Whether RERA Is Authorised To Prefer Appeal To HC Against Decision Of Appellate Tribunal?: Supreme Court To Consider

The bench of Justices Abdul Nazeer and Krishna Murari was hearing an SLP by Satyam Infracon against a March order of the Gujarat High Court holding that the Gujarat RERA would be included in the definition of 'Person' on a conjoint reading of Section2(zg) and 2(o) of the Real Estate (Regulation and Development) Act, 2016; and that the Authority falling within the definition of the word 'Person' is therefore empowered to challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the Act. An order passed by the Presiding Officer, Gujarat Real Estate Appellate Tribunal, Gandhinagar was sought to be assailed by Gujarat RERA in the appeal before the High Court under Section 100 of the CPC read with Section 58 of the 2016 Act. The SLP petitioner had taken a primary objection before the High Court with regard to maintainability of the appeal, contending that the scheme of the Act does not envisage RERA being empowered or authorised to prefer an appeal before the High Court against a decision passed by the Appellate Tribunal.

On Friday, Senior Advocate Mukul Rohatgi, for Satyam Infracon, told the bench headed by Justice Nazeer, "A very interesting question of law arises in this matter- whether RERA can maintain an appeal under the Act. We say that it cannot"

He took the bench through section 58 of the Act which states that "Any person aggrieved by any decision or order of the Appellate Tribunal, may, file an appeal to the High Court..." He indicated that section 2(zg) of the Act defines "person" as including an individual; a Hindu undivided family; a company; a firm; a competent authority; an association of persons or a body of individuals whether incorporated or not; a co-operative society registered under any law relating to co-operative societies; or any such other entity as the appropriate Government may, by notification, specify in this behalf.

Next, Mr. Rohatgi submitted that as per section 2(p), "competent authority" means the local authority or any authority created or established under any law for the time being in force by the appropriate Government which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property.

"I concede that RERA might fall under clause (p)", said the Senior Advocate.

However, he continued to argue that section 2(i) defines "Authority" to mean the Real Estate Regulatory Authority established under sub-section (1) of section 20 of the Act.

"RERA, which is the opposing party in my case, and is the 'Authority' under the Act, cannot also be a 'competent authority' to be able to maintain an appeal. Since RERA is defined separately as the 'Authority' under clause (i), it cannot also fall under a second clause! And therefore, it is not a 'person' and has no right to file an appeal!", advanced Mr. Rohatgi.

SG Tushar Mehta, for the respondent- Gujarat RERA, submitted. "RERA is a statutory body serving manifold purposes, including proper development of the city and ensuring that home buyers are not cheated. The petitioner had applied for permission to construct a multi-storey in 2000 but the application remained pending. Subsequently, they were granted approval as per the old Act. Now because the city of Surat has a history of floods every year and the petitioners have not complied with building safety regulations, including fire safety etc, we said that we will not register them. They joined me as a respondent before the Appellate Authority and the Appellate Authority allowed their appeal. It is my duty to challenge that order. My appeal before the High Court is pending and they can oppose me on merits. But on whether I could have filed an appeal...?"

"Mr. Rohatgi, you will not build the structure, that is certain", Justice Nazeer told Mr. Rohatgi.

"But here is a question of maintainability. We may have to examine the question of law", added the judge.

The bench issued notice on the petition, granting 4 weeks' time to file the counter-affidavit.

In its impugned order, the Single Judge of the Gujarat High Court noted that questions which arise for consideration of this Court in view of the preliminary objection are that (i) whether the words "any person" mentioned in Section 58 of the Act includes the appellant i.e. the Gujarat Real Estate Regulatory Authority, and (ii) whether the Authority (Real Estate Regulatory Authority) is empowered to challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the Act.

The first question being whether the term/word 'person' as occurring in Section 58 of the Act would include the Authority or not, the Court found that the word 'Person' as defined in Section 2(zg) of the Act does not directly refer to the 'Authority' as person, but upon reading of Section 2(o) of the Act, a completely different meaning can be culled out inasmuch as the Section 2(zg)(iii) states that the word 'Person' also includes 'a company'. In definition of the word "company" at Section 2(o) of the Act in addition to a company incorporated and registered under the Companies Act, 2013, the words "a development authority or any public authority established by the Government in this behalf" is also included. "Now, undoubtedly the Real Estate Regulatory Authority is a public authority established by the Government under the Real Estate (Regulation and Development) Act, 2016. Again the words 'in this behalf' would, in the considered opinion of this Court, mean a public authority established by the Government under the Act for the purpose of fulfilling the purpose and object of the Act. In the considered opinion of this Court, the Real Estate Regulatory Authority is the Authority established under the provisions of the Real Estate (Regulation and Development) Act, 2016, and the very purpose of the Authority is as found in Section 34 of the Act to perform all such functions for fulfillment of the purpose and object of the Act. Thus, the word 'person' in Section 58 of the Act, encompasses in its ambit,the Authority i.e. the Real Estate Regulatory Authority and under such circumstances, the appellant- Authority is empowered to prefer an appeal before the High Court against any direction or decision of the Appellate Tribunal", concluded the single bench.

The Single Judge opined that even otherwise, accepting the preliminary objection, would result in an incongruous situation inasmuch as while the Authority would be joined/heard in an Appeal preferred to the Appellate Tribunal, the Authority would be precluded from challenging the decision of the Appellate Tribunal, if the Authority is aggrieved by the same. "This position is clarified in the use of the words "after giving the parties an opportunity of being heard" which is used at Section 44(3) of the Act. The word 'parties', in the considered opinion of this Court, would necessarily include the Authority, since the decision of the Authority or adjudicating authority would be under challenge before the Appellate Tribunal and whereas if it were the intent of the legislature to given an opportunity of hearing only to the person preferring the appeal, then the word 'Appellant' would have been used. Therefore, from the use of the word 'parties' as against the word 'Appellant' it becomes clear that the intent was to ensure that the Authority would get an opportunity of being heard before the Appellate Tribunal. Thus, it cannot be gainsaid that such an incongruous position, of the Authority having a right of being heard by the Appellate Tribunal but the Authority not being empowered to challenge the decision of the Appellate Tribunal, would not have been intended by the framers of the statute. Under such circumstances, on an overall reading of the concerned provisions, this Court is of the considered opinion that the Authority does have a right under the Act to challenge a decision of the Appellate Tribunal under Section 58 of the Act, before the High Court. Thus, the finding of the Authority being a 'Person' as per Section 2(zg) read with Section 2(o) of the Act gets further fortified on the basis of the discussion, observation and findings above", observed the High Court

Thus, in the considered opinion of this Court, the questions raised herein above can be answered as thus :
(i) The Authority would be included in the definition of 'Person' on a conjoint reading of Section2(zg) and 2(o) of the Act; and
(ii) The Authority falling within the definition of the word 'Person' is therefore empowered to challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the Act.
"In view of the above findings, the preliminary objection raised by the respondent No.1 is rejected", ruled the High Court.