Functional Establishment of Appellate Tribunal Under RERA Occurs Only Upon Members Assuming Office Post-Oath

01Facts

The Appellants (Promoters) launched a real estate project in Mulund in 2005–2006.

The Respondents (Allottees) booked flats between 2005 and 2007, paying substantial considerations (ranging from 10.6% to 100%)

¶ 10

Agreements stipulated possession dates between 2008 and 2010

¶ 10

Following significant delays, the Allottees approached the Real Estate Regulatory Authority seeking interest for delayed possession

¶ 3

The Competent Authority passed vague directions to "expedite" work without fixing liability

¶ 3

On appeal, the Designated Appellate Tribunal (Maharashtra Revenue Tribunal) ordered the Promoter to pay interest @ 10.05% p.a. from 1st February 2014 until actual possession and directed completion within 18 months

¶ 4

02Issues

i.1. Whether the Maharashtra Revenue Tribunal (MRT) had jurisdiction to adjudicate appeals under RERA after the notification of the permanent Maharashtra Real Estate Appellate Tribunal but before its members took oath

¶ 6, 11

ii.2. Whether the composition of a "single-member bench" of the MRT was ultra vires Section 43(3) of RERA

¶ 6, 72

iii.3. Whether authorities under RERA can fix a possession date or grant interest if the Agreement for Sale contains force majeure and extension clauses

¶ 6, 100

iv.4. Whether the demolition of "Tower C" due to new DCPR 2034 regulations constituted "frustration of contract" under Section 56 of the Contract Act

¶ 132

03Law Applied

Section 43 of the RERA, 2016, regarding the "establishment" of the Appellate Tribunal, and Section 43(4) first proviso, which allows "designating" an existing tribunal as a pro-tem arrangement

¶ 14, 20

Rule 8 of the Maharashtra Real Estate Appellate Tribunal Rules, 2017, mandating an "Oath of Office" before a member "enters upon office"

¶ 14, 39

Section 18 of RERA was applied, establishing an "unqualified right" to interest for delayed possession

¶ 105, 111

Newtech Promoters v. State of UP (2021) regarding the retroactive application of RERA

¶ 16

Pioneer Urban Land v. Govindan Raghavan (2019) regarding "one-sided" unconscionable contracts

¶ 125

Section 56 of the Indian Contract Act and the "multi-factorial approach" from Energy Watchdog v. CERC (2017)

¶ 139, 145

Provisions in the judgment · 52 · Linked ones open on LawLens

Real Estate (Regulation and Development) Act, 2016. 39 provisions

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 11 Section 12 Section 13 Section 14 Section 16 Section 17 Section 18 Section 19 Section 20 Section 21 Section 22 Section 31 Section 34 Section 40 Section 43 Section 44 Section 45 Section 46 Section 47 Section 48 Section 53 Section 55 Section 58 Section 59 Section 71 Section 72 Section 79 Section 80 Section 81 Section 84 Section 88 Section 92

Indian Contract Act, 1872 Section 32 Section 56

Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 Section 8

Recovery Of Debts And Bankruptcy Act, 1993 Section 2 Section 17 Section 18 Section 19 Section 25 Section 30 Section 31 Section 34

Administrative Tribunals Act, 1985 Section 5

Companies Act, 2013 Section 434

04Reasoning

The Court first resolved the jurisdictional challenge, holding that "establishment" implies a "functional" tribunal; since the permanent members only took oath on 24th December 2018, the MRT (Designated Tribunal) validly held jurisdiction when passing the order on 1st November 2018

¶ 42, 61

The court rejected the argument that pro-tem tribunals must match the "two-member bench" composition of a regular RERA tribunal, noting that the first proviso to Section 43(4) allows "any" functioning tribunal to act as the Appellate Tribunal

¶ 88, 93

On the merits, the Court held that Section 18 of RERA creates a statutory, unqualified right to interest for delay that cannot be waived by "force majeure" clauses unless the events genuinely beyond control are proved

¶ 111, 116

The claim of "frustration" for Tower C was dismissed as "self-induced" and "bad faith," as the Promoter chose to demolish the building to nearly double the number of floors for profit (from 22 to 48) under new regulations, despite retrofitting being a viable, albeit more expensive, option

¶ 148, 150

05Holding

The High Court answered all issues in favor of the Respondents and dismissed the 10 Second Appeals

¶ 162

It held that the MRT's order was well-reasoned and within jurisdiction

¶ 160

The Court affirmed the Allottees' right to interest @ 10.05% from 2014

¶ 121

Specifically for Second Appeals 253 and 257 (Tower C), the court found the Promoter had misrepresented facts to the MCGM by promising to safeguard allottee rights merely to obtain higher FSI. Consequently, those two appeals were dismissed with exemplary costs of ₹1,00,000 each, while the other eight appeals were dismissed with costs of ₹10,000 each

¶ 150, 163-164

Stay on the judgment was refused

¶ 167

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