Right of appeal to builder with pre-condition is illusory: First bench

The first bench comprising Chief Justice AP Sahi and Justice Subramonium Prasad, before whom the plea came, regarding the illusory right as envisaged under Section 43 of the Real Estate (Regulation and Development) Act, 2016, sought for the affidavit within two weeks while posting the case for further hearing to January 21. It was contended on behalf of the petitioner, a realtor, that non-hearing of the appeal amounts to denying the remedy of appeal itself on account of deposit as per the said pre-condition. This is coupled with the fact that there is no discretion vested in the Adjudicatory Authority either to reduce or waive the amount of deposit.

“If, as an illustration, an order is passed by the Adjudicatory Authority which may be absolutely either disproportionate or perverse and the appeal filed against the same is liable to succeed, would the promoter be still required to deposit the entire amount of compensation so determined before the appeal is heard?” the petitioner’s counsel contended.

Counsel further submitted that total absence of discretion with the Appellate Authority renders the remedy to be nugatory and illusory, more particularly, in a case where a promoter has been called upon to deposit excessively an inflated amount which may otherwise be not payable or may not be an amount that the promoter can muster enough resources to support the appeal. However, opposing the petition, G Rajagopalan, Additional Solicitor General of India, contended that the condition has been incorporated in the Act in order to protect and secure the interest of investors, purchasers of flats and apartments, who otherwise are pitted against the might of builder, who having either defaulted or violated the terms of the agreement, deserves to be put to stringent conditions even if statutory appeal is available to the builder.

He further submitted that hence, the condition is not onerous keeping in view capacities of the contracting parties viz., promoter, builder, as against the investor/ purchaser of an apartment.

The bench also sought counsel for the parties to inform the Court as to whether the judgment of the Delhi High Court, relied on by the petitioner’s counsel, was taken up in an appeal before the Apex Court.