Dismissed

Satyam Developers Thr. Mr. Roshanlal C. Agarwal v. Sama Mohmad Sharif Dalvi and Anr.

Bombay HC25 Aug 2023SA/275/2023

Case brief

AI extract

What is this about?

In this second appeal challenging orders of the Maharashtra Real Estate Appellate Tribunal and Regulatory Authority under the RERA Act, the High Court dismissed the appellant promoter's appeal. The court held that the entitlement to interest is unqualified regardless of project delays and rejected the abandonment of termination issue by the appellant.

What did the court decide?

Appeal dismissed with a cost of Rs.50,000/- payable to the Kirtikar Law Library, Bombay High Court.

Satyam Developers Thr. Mr. Roshanlal C. Agarwal Vs Sama… — Company and Corporate | Bombay HC (2023)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

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SECOND APPEAL NO. 275 OF 2023

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Satyam Developers
Thr. Mr. Roshanlal C. Agarwal...Appellant

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Versus

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Sama Mohamad Sharif Dalvi And Anr.

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...Respondents

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Ms. Apurva Gupte a/w Mr. Vinayak Tare for the Appellant.

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CORAM : JITENDRA JAIN, J.
DATE: 25th AUGUST, 2023.

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JUDGMENT (JITENDRA JAIN, J.)

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1.This appeal is filed under Section 58 of the Real Estate
(Regulation and Development) Act, 2016 (for short “RERA Act”)
challenging the order of Maharashtra Real Estate Appellate Tribunal
(Appellate Tribunal) dated 22nd July, 2022. The questions of law raised in
the appeal memo are reframed as under :

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Digitally signed by SUNNY SUNNY ANKUSHRAO ANKUSHRAO THOTE THOTE Date: 2023.09.07 15:00:19 +0530

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“Q.1.Whether the Appellate Tribunal was justified in
upholding the order of the Regulatory Authority on payment of
interest under Section 18(1) of the RERA Act ?

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Q.2.Whether the Appellate Tribunal was justified in
adjudicating the issue of termination of the agreement without
any application by any of the parties for setting aside the
termination ?”

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Narrative of Events :

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2.The Appellant is a promoter of a project called “Swaroop
Harmony” located at Santacruz (East), Mumbai. The Respondents are
allottees of a flat in the aforesaid project developed by the Appellant
promoter.

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3.On 2nd June, 2010, the Respondent allottees booked the flat for
a total consideration of Rs.51,00,000/- by paying a booking amount. The
agreement for sale was executed in the year 2011 between the Appellant
promoter and the Respondent allottees. In the complaint, the Respondent
allottees stated that as per the agreement, the Appellant promoter was to
handover the possession of the said flat to the Respondent allottees within
a period of 30 months. However, no possession was handed over till the
date of filing the complaint although, the Respondent allottees paid a
substantial amount of Rs.46,83,788/- to the Appellant promoter.

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4.Since the Appellant promoter did not handover the possession
as per the agreements, the Respondent allottees filed a complaint with the
Regulatory Authority for claim of interest under Section 18 of the RERA
Act. On 20th February, 2020, the Regulatory Authority disposed of the
complaint filed by the Respondent allottees and passed order giving
following reasons :

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a)As per the agreement produced by the complainant there is no
mention about the date of possession and therefore the authority
rejected the contention of the Respondent allottees that the date of
possession should be within 30 months from the date of registration
of the agreement.

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b)However, in the absence of any date of possession mentioned in
the agreement for sale, the date of completion mentioned in
MahaRERA registration would be considered as the date of
possession which is 31st December, 2017 and since the possession is
not given as per the said date, the Appellant promoter is liable to pay
interest from 1st January, 2018 till the date of actual possession.

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c)The contention of the Appellant promoter on termination of the
agreement vide notice dated 20th January, 2020 is rejected since the
same did not form part of the pleadings during the course of the
hearing before the authority.

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5)Being aggrieved by the said order, Appellant promoter filed an
appeal with the Appellate Tribunal on the grounds set out in the appeal
memo. No appeal was filed by the Respondent allottees against the order
of the Regulatory Authority.

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6)On 22nd January, 2022, the Appellate Tribunal dismissed the
appeal of the Appellant promoter by giving following reasons and
confirmed the order of the Regulatory Authority :

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a)The Regulatory Authority ought to have called for the certified
registered agreement in which the date of possession is mentioned as
within 30 months from the date of registration of the agreement.

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b)In any case, the Appellate Tribunal observed that the reasonable
period of 3 years should be considered as the date of completion of
the project and handing over of the possession even if no date is
mentioned in the agreement which reasonable period in the instant
case would be expiring in December, 2014 but since no appeal is filed
by the Respondent allottees, the Appellate Tribunal confirmed the
Regulatory Authority’s order for the payment of interest to begin
from 1st January, 2018.

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c)The Appellate Tribunal rejected the reasons mentioned by the
Appellant promoter for the delay in completion of the project by
relying upon the decision of the Supreme Court in the case of
Newtech Promoters and Developers V/s State of U.P.1

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d)The Appellate Tribunal also rejected the contention of the
Appellant promoter on the issue of termination of the agreement on
the ground that no evidence is produced by the Appellant promoter
that there was any default in making payment by the Respondent
allottees.

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7.It is on this backdrop that the present appeal is filed before this
Court challenging the order of the Appellate Tribunal.

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1 2021 SCC Online SC 1044.

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8.Heard finally the learned counsel for the Appellant on all the
issues and perused the voluminous appeal paper book filed by the
Appellant promoter.

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9. Submission of the Appellant : The Appellant contended that the

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Appellate Tribunal has considered the registered certified copy of the
agreement in which the date of possession was mentioned although the
same was not produced before the Regulatory Authority and was also not
shown to the Appellant promoter and therefore the impugned order is bad
in law. The Appellant promoter further submitted that the Appellate
Tribunal cannot give reasons and findings which are contrary to the
Regulatory Authority. The Appellant further contended that the Appellate
Tribunal does not have the power to set aside the termination letter
without there being any formal application of the parties for setting aside
the same. The Appellant also contended that they are not liable to pay the
interest on the ground of the reasons mentioned for delay in the
completion of the project. The Appellant, therefore contended that the
appeal be admitted and be allowed in favour of the Appellant.

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Analysis and Conclusion :

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10.Delay in Date of Possession : Admittedly, there is a delay in
handing over the possession of the flat by the Appellant promoter to the
allottee since the agreement was executed in 2011 and possession has not

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been given till the date when Regulatory Authority decided the complaint
that is till 2020. The Regulatory Authority has observed that in the
absence of the date of possession being mentioned in the agreement, the
delay would be considered as per the date of completion/possession
mentioned with MahaRERA registration which was 31st December, 2017
and since the possession was not handed over by the said date, the
Regulatory Authority directed the Appellant promoter to pay interest from
1st January, 2018 till the actual date of possession. Against this finding the
Respondent allottees did not file any appeal to the Tribunal although they
in their complaint before the authority had claimed interest from the
expiry of 30 months from the date of agreement that was executed in
2011. The Appellate Tribunal considered the certified copy of the
registered document and came to a conclusion that the agreement
mentioned the date of possession as within 30 months from the date of
registration of the agreement which period expired in the year 2014.
However, since the Respondent allottees had not challenged the order of
the Regulatory Authority, the starting date for payment of interest was
confirmed by the Appellate Tribunal as 1st January, 2018 which was the
date arrived at by the Regulatory Authority. Therefore, whether the
Appellate Tribunal was justified in considering the certified copy of the
registered document in which the date of possession was mentioned and
which according to the Appellant promoter was not produced before the

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Regulatory Authority is inconsequential, because the Appellate Tribunal
has not changed the starting date of payment of interest as per the
certified registered agreement produced before them and the Regulatory
Authority took the date mentioned in MahaRERA registration as date of
completion. There is no ground in the present appeal that the Appellant
promoter was not shown the certified copy of the agreement. In any case,
for reasons recorded in subsequent paras this contention is found to be
false. Therefore, on this account the contention of the Appellant promoter
before this Court does not take the case any further. It is well settled that
the Appellate proceedings are continuation of original proceedings and
therefore the Appellate Tribunal can confirm the orders of the Regulatory
Authority on any other ground as well. Even otherwise, assuming no date
is mentioned in the agreement, the Appellate Tribunal considered
“reasonable period” of 3 years which also cannot be faulted because even
that period expired in 2014 and date of payment of interest as orderd by
the Regulatory Authority did not change that is 1st January, 2018. The
counsel for the Appellant fairly sated that she has nothing to say on the
“reasonable period”. If at all anyone can be said to be aggrieved it was
Respondent allottees and the Appellant in so far as date of payment of
interest is concerned because the Respondent allottees although entitle to
interest for the period prior to 2018 did not receive the same because they
did not challenge the original order.

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11.The Appellant promoter contended that the Appellate Tribunal
has not shown them the copy of the certified registered agreement which
has been considered in the impugned order by the Appellate Tribunal. This
submission is contrary to the facts on record in as much as the copy of the
registered document is available with the Appellant promoter which is
evident from the fact that the Appellant promoter had filed various
documents before the Regulatory Authority and one of the document as
per the Index consists of the registered sale agreement dated 21st
December, 2011. On a query being posed by the Court, the Appellant
promoter admitted that they have executed the registered document. In
the light of this fact, the Appellant promoter cannot make a grievance that
the Appellate Tribunal has not shown them the said document since the
same is already in the possession of the Appellant promoter. Even
otherwise, the said document was considered by the Appellate Tribunal for
ascertaining the date of possession. However, the Appellate Tribunal has
not given the benefit of interest to the Respondent allottees from the date
of possession mentioned in the certified registered document and
therefore this ground of the Appellant promoter is inconsequential.

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12.In so far as, the reasons for the delay in handing over of the
possession is concerned, the Appellant promoter has only given vague and
general reasons like delay in vacating the plot by the existing slum

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dwellers, limited space available for construction activity, delay in issue of
occupancy certificate, dispute between the parties, financial crisis etc. In
my view, the said reasons cannot absolve the Appellant promoter from
compensating the allottees by way of interest. These are the reasons
which are normal incidents of the construction business and which the
Appellant promoter is well versed and aware of while agreeing to the date
of possession in the agreement with the allottees. Under section 18(1) of
the RERA Act, the right of the allottee to the interest is an unqualified
right and not dependent on any contingencies or stipulations which the
Appellate promoter faces. This issue is now no more res integra in the
light of Paragraph 25 in the decision of the Supreme Court in the case of
Newtech Promoters and Developers (supra). Furthermore, the Appellant
promoter has only made a vague statement without leading any evidence
before any of the authorities and therefore even on this account the
reasons submitted are to be rejected at the outset. The reasons for the
delay are not attributable to the Respondent allottees. The entitlement of
interest under Section 18(1) is unqualified and therefore the contention of
the Appellant on this issue is to be rejected.

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13.The Supreme Court in the case of DLF Home Developers Ltd. V/

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s. Capital Greens Flat Buyers Association has observed that delay in
approval of a building plan is a normal incident of a construction project.

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The developer would have been conscious of these delays and cannot set
up as a defense to resist the claim for compensation before the judicial
forums. In my view, the ratio of this judgment of the Hon’ble Supreme
Court squarely applies to the facts of the present appeal. The purpose and
objective of the Consumer Protection Act and RERA Act being similar, this
decision of the Hon’ble Supreme Court, although rendered in the context
of the Consumer Protection Act, would apply with equal force for deciding
the issue under the RERA Act.

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14.The Respondent allottees had addressed various letters to the
Appellant promoter wherein it was mentioned that the date of possession
was 30 months from the date of the execution of the agreement. However,
there is no rebuttal to these letters by the Appellant promoter nor any
letter is produced before us. Therefore, the Appellant promoter cannot
contend that the Appellate Tribunal was not justified in considering the
certified registered document for ascertaining the date on which the
possession should have been handed over to the Respondent allottees.

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15.Termination: In so far as, the contention of the Appellant
promoter on termination issue is concerned, the said issue was raised by
the Appellant promoter before the Regulatory Authority, as observed by
the said authority in Paragraph 11 of its order. It was at the behest of the
Appellant promoter that the issue of termination was raised by them i.e.

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the Appellant promoter before the Regulatory Authority and the said issue
was again raised by the Appellant promoter before the Appellate Tribunal.
Therefore, the contention of the Appellant promoter that the Tribunal
should not have given any finding on the issue of termination without
there being any application on the said issue by any one of the party is
contrary to its own stand since the said issue was raised by the Appellant
promoter themselves before the Regulatory Authority as well as before the
Tribunal. The Appellate Tribunal after hearing both the parties has given
a finding and therefore no fault can be found in the impugned order since
the Appellant promoter themselves have invited the said adjudication. The
Appellant therefore cannot object the Appellate Tribunal’s power on this
issue.

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16.The Appellant promoter contended that the agreement is
terminated by virtue of frustration of contract and therefore, the
Respondent allottees are not entitled to claim interest. The letter dated
20th January, 2020 on termination by the Appellant promoter is an after
thought to frustrate the complaint filed by the allottees with the
Regulatory Authority, since it was almost at the fag end of hearing before
the Regulatory Authority that this particular letter, terminating the
agreement was sent by the Appellant promoter. There is no reason given
in the said letter for any default on the part of the allottees so as to entitle

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the Appellant promoter to terminate the agreement unilaterally. The said
termination letter on the contrary confirms the fact that the allottees are
not responsible for the delay in the project and this termination letter
appears to be a counter blast to the complaint filed by the Respondent
allottees. In the said letter, Appellant promoter admits that the project
ought to have been completed within three years but same has not been
completed for various commercial reasons specified therein. Therefore,
based on this letter itself of the Appellant promoter no fault can be found
in the orders of both the Authorities.

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17.In view of above, the present appeal is devoid of any merits,
totally misconceived and purely based on concurrent findings of facts and
therefore no substantial question of law to be arises from the impugned
order.

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18.Cost: The Appellant promoter has raised the issue of
termination of agreement before both the lower authorities and now in
the present appeal contends that the Tribunal ought not to have
adjudicated without any application by any of the parties. This, in my
view, is gross abuse of process of law by the Appellant and cannot be
permitted. In so for as date of agreement is concerned, the Appellant
promoter contended that they were not shown certified copy of registered
agreement by the Tribunal although on a query raised by the Court, they

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admitted same was executed by them. Also in their own termination letter
they have admitted that possession will be given within 3 years. Inspite of
these admission the Appellant promoter has contended contrary in the
present appeal. Therefore this is a fit case for the Court to impose cost on
the Appellant promoter for such a conduct. The conduct of the Appellant
appears to be to frustrate the claim of the allottees.

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19.The appeal is dismissed with cost of Rs.50,000/- to be paid to
the Kirtikar Law Library, Bombay High Court, Mumbai on or before 31st
October, 2023 and compliance be reported to the Registrar (Judicial-I) of
this Court on or before 30th November, 2023. If there is failure to deposit
the said cost then Registrar will take appropriate action for recovery of the
same from the Appellant including partners and also necessary action be
taken in accordance with law for non-compliance of this order, in addition
to recovery of the cost.

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20.Copy of this order be sent to the Secretary of Kirtikar Law
Library, Bombay High Court, Mumbai.

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 [JITENDRA JAIN, J.]

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Satyam Developers Thr. Mr. Roshanlal C. Agarwal v. Sama Mohmad Sharif Dalvi and Anr.

Case brief

What is this about?

What did the court decide?

Satyam Developers Thr. Mr. Roshanlal C. Agarwal v. Sama Mohmad Sharif Dalvi and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

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