Attractive Nirman Private Ltd. Thru. Its Manager Romesh Bajpai v. Prashant Singh and 2 Others

Allahabad HC14 Aug 2024RERA/67/2024

Case brief

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What is this about?

The High Court (Allahabad) admitted an appeal challenging the Uttar Pradesh Real Estate Appellate Tribunal's order under the RERA Act. The appellant, a developer not receiving funds from the specific allottee, contended it is not a 'promoter' liable for Section 43(5) pre-deposit. The appeal raises questions on promoter definition and pre-deposit applicability, and proceedings are stayed while plea

What the court decided

AI extract

Attractive Nirman Private Ltd. Thru. Its… — Pension and Retirement Benefits | Allahabad HC (2024)

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Court No. - 19

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Case :- RERA APPEAL No. - 67 of 2024

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Appellant :- Attractive Nirman Private Ltd. Thru. Its Manager Romesh Bajpai

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Respondent :- Prashant Singh And 2 Others Counsel for Appellant :- Sudeep Kumar

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Counsel for Respondent :- Shobhit Mohan Shukla

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Hon'ble Manish Kumar,J.

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Heard Shri Sudeep Kumar, learned counsel for the appellant and learned counsel for the respondent.

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Learned Counsel for the appellant has submitted that a complaint was made by respondent no. 1-Prashant Singh against the respondent no. 2-Aftek Developers Private Limited under Section 31 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as, the Act, 2016) in which subsequently, the appellant has wrongly been impleaded as opposite party.

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It is further submitted that the respondent no. 1 has booked an Unit No. 1101 in the Aftek Greens, Block C, Naubasta Kala, Lucknow, which is the project of respondent no. 2 on 23.03.2014. The appellant has purchased the said land by a registered sale deed on 20.12.2017 and launched a project namely B.C.C. Green on 11.04.2018.

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After launching of the project, the appellant came to know that certain persons deposited the money with respondent no. 2 for allotment of units hence an advertisement was published by the appellant inviting the allottees to submit their claims. The respondent no. 1 in pursuance of the said notice had not appeared or turned up.

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It is further submitted that in the complaint case after the impleadment, an objection was preferred on behalf of the

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appellant stating therein the respondent no. 1 is an allottee under the ongoing project, which was registered with the R.E.R.A. in the year 2016 as an ongoing project whereas the appellant has been registered with R.E.R.A. in the year 2018 as a new project as per Section 3 of the Act, 2016.

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It is further submitted that the appellant had not received any money from the respondent no. 1 hence it does not fall under the definition of the promoter, who is supposed to pre-deposit at least 30% of the penalty. The appellant is a person aggrieved as per Section 43 (5) of the Act, 2016 and proviso is not applicable on the appellant. The said submission of the appellant was not considered by the U.P. Real Estate Regulatory Authority, Lucknow hence an appeal was also preferred before the U.P. Real Estate Appellate Tribunal, which has also been rejected turning down the claim by placing reliance upon the judgment of Hon'ble Supreme Court in the case of M/s Newtech Promoters and Developers Pvt. Limited Vs. State of U.P and others reported in (2021) 18 SCC 1 ignoring completely that the said judgment is not applicable in the case of the appellant as the Hon'ble Supreme Court has framed the following question, which is being reproduced hereinbelow :-

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" Question 4 : Whether the condition of pre-deposit under proviso to Section 43(5) of the Act for entertaining substantive right of appeal is sustainable in law?

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120. Before we examine the challenge to the proviso to Section 43(5) of the Act of making pre-deposit for entertaining an appeal before the Tribunal, it may be apposite to take note of Section 43(5) of the Act, 2016. Section 43(5) reads as follows:

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" 43. Establishment of Real Estate Appellate Tribunal .

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(5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:

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Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the

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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 Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard.

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

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The aforesaid question has been replied in para no. 136 of the said judgment, which is being reproduced hereunder:-

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" 136. In our considered view, the obligation cast upon the promoter of pre-deposit under Section 43(5) of the Act, being a class in itself, and the promoters who are in receipt of money which is being claimed by the homebuyers/allottees for refund and determined in the first place by the competent authority, if legislature in its wisdom intended to ensure that money once determined by the Authority be saved if appeal is to be preferred at the instance of the promoter after due compliance of pre-deposit as envisaged under Section 43(5) of the Act, in no circumstance can be said to be onerous as prayed for or in violation of Article 14 or Article 19(1)(g) of the Constitution of India."

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While answering the aforequoted question, the Hon'ble Supreme Court has held that the person who had received the money would fall within the definition of the promoter and it is an undisputed fact that the appellant had not received any money from the respondent no. 1.

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It is further submitted that after the impugned judgment, the recovery certificate has been issued on 02.02.2024 against the appellant.

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The present appeal is admitted on the following substantial questions of law:-

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A. Whether the Uttar Pradesh Real Estate Appellate Tribunal was justified in considering the Appellant as "Promoter" for the project wherein the Unit/Flat was allotted to the respondent no. 1 without examining the provisions contained in Uttar Pradesh

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Real Estate (Regulation and Development) Act, 2016, irrespective of the fact that the registration of the Appellant was for "New Project" and not for 'Ongoing' Project', where in Unit/Flat was allotted to the respondent no. 1?

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B. Whether for the purpose of applicability of sub-section 5 of Section 43 of Uttar Pradesh Real Estate (Regulation and Development) Act, 2016 regarding pre-deposit, the appellant comes within the ambit of first part of sub-section 5 of Section 43 or to the proviso appended to sub-section 5 of Section 43 of Uttar Pradesh Real Estate (Regulation and Development) Act, 2016?

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Issue notice to the respondent nos. 1 and 2.

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Learned Counsel for the appellant prays for and is granted ten days' time to take steps.

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List this case in the week commencing 23.09.2024, as fresh.

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In the meantime, the parties may exchange the pleadings.

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Office is directed to submit the service report by the next date of listing.

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Till the next date of listing, the recovery proceedings initiated against the petitioner shall remain stayed.

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Order Date :- 14.8.2024 Ashish

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Digitally signed by :- ASHISH MISHRA High Court of Judicature at Allahabad, Lucknow Bench

Attractive Nirman Private Ltd. Thru. Its Manager Romesh Bajpai v. Prashant Singh and 2 Others

Case brief

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Attractive Nirman Private Ltd. Thru. Its Manager Romesh Bajpai v. Prashant Singh and 2 Others

Case brief

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