The Chhattisgarh High Court recently held that under Section 71(1) of the Real Estate (Regulation & Development) Act, 2016, the adjudicating authority can decide the compensation alone. A Division Bench of Justices Goutam Bhaduri and Sanjay S. Aggarwal remarked that reading Section 71(1) of the RERA Act, 2016 would show that the powerof adjudicating officers is to adjudicate compensation. As a necessary corollary to decide the quantum of compensation, the adjudicating officer may hold an inquiry after giving a person concerned a reasonable opportunity of being heard to find out the degree of development to be carried out. The said appointment of the adjudicating officer is also in conformity to the object of the legislation to decide the compensation.
The appellants in the instant case are builders and developers, and the private respondents are the ones who have purchased plots. The private respondents filed a complaint before the Real Estate Regulatory Authority. It is their case that they purchased plots in a project known as Adam World City, Kachina, on different dates. They wanted to construct the houses, but the builders objected to the same, making a demand for infrastructure development fees. Apart from that, the development work in the Colony, i.e., Walkway, Fire-station, Open Area, Temple, Development of Pond, Garden, Other amenities of the Retail & Business Shops, Hospital, Amphitheater, Supermarket, Multiplex, ATM, Library, Doctor, Kids' Play Area was not provided. The boundary wall also remained incomplete, and the roads were without street lights. Whereas in the brochure and the advertisement, all the amenities were promised to be provided.
Before the RERA, all the applications filed by
the private respondents were dismissed through a joint order. After that, an
appeal was preferred before the Appellate Tribunal, which remanded the case
with certain directions to get the area inspected to evaluate whether
development work was carried out or not, and further direction was given on the
issue of payment of development/user charges in the absence of agreement
non-execution of the agreement be referred to the adjudicating authority. The
grievances of the private homebuyer were directed to be decided afresh.
Being aggrieved by the said order, the
present appeals have been filed.
The first question of law in substance concerns
whether the power exercised by the single-member Appellate Tribunal of STAT
would be valid under the RERA and, therefore, whether it was within the
jurisdiction. To answer the question, the Court perused the mandate of Sections
43 & 45 of the Real Estate (Regulation and Development) Act, 2016. The
Appellate Tribunal of RERA was not available in Chhattisgarh, as was required
under the RERA Act, 2016, to be established within one year. When the
consequences of non-compliance in the statute are not provided or if the Act is
not followed, will it be mandatory or directory? It referred to the case
of Balwant Singh v. Anand Kumar Sharma. In this case, the Court had emphasized
the effect of law that when no consequence is provided, it would be directory
in nature. Also, in the case of State of Uttar Pradesh v. Babu Ram Upadhyay,
it was held that it is well established that enactment in form mandatory might
in substance be a directory. It was further held that the Courts of
Justice must try to get at the real intention of the Legislature by carefully
attending to the whole scope of the statute to be construed.
It referred to the decision of the Supreme
Court in Mohan Singh v. International Airport Authority of India (1997), where
a reference to the book of mandate on the construction of the statute has
fortified the principle of the question as to whether a statute is mandatory or
directory depends upon the language in which the intent is clothed. It
had remarked,
"The meaning and intention of the
legislature must govern, and these are to be ascertained, not only from the
phraseology of the provision, but also by considering its nature, its
design, and the consequences which would follow from construing it the one way
of the other."
The Supreme Court, in this case, further laid
down that where the language of the statute creates a duty, a special remedy is
required to be prescribed for non-performance of the duty. Applying the
aforesaid principle, the interpretation of subsection (1) of section 43 of the
Act of 2016 when the Appellate Tribunal is not established by the State
within one year, as required by the Act of 2016, non-compliance since would not
result in any consequence, the word used in section 43(1) of the Act of
2016 would be directory in nature. It was further remarked that the
State, in the exercise of power under proviso to sub-section (5), had ordered
that until the Appellate Tribunal is constituted under RERA, the powers will be
executed Chhattisgarh State Transport Appellate Tribunal.
Therefore, STAT was bestowed with the power to
exercise the appellate function. The proviso Section 43(4)(2) reads that until
the establishment of the Appellate Tribunal under section 43, the
appropriate Government, by order, shall designate any Appellate Tribunal
functioning under any law for the time being enforced to be the Appellate
Tribunal to hear the appeal under the Act of 2016.
In the instant case, the STAT, which was an
Appellate Tribunal functioning under the Motor Vehicles Act, 1988 and was constituted
under Section 89 of the Motor Vehicle Act, 1988, was designated to
exercise the power of the Appellate Tribunal of RERA. The Court remarked
that prima facie, therefore conformant of power on STAT was done as per the
power conferred under proviso to RERA Act, 2016.
Section 43 of the RERA Act, 2016 further provides
that after the Appellate Tribunal is established, the matter pending before the
designated Appellate ribunal shall be transferred to the Appellate
Tribunal constituted under the RERA. Reading the proviso clause does not
contemplate that Appellate Tribu
nal cannot be of a single member
and was constituted under the Motor Vehicles Act, 1988; therefore, it would
have the jurisdiction. It remarked, The proviso clause is qualified with
the word that the designation to any other Appellate Tribunal can be
functioning under any law for the time being enforce can exercise the power. Therefore, that
qualified exception would bring it out the necessity of section 43(3) read with
section 45 of the Act of 2016, wherein certain number of members are
required to complete the constitution of forum i.e. Judicial & Technical/
Administrative Member."
Therefore, the order passed by the
single-member STAT in exercising the power of the Real Estate Appellate
Tribunal was held to be justified.
On whether the Tribunal was justified in law
remanding the case to the adjudicating officer under Section 71 of RERA Act,
2016, the Court perused the order of the learned Appellate Tribunal. It
noted that the direction given by the Tribunal is twofold- the first direction contains
that an Architect should be appointed either of RERA or with the consent of
both the litigant an inspection be carried out about the development
done by the builder. The order further contains a direction that the litigants
be given a chance to hear and produce evidence. After that, the second
part of the direction contains that with the consent of both the parties/ litigants,
different development and infrastructure changes required to be levied may be
decided in the absence of agreement of same.
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