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RERA Act 2016 – Obligation of the promoter to deposit of amount awarded by the MahaRERA in the Appellate Tribunal – Mandate of proviso to Section 43(5) to entertain appeal of the promoter

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Respondents – flat allottees approached the MahaRERA for possession of their flats with interest in Gajanan Plaza against the Appellant.

By the order dated 31.10.2022, the Authority had allowed the complaints.   The Appellant filed appeals against the said order before the Tribunal.

By the Order dated 2.3.2023, the Appellate Tribunal directed the appellant to deposit the entire amount entire amount ordered by the Authority in compliance with proviso to Section 43(5) of RERA Act, 2016.  Proviso to Section 43(5) of RERA Act provides that the appeal of the promoter shall not be entertained without first having deposited at least thirty per cent of the penalty or such higher percentage with the Appellate Tribunal.

Since the amount was not deposited, the Appellate Tribunal passed order dated 26.4.2023 dismissed the appeals.

This was challenged in the High Court on the ground that the Authority did not quantify the amounts payable under the Order dated 31.10.2022.   The Appellate Tribunal was, therefore, directed to quantify the pre-deposit amount.

By the order dated 27.10.2023, the Appellate Tribunal had quantified the pre-deposit amount.

HELD that the objective of pre-deposit amount underlying proviso to section 43(5) is to ensure that the promoter does not engage the flat purchasers in endless litigation without any consequences. The proviso acts as deterrent against promoters and to curb tendency to indulge in unnecessary litigation.  The basic idea is that amount awarded by the Authority must be deposited with the Appellate Tribunal.   The Appellant must deposit the amount of interest as directed by Authority as a pre-condition for entertainment of appeals before the Appellate Tribunal even though its liability to pay such interest is not in praesenti but in future.

Judgment dated 20.2.2024 – Balaji Construction Company Vs. Anjusha Ajit Kadam and others in Second Appeal No.731 of 2023 with connected matters

 

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