions that may be issued by the Appellate Authority under Section 40(1) of the Act or in cases where the Appellate Authority confirms in appeal a direction issued by the Adjudicating Officer or by RERA under Section 40(1) of the Act, would be recoverable as arrears of land revenue under Section 40(1) read with Rule 3 of the RERA Rules and not under Section 57 of the Act. 14.[5] There is one more reason in support of our view as stated above. It has been rightly contended by the Petitioner that Section 57 of the Act uses the expression ‘order’. That expression is used in Section 40(2) of the Act but is conspicuously absent in Section 40(1) of the Act. It is, therefore, clear that Section 57 of the Act was intended to apply to situations contemplated by Section 40(2) of the Act, as they are linked by the use of the expression ‘order’ and not to those contemplated under Section 40(1) of the Act, which does not use that expression. 14.[6] For all the above reasons we find no merit in Respondent No.4’s submissions based on Section 57 of the Act. The third issue as set out in paragraph 6.[3] is accordingly answered in the negative. (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 35/37 ISSUE NO.4 – EFFECT OF RECOVERY CERTIFICATE NOT BEING ANNEXED

15. The Petitioner has fully explained as to why it was not in a position to annex the Recovery Certificate dated 12th April, 2019 that was sent by RERA to the Collector under its letter of 15th April, 2019 for enforcement under Section 40(1) of the Act read with Rule 3. It is clear from the said letter of 15th April, 2019, that the same was not copied to the Petitioner. The Petitioner learnt of the issuance of the Recovery Certificate and the date of issue from its subsequent correspondence with Respondent No.2, which is annexed to the Writ Petition (L) No. 3221 of 2020. Therefore, based on this the Petitioner was able to specifically refer to the Recovery Certificate in the prayers in the Writ Petition though it did not have a copy of it.

16. In any event, the Recovery Certificate and the first communication by which it was sent to the Collector/Respondent No.2 has been produced before us in the Affidavit in Reply filed by Respondent Nos.[2] and 3. Since the filing of that Affidavit that document has been before the Court. Respondent No.4 has had the benefit of considering it. For all the above reasons, we answer the fourth issue as set out in paragraph 8(d) in the negative. CONCLUSION:

17. For the reasons set out hereinabove, we find no merit in any of the objections to the maintainability of Writ Petition (L) No.3221 of 2020 raised in the (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 36/37 Interim Application or in any of the grounds of challenge raised in Writ Petition NO. 2657 of 2020. Both of them are accordingly dismissed. The hearing of Writ Petition

(L) No. 3221 of 2020, including the application for interim reliefs, will accordingly proceed. ( VINAY JOSHI, J. ) ( S.J.KATHAWALLA, J.) (Corrected/modified Judgment as per Speaking to the Minutes order dt. 12/03/2021) 37/37