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2025 DIGILAW 138 (KER)

Gopakumar B. Nair, S/o. The Late Balakrishnan Nair v. K. V. Sugunan, S/o. Vasu

2025-01-30

M.A.ABDUL HAKHIM

body2025
JUDGMENT : (M.A. Abdul Hakhim, J.) 1. These four Miscellaneous Second Appeals are filed by the same Appellant who is the Promoter of the Project, under Section 58 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as ‘the RERA’) read with Section 100 of the Code of Civil Procedure. 2. The appellant was the complainant in the Complaint before the Adjudicating Officer claiming compensation from the Allottees of the Project. The Allottees filed Applications challenging the maintainability of the Complaints, and the Adjudicating Officer considered all the Applications together and passed a Common order allowing the Applications, holding that the Complaints filed by the Promoter for compensation under Sections 19(6) & 19(7) of the RERA from the Allottees are not maintainable. The complainants filed Appeals before the Real Estate Appellate Tribunal, and the Appellate Tribunal dismissed the Appeals by a common order confirming the common order of the Adjudicating Officer. 3. The issue to be considered in these MSAs is whether the Promoter is entitled to file a Complaint before the Adjudicating Officer claiming compensation from the Allottee. 4. I heard the learned counsel for the appellant, Sri.C.S.Manu and the learned Standing Counsel for the Kerala Real Estate Regulatory Authority(K-RERA), Sri. C.M. Nasar. 5. The learned counsel for the appellant contended that the Promoter has the right to claim compensation from the Allottees under Sections 19(6) & 19(7) of the RERA. Section 19(6) mandates an obligation to the Allottees to make necessary agreed payments within the agreed time, and hence the corresponding right in favour of the Promoter to claim compensation from the Allottee in case of breach of such obligation is implicit in the said provision. If such obligation is violated and some damage, loss, or injury is caused to the Promoter, the Promoter is definitely entitled to claim compensation under Section 19(6) by filing a Complaint under Section 31. The learned counsel further contended that any aggrieved person can file a complaint before the Adjudicating Officer against Allottees under Section 31 of the RERA. ‘Any aggrieved person’ referred to in Section 31 would also include the Promoter, as complaints against the Allottees are provided therein. The learned counsel further contended that any aggrieved person can file a complaint before the Adjudicating Officer against Allottees under Section 31 of the RERA. ‘Any aggrieved person’ referred to in Section 31 would also include the Promoter, as complaints against the Allottees are provided therein. The learned counsel further referred to Section 72, in which various factors which are to be taken into consideration for adjudging the compensation or interest are stated and, all of which specifically refer to ‘the default.’ The default may happen either from the Promoter or from the Allottee. It would indicate that in case of default on the part of the Allottee, the Promoter is entitled to claim compensation from the Allottee by filing a complaint before the Adjudicating Officer under Section 31. The learned counsel further contended that in view of the bar of the jurisdiction of the civil court under Section 79, if the Promoter is not allowed to file a complaint claiming compensation before the Adjudicating Officer, the Promoter will be remedy-less when he is legally entitled to get compensation from the Allottee. The RERA is enacted for the purpose of protecting both the interests of the Allottees as well as the promoter. The learned counsel concluded the arguments by praying to admit the MSAs as it involved Substantial Questions of Law. 6. The learned Standing Counsel contented that though the aggrieved person referred in Section 31 includes the Promoter, there is no provision in the RERA enabling the Promoter to claim compensation from the Allottee in any case. 7. In view of the contentions addressed before me, the following questions emerge for consideration. - Whether any of the provisions in the RERA gives substantive right to the Promoter to claim compensation from the Allottee? - Whether Section 31 of the RERA enable the Promoter to file a complaint against the Allottee ?. - Whether Section 79 bars the suit at the instance of the Promoter to claim compensation from the Allottee under the general law.? QUESTION NO.1 8. In order to file a Complaint before the Adjudicating Officer claiming compensation from the Allottee, the Promoter shall have a substantive right to claim compensation under the provisions of the RERA. - Whether Section 79 bars the suit at the instance of the Promoter to claim compensation from the Allottee under the general law.? QUESTION NO.1 8. In order to file a Complaint before the Adjudicating Officer claiming compensation from the Allottee, the Promoter shall have a substantive right to claim compensation under the provisions of the RERA. Section 19(6) creates a statutory obligation that every Allottee who has entered into an agreement for sale to take an apartment, plot, or building, as the case may be, under Section 13, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any. Section 19(7) mandates that the Allottee shall be liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any amount or charges to be paid under sub-section (6). 9. On a conjoint reading of Sub-sections (6) and (7) of Section 19, it could be seen that the said provisions provide that in case of breach of the obligations provided under Sub-Section (6), the Allottee is liable to pay only interest for the delay in making the payments and not liable to pay compensation. In such case, even though the right of the Promoter to get interest from the Allottee is not specifically provided in the said Provision, such right of the Promoter is necessarily implicit in the said provision. Neither the liability to pay compensation nor the right to get compensation is provided in those provisions. But that does not mean that the Promoter is not entitled to get compensation for the delay under the general law of Damages in case he suffers any damage, loss, injury, etc., on account of the delay in making payments within the agreed time by the Allottee. But such right to claim for compensation does not come within the scope of the RERA. 10. The Preamble of the RERA is extracted below. But such right to claim for compensation does not come within the scope of the RERA. 10. The Preamble of the RERA is extracted below. “An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto.” 11. When the RERA is enacted to promote the real estate sector and to ensure the sale of plots, apartments, or buildings, as the case may be, or the sale of real estate projects, in an efficient and transparent manner and for speedy dispute redressal it is definitely beneficial to the Promoters also. But that does not enable the Court to provide a right in favour of the Promoter under the RERA, which is absent in its provisions. 12. Section 71 deals with the power of the Adjudicating Officer to adjudicate the compensation. It provides that the Adjudicating Officer is appointed to adjudicate the compensation under S.12,14, 18, and S.19. These provisions do not in any way provide any liability to the Allottee to pay compensation or any right to the promoter to claim compensation. So the right of the Promoter to claim compensation from the Allottee is outside the scope of the RERA. Hence, I am of the view that none of the provisions of the RERA provides any substantive right to the Promoter to claim compensation from the Allottee. 13. So the right of the Promoter to claim compensation from the Allottee is outside the scope of the RERA. Hence, I am of the view that none of the provisions of the RERA provides any substantive right to the Promoter to claim compensation from the Allottee. 13. It is useful to extract Section 31 of the RERA: “Filing of complaints with the Authority or the adjudicating officer.— (1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter, allottee, or real estate agent, as the case may be Explanation.-- For the purpose of this subsection, the "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force. (2) The form, manner, and fees for filing a complaint under subsection (1) shall be such as may be prescribed. 14. It is clear from Section 31 of the RERA that ‘any person aggrieved’ may file a complaint against any Promoter, Allottee, or Real Estate Agent. The subject matter of the complaint is limited to any violation or contravention of the provisions of the RERA or the Rules and Regulations made thereunder. RERA or the Rules and Regulations made thereunder do not provide any right in favour of the Promoter to get compensation. Complaint claiming compensation alone is maintainable before the Adjudicating officer. The subject matter of the complaint is limited to any violation or contravention of the provisions of the RERA or the Rules and Regulations made thereunder. RERA or the Rules and Regulations made thereunder do not provide any right in favour of the Promoter to get compensation. Complaint claiming compensation alone is maintainable before the Adjudicating officer. It is useful to extract Paragraph 86 of the decision of the Hon’ble Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of U. P. and Others 2021 (13) SCALE 466 delineating the jurisdiction of the Authority and Adjudicating Officer under the RERA: “From the scheme of the Act of which a detailed reference has been made and taking note of the power of adjudication delineated with the regulatory authority and adjudicating officer, what finally culls out is that although the Act indicates the distinct expressions like 'refund', 'interest', 'penalty' and 'compensation', a conjoint reading of S.18 and S.19 clearly manifests that when it comes to refund of the amount, and interest on the refund amount, or directing payment of interest for delayed delivery of possession, or penalty and interest thereon, it is the regulatory authority which has the power to examine and determine the outcome of a complaint. At the same time, when it comes to a question of seeking the relief of adjudging compensation and interest thereon under S.12, S.14, S.18 and S.19, the adjudicating officer exclusively has the power to determine, keeping in view the collective reading of S.71 read with S.72 of the Act. If the adjudication under S.12, S.14, S.18 and S.19 other than compensation as envisaged, if extended to the adjudicating officer as prayed that, in our view, may intend to expand the ambit and scope of the powers and functions of the adjudicating officer under S.71 and that would be against the mandate of the Act 2016.” 15. Hence, the Promoter cannot approach the Adjudicating Officer for relief with respect to any violation or contravention of the provisions of the RERA or the Rules and Regulations made thereunder. Hence, the Promoter cannot approach the Adjudicating Officer for relief with respect to any violation or contravention of the provisions of the RERA or the Rules and Regulations made thereunder. If the Allottee delays the agreed payments and if it gives a cause of action for the Promoter to claim interest, the Promoter can definitely file a complaint before the Authority claiming interest; it is for the Authority to decide whether the Promoter is entitled to get interest for the delay on the part of the Allottee. 16. Hence, I hold that ‘any aggrieved person’ occurring in Section 31 includes Promoter also. But as the RERA or the Rules and Regulations made thereunder do not provide any right to claim compensation in favour of the Promoter, the Promoter cannot file a Complaint before the Adjudicating Officer. QUESTION NO.3 17. The contention of the learned Counsel for the appellant that the Promoter will be without any remedy if the matter of compensation is misconceived. I have already found that if the Promoter has a cause of action to get compensation from the Allottee, it is outside the scope of the RERA. Section 79 bars the jurisdiction of the Civil Court to entertain any suit or proceedings in respect of any matter which the Authority or the Adjudicating Officer or the Appellate Tribunal is empowered by or under this Act to determine. As the claim for compensation at the instance of the Promoter against the Allottee is not a matter which the Authority or the Adjudicating Officer or the Appellate Tribunal is empowered by or under this Act to determine, the Promoter has every right to get his grievance with respect to claim for compensation redressed through other modes including through Civil Court. Hence, I hold that the jurisdiction of the Civil Court is not barred under Section 79 with respect to the claim for compensation at the instance of the Promoter against the Allottee. 18. In view of my answers to the aforesaid questions of law, I do not find any reason or ground to interfere with the common order of the Adjudicating Officer, which is confirmed by the Appellate Tribunal. Though the aforesaid questions of law are involved in the matter, they are not substantial enough to admit the MSAs. 19. 18. In view of my answers to the aforesaid questions of law, I do not find any reason or ground to interfere with the common order of the Adjudicating Officer, which is confirmed by the Appellate Tribunal. Though the aforesaid questions of law are involved in the matter, they are not substantial enough to admit the MSAs. 19. When the questions of law involved in the Second Appeal could be answered with reference to the provisions of the Statute and settled precedents and the answers do not require reversal or modification of the impugned judgments/orders, the Second Appeal under Section 100 of the Code of Civil Procedure is not liable to be admitted. 20. Accordingly, these Miscellaneous Second Appeals are dismissed.