Holding

The Court held that RERA 2016 is retroactive, the regulatory authority alone can order refunds under Sections 18/19, delegation to a single member under Section 81 is valid, and the pre‑deposit requirement under Section 43(5) is constitutionally permissible.

Summary

The Supreme Court considered appeals filed by Newtech Promoters and Developers challenging orders of the Uttar Pradesh Real Estate Regulatory Authority that directed refund of home‑buyers' money with interest. The promoters argued that the authority, a single member, lacked jurisdiction, that the Real Estate (Regulation and Development) Act, 2016 (RERA) was improperly applied retroactively, that the refund power belonged to the adjudicating officer, that delegation under Section 81 was invalid, and that the pre‑deposit requirement under Section 43(5) was unconstitutional. The Court held that RERA is retroactive in character, applies to ongoing projects without a completion certificate, and does not violate Articles 14 or 19(1)(g). It clarified that the regulatory authority, not the adjudicating officer, has jurisdiction to order refunds under Sections 18 and 19, while the adjudicating officer deals only with compensation. Delegation of quasi‑judicial powers to a single member under Section 81 was deemed permissible, and the pre‑deposit condition was upheld as a valid statutory safeguard. Consequently, the appeals were dismissed and the High Court’s orders affirmed.

Issues considered

Whether the Real Estate (Regulation and Development) Act, 2016 is retrospective or retroactive in operation and its constitutional validity.
Whether the regulatory authority has jurisdiction to direct refund of amount to the allottee under Sections 12, 14, 18 and 19, or such jurisdiction lies exclusively with the adjudicating officer under Section 71.
Whether Section 81 authorises the authority to delegate its powers to a single member for hearing complaints under Section 31.
Whether the pre‑deposit condition under the proviso to Section 43(5) for filing an appeal is sustainable in law.
Whether the authority can issue recovery certificates for the principal amount under Section 40(1) of the Act.

Legislation cited

Consumer Protection Act, 1986
Micro, Small and Medium Enterprises Development Act, 2006s. 19
Real Estate (Regulation and Development) Act, 2016s. 12, s. 14, s. 18, s. 19, s. 29, s. 3, s. 31, s. 33, s. 34, s. 40, s. 43(5), s. 71, s. 72, s. 81, s. 85
SARFAESI Act, 2002s. 18
Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016

Subjects

Real Estate (Regulation and Development) Actretroactive legislationjurisdictionrefund of amountcompensationdelegation of powerpre‑deposit conditionrecovery certificateconsumer protectionquasi‑judicial authority

Judgment

[2021] 9 S.C.R. 909 909

M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. A
v.
STATE OF UP & ORS. ETC.
(Civil Appeal Nos. 6745-6749 of 2021)
NOVEMBER 11, 2021 B
[UDAY UMESH LALIT, AJAY RASTOGI
AND ANIRUDDHA BOSE, JJ.]
Real Estate (Regulation and Development) Act, 2016:
ss. 3,18, 19, 31, 71, 81, 43(5) proviso and 40(1) – Appellants-
C
promoters and real estate developers failed to hand over possession
of the unit to allottees/home buyers – Complaint by home buyers
for refund – Single member of regulatory authority passed order
directing refund of the principal amount with interest – Writ petition
by promoters/real estate developers contending that single member
had no jurisdiction to pass the order of refund, and also challenged D
the condition of pre-deposit for filing statutory appeal – Dismissal
of writ petition – On appeal, held: Act of 2016 is retroactive in
character – Conjoint reading of ss. 18 and 19 clearly manifests the
power of regulatory authority to examine and determine the outcome
of the complaint and refund of amount or interest thereon – It was
E
permissible for authority to delegate its power to one of its members
u/s 31 – Furthermore, the condition of pre-deposit for appeal was
sustainable – Thus, there is no error in the order passed by the
High Court – Uttar Pradesh Real Estate (Regulation and
Development) Rules, 2016.
F
Act of 2016 – Retrospective or retroactive in its operation –
Held: Application of the Act is retroactive in character and it cannot
be said to be violative of either Art. 14 or 19(1)(g) – Intention of
the legislature by necessary implication and without any ambiguity
is to include those projects which were ongoing and in cases where
completion certificate has not been issued within fold of the Act – G
Projects already completed or to which the completion certificate
has been granted are not under its fold – At the same time, it would
apply after getting the on-going projects and future projects
registered u/s. 3 to prospectively follow the mandate of the Act – ss.
3(1), 13, 18(1) and 19(4) – Constitution of India – Arts. 14, 19(1)(g).
H
909
910 SUPREME COURT REPORTS [2021] 9 S.C.R.

A ss. 12, 14, 18, 19 and 71 – Return/refund of the amount to
allottee – Jurisdiction of, regulatory authority or adjudicating officer
– Held: There is a complete delineation of the jurisdiction vested
with the regulatory authority and the adjudicating officer – A
conjoint reading of ss. 18 and 19 clearly manifests that when it
comes to refund of the amount, and interest thereon, it is the
B
regulatory authority which has the power to examine and determine
the outcome of a complaint – When it comes to seeking the relief of
adjudging compensation and interest thereon, the adjudicating
officer exclusively has the power to determine, keeping in view the
collective reading of s.71 r/w s.72 – If the adjudication u/ss. 12,
C 14, 18 and 19 other than compensation as envisaged, if extended
to the adjudicating officer as prayed that, may intend to expand
the ambit and scope of the powers and functions of the adjudicating
officer u/s. 71 and that would be against the mandate of the Act
2016.
D s. 81 – Delegation of power to single member of the authority
to hear complaint instituted u/s. 31 – Permissibility of – Held: Is
permissible – s. 81 positively empowers the authority to delegate
such of its powers and functions to one of its member by general or
special order subject to s. 85 – It cannot said to be dehors the
mandate of law.
E
s. 43(5) proviso – Condition of pre-deposit for filing appeal
– Sustainability of – Held: Is sustainable in law – Obligation is cast
upon the promoter of pre-deposit u/s. 43(5), being a class in itself,
and the promoters are in receipt of money which is being claimed
by the home buyers/allottees for refund and determined in the first
F place by the competent authority – Intention of the legislature was
to ensure that money once determined by the authority be saved if
appeal is to be preferred at the instance of the promoter after due
compliance of pre-deposit as envisaged u/s. 43(5) – Thus, it cannot
said to be onerous or in violation of Arts. 14 or 19(1)(g) of the
G Constitution.
s. 40(1) – Issuance of recovery certificates for recovery of
principle amount under – Power of the authority – Held: Power of
authority to direct the refund of the principal amount is explicit in s.
18 and the interest that is payable is on the principal amount –
H There is no interest in the absence of a principal amount being
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 911
v. STATE OF UP & ORS. ETC.

determined by the competent authority – Statute as such is read to A
mean that the principal sum with interest has become a composite
amount quantified upon to be recovered as arrears of land revenue
u/s. 40(1) – There appears some ambiguity in s. 40(1) and by
harmonising the construction of the scheme of the Act with the right
of recovery as mandated in s. 40(1), it is made clear that the amount
B
which has been determined and refundable to the allottees/home
buyers either by the authority or the adjudicating officer in terms
of the order is recoverable within the ambit of s. 40(1).
Object and reasons of the Act – Explained.
Interpretation of Statutes: C
Retroactive statute – Meaning of – Held: Retroactive statute
means a statute which creates a new obligation on transactions or
considerations already passed or destroys or impairs vested rights
– Statute is not retrospective merely because it affects existing rights
or its retrospection because a part of the requisites for its action is D
drawn from a time antecedent to its passing.
Disposing of the appeals, the Court
HELD: 1.1. Looking to the scheme of Real Estate
(Regulation and Development) Act, 2016 and Section 3 in
particular, all “ongoing projects” that commence prior to the Act E
and in respect to which completion certificate has not been issued
are covered under the Act. It manifests that the legislative intent
is to make the Act applicable not only to the projects which were
yet to commence after the Act became operational but also to
bring under its fold the ongoing projects and to protect from its F
inception the inter se rights of the stake holders, including
allottees/home buyers, promoters and real estate agents while
imposing certain duties and responsibilities on each of them and
to regulate, administer and supervise the unregulated real
estate sector within the fold of the real estate Authority.
[Para 37][939-B-D] G
1.2. The clear and unambiguous language of the statute is
retroactive in operation and by applying purposive interpretation
rule of statutory construction, only one result is possible, i.e.,
the legislature consciously enacted a retroactive statute to ensure
sale of plot, apartment or building, real estate project is done in H
912 SUPREME COURT REPORTS [2021] 9 S.C.R.

A an efficient and transparent manner so that the interest of
consumers in the real estate sector is protected by all means and
Sections 13, 18(1) and 19(4) are all beneficial provisions for
safeguarding the pecuniary interest of the consumers/allottees.
In the given circumstances, if the Act is held prospective then
the adjudicatory mechanism under Section 31 would not be
B
available to any of the allottee for an ongoing project. Thus, it
negates the submission of the promoters regarding the
contractual terms having an overriding effect over the
retrospective applicability of the Act, even on facts of the case.
[Para 41][940-D-F]
C 1.3. The provision further emphasizes is that a promoter of
a project which is not complete/sans completion certificate shall
get the project registered under the Act but while getting the
project registered, promoter is under an obligation to prescribe
fresh timelines for getting the remaining development work
D completed and from the scheme of the Act, the first proviso to
Section 3(1) is not in any manner violative of Articles 14 and
19(1)(g) of the Constitution of India. The Parliament is always
competent to enact any law affecting the antecedent events under
its fold within the parameters of law. [Para 42][940-F-H]
E 1.4. At the given time, there was no law regulating the real
estate sector, development works/obligations of promoter and
allottee, it was badly felt that such of the ongoing projects to
which completion certificate has not been issued must be brought
within the fold of the Act 2016 in securing the interests of
allottees, promoters, real estate agents in its best possible way
F obviously, within the parameters of law. Merely because
enactment as prayed is made retroactive in its operation, it cannot
be said to be either violative of Articles 14 or 19(1)(g) of the
Constitution of India. To the contrary, the Parliament indeed has
the power to legislate even retrospectively to take into its fold
G the pre-existing contract and rights executed between the parties
in the larger public interest. [Para 45][941-D-F]
1.5. The consequences for breach of such obligations under
the Act are prospective in operation and in case ongoing project,

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 913
v. STATE OF UP & ORS. ETC.

of which completion certificate is not obtained, are not to be A
covered under the Act, there is every likelihood of classifications
in respect of underdeveloped ongoing project and the new project
to be commenced. [Para 46][941-F]
1.6. The legislative power to make the law with prospective/
retrospective effect is well recognized and it would not be B
permissible for the appellants/promoters to say that they have
any vested right in dealing with the completion of the project by
leaving the allottees in lurch, in a helpless and miserable condition
that at least may not be acceptable within the four corners of law.
[Para 47][941-G-H]
C
1.7. The statute is not retrospective merely because it
affects existing rights or its retrospection because a part of the
requisites for its action is drawn from a time antecedent to its
passing, at the same time, retroactive statute means a statute
which creates a new obligation on transactions or considerations
already passed or destroys or impairs vested rights. D
[Para 51][943-C]
1.8. The Parliament intended to bring within the fold of the
statute the ongoing real estate projects in its wide amplitude used
the term “converting and existing building or a part thereof into
apartments” including every kind of developmental activity either E
existing or upcoming in future under Section 3(1) of the Act, the
intention of the legislature by necessary implication and without
any ambiguity is to include those projects which were ongoing
and in cases where Completion certificate has not been issued
within fold of the Act. [Para 52][943-D-E] F
1.9. Even the terms of the agreement to sale or home
buyers agreement invariably indicates the intention of the
developer that any subsequent legislation, rules and regulations
etc. issued by competent authorities would be binding on the
parties. The clauses have imposed the applicability of subsequent G
legislations to be applicable and binding on the flat buyer/allottee
and either of the parties, promoters/home buyers or allottees,
cannot shirk from their responsibilities/liabilities under the Act
and implies their challenge to the violation of the provisions of
the Act and it negates the submission regarding contractual terms
H
914 SUPREME COURT REPORTS [2021] 9 S.C.R.

A having an overriding effect to the retrospective applicability of
the Authority under the provisions of the Act which is completely
misplaced and is rejected. [Para 53][943-E-G]
1.10. From the scheme of the Act 2016, its application is
retroactive in character and it can safely be observed that the
B projects already completed or to which the completion certificate
has been granted are not under its fold and therefore, vested or
accrued rights, if any, in no manner are affected. At the same
time, it will apply after getting the on-going projects and future
projects registered under Section 3 to prospectively follow the
mandate of the Act 2016. [Para 54][943-G-H; 944-A]
C
State of Bombay (Now Maharashtra) versus Vishnu
Ramchandra AIR 1961 SC 307 : [1961] 2 SCR 26;
Jay Mahakali Rolling Mills vs. Union of India and
Others 2007 (12) SCC 198 : [2007] 8 SCR 855; Shanti
Conductors Private Limited and Another vs. Assam State
D Electricity Board and Others 2019 (19) SCC 529;
Vineeta Sharma vs. Rakesh Sharma and Others 2020
(9) SCC 1 – referred to.
2.1. The legislature in its wisdom has made a specific
provision delineating power to be exercised by the regulatory
E authority/adjudicating officer. “Refund of the amount” and
“compensation” are two distinct components which the allottee
or the person aggrieved is entitled to claim if the promoter has
not been able to hand over possession with a nature of enquiry
and mechanism provided under the Act. So far as the claim with
F respect to refund of amount on demand under Sections 18(1) and
19(4) of the Act is concerned, it vests within the jurisdiction of
the regulatory authority. Section 71 carves out the jurisdiction of
the adjudicating officer to adjudge compensation under Sections
12, 14, 18 and 19 after holding enquiry under Section 71(3) of the
Act keeping in view the broad contours referred to under Section
G 72 of the Act. [Para 75][952-B-D]
2.2. After the Act of 2016 has come into force, if any person
aggrieved wants to make complaint for refund against the
promotor or real estate agent other than compensation, it is to

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 915
v. STATE OF UP & ORS. ETC.

be lodged to the regulatory authority and for adjudging A
compensation to the adjudicating officer, and the delineation has
been made to expedite the process of adjudication invoked by
the person aggrieved when a complaint has been made under
Section 31 of the Act to be adjudicated either by the authority/
adjudicating officer as per the procedure prescribed under the
B
Act. [Para 76][952-E-G]
2.3 To safeguard the interests of the parties, on being
decided by the regulatory authority/adjudicating officer, it is always
subject to appeal before the tribunal under Section 43(5) provided
condition of pre-deposit being complied with can be further
challenged in appeal before the High Court under Section 58 of C
the Act and, thus, the legislature has put reasonable restriction
and safeguards at all stages. [Para 79][954-A-B]
2.4 The submission that if the allottee has defaulted the
terms of the agreement and still refund is claimed which can be
possible, to be determined by the adjudicating officer, appears to D
be attractive but is not supported with legislative intent for the
reason that if the allottee has made a default either in making
instalments or made any breach of the agreement, the promoter
has a right to cancel the allotment in terms of Section 11(5) of the
Act and proviso to sub-section 5 of Section 11 enables the allottee E
to approach the regulatory authority to question the termination
or cancellation of the agreement by the promotor and thus,
the interest of the promoter is equally safeguarded. [Para 80]
[954-B-D]
2.5. The opening words of Section 71(1) of the Act make it F
clear that the scope and functions of the adjudicating officer are
only for “adjudging compensation” under Sections 12, 14, 18 and
19 of the Act. If the legislative intent was to expand the scope of
the powers of the adjudicating officer, then the wording of Section
71(1) ought to have been different. On the contrary, even the
opening words of Section 71(2) of the Act make it clear that an G
application before the adjudicating officer is only for “adjudging
compensation”. Even in Section 71(3) of the Act, it is reiterated
that the adjudicating officer may direct “to pay such compensation
or interest” as the case may be as he thinks fit, in accordance
H
916 SUPREME COURT REPORTS [2021] 9 S.C.R.

A with provisions of Sections 12, 14, 18 and 19 of the Act. This has
to be seen together with the opening words of Section 72 of the
Act, which reads “while adjudging the quantum of compensation
or interest, as the case may be, under Section 71, the adjudicating
officer shall have due regards” to the broad parameters to be
kept in mind while adjudging compensation to be determined
B
under Section 71 of the Act. [Para 81]954-D-G]
2.6 There is a complete delineation of the jurisdiction vested
with the regulatory authority and the adjudicating officer. If there
is any breach or violation of the provisions of Sections 12, 14, 18
and 19 of the Act by the promoter, such a complaint straightaway
C has to be filed before the regulatory authority. What is being
referable to the adjudicating officer is for adjudging compensation,
as reflected under Section 71 of the Act and accordingly rules
and regulations have been framed by the authority for streamlining
the complaints which are made by the aggrieved person either
D on account of violation of the provisions of Sections 12, 14, 18
and 19 or for adjudging compensation and there appears no
question of any inconsistency being made, in the given
circumstances, either by the regulatory authority or the
adjudicating officer. [Para 82][955-A-D]
E 2.7 So far as the single complaint is filed seeking a
combination of reliefs, it is suffice to say, that after the rules have
been framed, the aggrieved person has to file complaint in a
separate format. If there is a violation of the provisions of sections
12, 14, 18 and 19, the person aggrieved has to file a complaint as
per form (M) or for compensation under form (N) as referred to
F under Rules 33(1) and 34(1) of the Rules. The procedure for
inquiry is different in both the set of adjudication and there is no
room for any inconsistency and the power of adjudication being
delineated, still if composite application is filed, can be segregated
at the appropriate stage. [Para 83][955-D-F]
G 2.8. If the literal rule of interpretation is seen that when
the words of the statute are clear, plain and unambiguous, the
Courts are bound to give effect to that meaning regardless of its
consequence. It is always advisable to interpret the legislative

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 917
v. STATE OF UP & ORS. ETC.

wisdom in the literary sense as being intended by the legislature A
and the Courts are not supposed to embark upon an inquiry and
find out a solution in substituting the legislative wisdom which is
always to be avoided. [Para 85][955-G-H; 956-A]
2.9 From the scheme of the Act and taking note of power of
adjudication delineated with the regulatory authority and B
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 Sections 18
and 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 C
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 seeking the relief of adjudging
compensation and interest thereon under Sections 12, 14, 18 and
19, the adjudicating officer exclusively has the power to determine, D
keeping in view the collective reading of Section 71 read with
Section 72 of the Act. If the adjudication under Sections 12, 14,
18 and 19 other than compensation as envisaged, if extended to
the adjudicating officer as prayed that, may intend to expand the
ambit and scope of the powers and functions of the adjudicating
officer under Section 71 and that would be against the mandate of E
the Act 2016. [Para 86][956-B-E]
Imperia Structures Ltd. vs. Anil Patni and Another 2020
(10) SCC 783 – referred to.
3.1. Section 21 of the Act relates to the composition of the F
authority which consists of a Chairperson and not less than two
whole time members to be appointed by the appropriate
Government but conspicuously it does not mention minimum
bench strength at the same time consciously prescribes minimum
bench/quorum while constituting the Real Estate Appellate
Tribunal as reflected under Section 43(3) of the Act. G
[Para 103][962-A-B]
3.2. The emphasis was on Section 29 of the Act which
indicates the quorum of meetings of the authority. There is a
specific provision that there shall be a meeting of the authority
H
918 SUPREME COURT REPORTS [2021] 9 S.C.R.

A with the minimum quorum being prescribed, such business of
the meeting of the authority indeed could not be delegated to a
single member of the authority in exercise of power under Section
81 of the Act. The term meeting under Section 29 of the Act does
not deal with the performance of the authority in quasi-judicial
matters which are referred to under Section 31 of the Act. It only
B
refers to meetings, policy/regulatory issues that the authority is
mandated to discharge under the Act. Sections 32 and 33 are in
the nature of policy/regulatory directions which the authority is
mandated to be discharged indisputably have to be undertaken
by the authority while functioning as a whole body under Section
C 29 of the Act. [Paras 104, 105][962-B-E]
3.3 Section 29(3) and (4) of the Act talks about the questions
before the authority which are to be disposed of within 60 days
on receiving the applications. It may be noticed that there is no
reference to any complaint referred to under Section 31 of the
D Act. To buttress it further, Section 29 and Section 81 of the Act
are not in derogation to each other. To the contrary, both operate
in different fields. Section 29 deals with the meetings of the
authority to be held for taking policy/regulatory decisions in the
interest of the stake holders and does not envisage in its fold
quasi-judicial functions which the Act casts upon the authority.
E The legislative intention as reflected from Section 29 is a
recognition of the rationale that policy matters ought to be
considered and decided by the entire strength of the authority so
that the policy decisions reflect the acquired experience of the
members and Chairman of the authority. [Para 106][962-E-G]
F 3.4 Section 81 of the Act 2016 empowers the authority, by
general or special order in writing, to delegate its powers to any
member of the authority, subject to conditions as may be specified
in the order, such of the powers and functions under the Act.
What has been excluded is the power to make regulations under
G Section 85, rest of the powers exercised by the authority can
always be delegated to any of its members obviously for
expeditious disposal of the applications/complaints including
complaints filed under Section 31 of the Act and exercise of such
power by a general and special order to its members is always

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 919
v. STATE OF UP & ORS. ETC.

permissible under the provisions of the Act. [Para 112][966-E- A
G]
3.5 In the instant case, the authority by a special order dated
5th December, 2018 has delegated its power to the single member
for disposal of complaints filed under Section 31 of the Act.
Pursuant to the delegation of power to the single member of the B
authority, complaints filed by the allottees/home buyers for refund
of the amount and interest under Section 31 of the Act came to
be decided by the single member of the authority after hearing
the parties in accordance with the provisions of the Act. So far as
refund of the amount with interest is concerned, it may not be
considered strictly to be mechanical in process but the kind of C
inquiry which has to be undertaken by the authority is of a
summary procedure based on the indisputable documentary
evidence, indicating the amount which the allottee/home buyer
had invested and interest that has been prescribed by the
competent authority leaving no discretion with minimal nature of D
scrutiny of admitted material on record is needed, if has been
delegated by the authority, to be exercised by the single member
of the authority in exercise of its power under Section 81 of the
Act, which explicitly empowers the authority to delegate under
its wisdom that cannot be said to be dehors the provisions of the
Act. [Paras 107, 108, 113][962-H; 963-A; 966-G-H; 967-A-B] E

3.6 What is being urged by the appellants in interpreting
the scope of Section 29 of the Act is limited only to policy matters
and cannot be read in derogation to Section 81 of the Act and the
interpretation as argued by the promoters if to be accepted, the
very mandate of Section 81 itself will become otiose and nugatory. F
[Para 114][967-B-C]
3.7 It is a well-established principle of interpretation of law
that the court should read the section in literal sense and cannot
rewrite it to suit its convenience; nor does any canon of
construction permit the court to read the section in such a manner G
as to render it to some extent otiose. Section 81 of the Act
positively empowers the authority to delegate such of its powers
and functions to any member by a general or a special order with
an exception to make regulations under Section 85 of the Act. As
H
920 SUPREME COURT REPORTS [2021] 9 S.C.R.

A a consequence, except the power to make regulations under
Section 85 of the Act, other powers and functions of the authority,
by a general or special order, if delegated to a single member of
the authority is indeed within the fold of Section 81 of the Act.
[Para 115][967-C-E]
B 3.8 If the delegation is made at any point of time which is in
contravention to the scheme of the Act or is not going to serve
the purpose and object with which power to delegate has been
mandated under Section 81 of the Act, it is always open for judicial
review. [Para 116][967-G-H; 968-A]
C 3.9 The power to be exercised by the authority in deciding
complaints under Section 31 of the Act is quasi-judicial in nature
which is delegable provided there is a provision in the statute.
Section 81 of the Act empowers the authority to delegate its power
and functions to any of its member, by general or special order.
[Para 117][968-C]
D
3.10 In the instant case, by exercising its power under
Section 81 of the Act, the authority, by a special order dated 5th
December, 2018 has delegated its power to the single member
of the authority to exercise and decide complaints under Section
31 of the Act and that being permissible in law, cannot be said to
E be de hors the mandate of the Act. At the same time, the power
to be exercised by the adjudicating officer who has been appointed
by the authority in consultation with the appropriate Government
under Section 71 of the Act, such powers are non-delegable to
any of its members or officers in exercise of power under Section
F 81 of the Act. [Para 118][968-D-E]
3.11 That scheme of the Act, 2016 provides an in-built
mechanism and any order passed on a complaint by the authority
under Section 31 is appealable before the tribunal under Section
43(5) and further in appeal to the High Court under Section 58 of
G the Act on one or more ground specified under Section 100 of
the Code of Civil Procedure, 1908, if any manifest error is left by
the authority either in computation or in the amount refundable
to the allottee/home buyer, is open to be considered at the

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 921
v. STATE OF UP & ORS. ETC.

appellate stage on the complaint made by the person aggrieved. A
[Para 119][968-F-G]
3.12 In view of the remedial mechanism provided under
the Scheme of the Act, 2016 the power of delegation under
Section 81 of the Act by the authority to one of its members for
deciding applications/complaints under Section 31 of the Act is B
not only well defined but expressly permissible and that cannot
be said to be dehors the mandate of law. [Para 120][968-G-H]
Province of Bombay vs. Kushaldas S Advani and Others
[1950] SCR 621; Shivji Nathubhai vs. Union of India
and Others [1960] 2 SCR 775; Harinagar Sugar Mills C
Limited vs. Shyam Sunder Jhunjhunwala and Others
[1962] 2 SCR 339; Bombay Municipal Corporation vs.
Dhondu Narayan Chowdhary [1965] 2 SCR 929; Sahni
Silk Mills(P) Ltd. and Another vs. Employees State
Insurance Corporation (1994) 5 SCC 346 : [1994] 1
Suppl. SCR 626; Jagannath Temple Managing D
Committee vs. Siddha Math and Others (2015) 16 SCC
542; Saurashtra Kutch Stock Exchange Ltd. vs.
Securities and Exchange Board of India and Another
(2012) 13 SCC 501; State of Uttar Pradesh vs. Batuk
Deo Pati Tripathi and Another (1978) 2 SCC 102 : E
[1978] 3 SCR 131; Heinz India Private Limited and
Another vs. State of Uttar Pradesh (2012) 5 SCC 443 :
[2012] 3 SCR 898 – referred to.
Barnard vs. National Dock Labour Board 1953 (2) QB
18; Vine vs. National Dock Labour Board 1956 (1) QB F
658 – referred to.
4.1 Section 43(5) of the Act envisages the filing of an appeal
before the appellate tribunal against the order of an authority or
the adjudicating officer by any person aggrieved and where the
promoter intends to appeal against an order of authority or G
adjudicating officer against imposition of penalty, the promoter
has to deposit at least 30 per cent of the penalty amount or such
higher amount as may be directed by the appellate tribunal. Where
the appeal is against any other order which involves the return of

H
922 SUPREME COURT REPORTS [2021] 9 S.C.R.

A the amount to the allottee, the promoter is under obligation to
deposit with the appellate tribunal the total amount to be paid to
the allottee which includes interest and compensation imposed
on him, if any, or with both, as the case may be, before the appeal
is to be instituted. [Para 122][969-F-H]
B 4.2. Perusal of scheme of the Act makes it clear that the
limited rights and duties are provided on the shoulders of the
allottees under Section 19 of the Act at a given time, several
onerous duties and obligations have been imposed on the
promoters i.e. registration, duties of promoters, obligations of
promoters, adherence to sanctioned plans, insurance of real
C estate, payment of penalty, interest and compensation, etc. under
Chapters III and VIII of the Act 2016. This classification between
consumers and promoters is based upon the intelligible differentia
between the rights, duties and obligations cast upon the allottees/
home buyers and the promoters and is in furtherance of the object
D and purpose of the Act to protect the interest of the consumers
vis-a-viz., the promoters in the real estate sector. The promoters
and allottees are distinctly identifiable, separate class of persons
having been differently and separately dealt with under the various
provisions of the Act. Therefore, the question of discrimination
in the first place does not arise which has been alleged as they
E fall under distinct and different categories/classes. [Paras 125,
126][970-E-H]
4.3. Under the present real estate sector which is now being
regulated under the provisions of the Act 2016, the complaint for
refund of the amount of payment which the allottee/consumer
F has deposited with the promoter and at a later stage, when the
promoter is unable to hand over possession in breach of the
conditions of the agreement between the parties, are being
instituted at the instance of the consumer/allotee demanding for
refund of the amount deposited by them and after the scrutiny of
G facts being made based on the contemporaneous documentary
evidence on record made available by the respective parties. The
legislature in its wisdom has intended to ensure that the money
which has been computed by the authority at least must be
safeguarded if the promoter intends to prefer an appeal before

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 923
v. STATE OF UP & ORS. ETC.

the tribunal and in case, the appeal fails at a later stage, it becomes A
difficult for the consumer/allottee to get the amount recovered
which has been determined by the authority and to avoid the
consumer/allottee to go from pillar to post for recovery of the
amount that has been determined by the authority in fact, belongs
to the allottee at a later stage could be saved from all the miseries
B
which come forward against him. [Para 127][971-A-D]
4.4. At the same time, it will avoid unscrupulous and
uncalled for litigation at the appellate stage and restrict the
promoter if feels that there is some manifest material irregularity
being committed or his defence has not been properly appreciated
at the first stage, would prefer an appeal for re-appraisal of the C
evidence on record provided substantive compliance of the
condition of pre-deposit is made over, the rights of the parties
inter se could easily be saved for adjudication at the appellate
stage. [Para 128][971-E]
4.5. There are multiple statutes which provide a condition D
of pre-deposit of a stipulated statutory amount to be deposited
before an appeal is entertained by an appellate forum/tribunal for
reappraisal of facts and law at the appellate stage. The intention
of the instant legislation appears to be that the promoters ought
to show their bona fides by depositing the amount so E
contemplated. [Paras 129, 135][971-F-G; 975-D-E]
4.6. It is indeed the right of appeal which is a creature of
the statute, without a statutory provision, creating such a right
the person aggrieved is not entitled to file the appeal. It is neither
an absolute right nor an ingredient of natural justice, the principles F
of which must be followed in all judicial and quasi-judicial litigations
and it is always be circumscribed with the conditions of grant. At
the given time, it is open for the legislature in its wisdom to enact
a law that no appeal shall lie or it may lie on fulfilment of
precondition, if any, against the order passed by the Authority in
question. [Para 136][975-E-G] G
4.7. The obligation cast upon the promoter of pre-deposit
under Section 43(5) of the Act, being a class in itself, and the
promoters who are in receipt of money which is being claimed by
the home buyers/allottees for refund and determined in the first
H
924 SUPREME COURT REPORTS [2021] 9 S.C.R.

A place by the competent authority, if legislature in its wisdom
intended to ensure that money once determined by the authority
be saved if appeal is to be preferred at the instance of the promoter
after due compliance of pre-deposit as envisaged under Section
43(5) of the Act, in no circumstance can be said to be onerous as
prayed for or in violation of Articles 14 or 19(1)(g) of the
B
Constitution of India. [Para 137][975-G-H; 976-A-B]
Narayan Chandra Ghosh vs. UCO Bank and Others
(2011) 4 SCC 548 : [2011] 3 SCR 1024; Har Devi
Asnani vs. State of Rajasthan and Others (2011) 14 SCC
160 : [2011] 11 SCR 599; Government of Andhra
C Pradesh and Others vs. P. Laxmi Devi (Smt.) (2008) 4
SCC 720 : [2008] 3 SCR 330; State of Haryana vs.
Maruti Udyog Ltd. and Others 2000 (7) SCC 348 :
[2000] 3 Suppl. SCR 185; Shreenath Corporation and
Others vs. Consumer Education and Research Society
D and Others 2014 (8) SCC 657 : [2014] 9 SCR 356;
Tecnimont Pvt. Ltd. (Formerly Known As Tecnimont ICB
Private Limited) vs. State of Punjab and Others AIR
2019 SC 4489 : [2019] 12 SCR 229 – referred to.
5.1 The power of authority to direct the refund of the
E principal amount is explicit in Section 18 and the interest that is
payable is on the principal amount in other words, there is no
interest in the absence of a principal amount being determined
by the competent authority. Further the statute as such is read to
mean that the principal sum with interest has become a composite
amount quantified upon to be recovered as arrears of land
F revenue under Section 40(1) of the Act. [Para 139][976-G-H]
5.2 It is settled principle of law that if the plain
interpretation does not fulfil the mandate and object of the Act,
this Court has to interpret the law in consonance with the spirit
and purpose of the statute. There is indeed a visible inconsistency
G in the powers of the authority regarding refund of the amount
received by the promoter and the provision of law in Section 18
and the text of the provision by which such refund can be referred
under Section 40(1). While harmonising the construction of the

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 925
v. STATE OF UP & ORS. ETC.

scheme of the Act with the right of recovery as mandated in A
Section 40(1) of the Act keeping in mind the intention of the
legislature to provide for a speedy recovery of the amount
invested by the allottee along with the interest incurred thereon
is self-explanatory. However, if Section 40(1) is strictly construed
and it is understood to mean that only penalty and interest on the
B
principal amount are recoverable as arrears of land revenue, it
would defeat the basic purpose of the Act. [Para 140][977-A-C]
5.3 Taking into consideration the scheme of the Act what
is to be returned to the allottee is his own life savings with interest
on computed/quantified by the authority becomes recoverable
and such arrear becomes enforceable in law. There appears some C
ambiguity in Section 40(1) of the Act that by harmonising the
provision with the purpose of the Act, is given effect to the
provisions is allowed to operate rather running either of them
redundant, noticing purport of the legislature and the above-
stated principle into consideration, it is made clear that the amount D
which has been determined and refundable to the allottees/home
buyers either by the authority or the adjudicating officer in terms
of the order is recoverable within the ambit of Section 40(1) of
the Act. [Para 141][977-D-E]
5.4 There is no error in the judgment impugned in the E
appeals. [Para 142][977-F]
Case Law Reference
[1961] 2 SCR 26 referred to Para 43
[2007] 8 SCR 855 referred to Para 48 F
(2019) 19 SCC 529 referred to Para 49
(2020) 9 SCC 1 referred to Para 50
(2020) 10 SCC 783 referred to Para 78
[1950] SCR 621 referred to Para 91 G
[1960] 2 SCR 775 referred to Para 91
[1962] 2 SCR 339 referred to Para 91
[1965] 2 SCR 929 referred to Para 92
H
926 SUPREME COURT REPORTS [2021] 9 S.C.R.

A [1994] 1 Suppl. SCR 626 referred to Para 92
(2015) 16 SCC 542 referred to Para 92
(2012) 13 SCC 501 referred to Para 99
[1978] 3 SCR 131 referred to Para 99
B [2012] 3 SCR 898 referred to Para 99
[2011] 3 SCR 1024 referred to Para 130
[2011] 11 SCR 599 referred to Para 131
[2008] 3 SCR 330 referred to Para 131
C
[2000] 3 Suppl. SCR 185 referred to Para 132
[2014] 9 SCR 356 referred to Para 132
[2019] 12 SCR 229 referred to Para 134
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.6745-
D 6749 of 2021.
From the Judgment and Order dated 29.01.2021 of the High Court
of Judicature at Allahabad, Allahabad Bench, Uttar Pradesh in WRIT C
No.24602, 24604, 26451, 26450 and 26475 of 2020.
With
E
Civil Appeal Nos.6750, 6751, 6752, 6753, 6754, 6755, 6756 And
6757 of 2021.
Kapil Sibal, Sachin Datta, Narender Hooda, Aashish Chopra,
Siddharth Bhatnagar, Gopal Sankaranarayanan, Sr. Advs., Abhimanyu
F Bhandari, Anirudh Bakhru, Ms. Roohe Hina Dua, Ms. Ananya Sikri,
Shalabh Singhal, Sukant Vikram, A. R. Takkar, Ms. Shreya Takkar,
Chritarth Palli, Sahil Tagotra, Ishan Dewan, Lokesh Malik, Anant Singh
Negi, Vishal Maharaj, Abhishek Sharma, Tarun Gupta, Tushar Singh,
Abhikalp Pratap Singh, Ms. Aagam Kaur, Ms. Bhavya Tyagi, Ms. Aadya
Yadav, Parag Maini, Abhimanyu Chopra, Ms. Pankhuri, Sanjeev
G Sachdeva, Raghav Chadha, Rachna Yadav, Manoranjan Sharma, Vineet
Sinha, Keshav Saini, Deeptanshu Jain, Rajesh P., Senthil Jagadeesan,
Ms. Sonakshi Malhan, Ms. Mrinal Kanwar, Abhimanyu Tewari, Ms.
Eliza Bar, Ashray Chopra, Ankit Jaglan, Ardhendumauli Kumar Prasad,
Ms. Taruna Ardhendumauli Prasad, Pranav Proothi, Ashish Madaan,
H Rajan Raj, Ms. Shikha Thakur, Hriday Kochhar, Faisal Sherwani,
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 927
v. STATE OF UP & ORS. ETC.

Surender Singh Hooda, Giriraj Subramanium, Pramod Sharma, Simarpal A
Singh, Raghav Tankha, Prateek K. Chadha, Rangoli Seth, Rakesh Kumar-
I, Rajnish Kumar Singh, Ms. Samvedna Verma, Srijan Mehrotra, Vikas
Goyat, Amit Sahni, Dr. Surender Singh Hooda, Aditya Singh, Anubhav
Singh, Shubham Singh, Ujjal Banerjee, Rakesh Dahiya, Sandeep
Choudhary, Aditya Dahiya, Rajesh P., Swati Dayalan, Ms. Nikita Sharma,
B
Somiran Sharma, Vanshaja Shukla, Shekhar Kumar, Shashank Singh,
Sanyat Lodha, Venkat Rao, Ms. Remya Ronald, Ms. Harshita Singhal,
Vijay Kumar, Chandan Kumar Mandal, Ms. Nandini Gore, Hemant Saini,
Arjun Sharma, Ms. Ratna Priya, Karanveer Singh Anand, Aditya Sidhra,
M/s Karanjawala & Co., Amar Dave, Mahesh Agarwal, Ankur Saigal,
Rishabh Parikh, Yoiit Mehra, E. C. Agrawala, Mohit Paul, Vivek Sethi, C
Ms. Shikha Sarin, Ms. Sunaina Phul, Sumesh Malhotra, Deeptanshu
Sharma, Ravi Prakash, Rohit Priyadarshi, Ms. Nitu Kumari, Aditya
Kumar, Kousik Ghosh, Durga Dutt, Abir Patel, Ms. Garimaa Agrawal,
Ms. Apoorva Kaushik, Shrutanjaya Bhardwaj, Ms. Lavina Bhargawa,
Dhawal Desai, Pranaya Goyal, Kumar Shashwat, Advs. for the Appellant.
D
Tushar Mehta, SG, Ms. Madhavi Divan, ASG, Anil Grover, Sr.
AAG, Ms. Bansuri Swaraj, Ajay Bansal, AAGs, Ms. Garima Prasad,
Devadatt Kamat, K. K. Rai, Ravindra Raizada, Manoj Swarup, Siddhartha
Luthra, Rajiv Atma Ram, Sr. Advs., Rajat Nair, Ms. Neela Kedar Gokhale,
Akshay Amritanshu, Mohd. Akhil, Amrish Kumar, Alok Sangwan, Sumit
Kumar Sharma, Anurag Kulharia, Devashish Bharukha, Ms. Bharti Tyagi, E
Ranbir Singh Yadav, Ms. Anzu K. Varkey, Ms. Pratima Yadav, Nagarkatti
Kartik Uday, Vishnu Anand, Archit Upadhyay, Mudit Gupta, Ms. Avantika
Mishra, Ms. Ayushi Verma, K. K. Mani, Ms. T. Archana, Ms. Manya
Hasija, Sanjay Kumar Visen, Bhanwar Jadon, Pai Amit, Ms. Komal
Mundhra, Saurabh Agrawal, Shantanu Singh, Rajesh Inamdar, Aniket F
Bhattacharya, Ms. Pankhuri Bhardwaj, Sahil Monga, Ms. Aishani Narain,
Ms. Uttara Babbar, Manan Bansal, Ms. Tina Garg, M. K. Ghosh, Rohit
Dutta, Rahul Khurana, Satish Kumar, Ashwani Kumar Dubey, Rudra
Vikram Singh, Manish Kumar, Sanjiv Kumar Balian, Karan Kapur, Ms.
Suruchi Mittal, Abhishek Gautam, Aman Gupta, Parveen Mehta, Piyush
Hans, Ravi Panwar, Narender Kumar Verma, Arjun Singh Bhati, Vikas G
Mehta, Ms. Anshula Vijay Kumar Grover, Saurabroto Dutta, Kushal
Sarkar, Mishra Saurabh, Sreoshi Chatterjee, Shiv Kumar Pandey,
Chandrashekher A. Chakalabbi, Awanish Kumar, Anshul Rai, M/s
Dharmaprabhas Law Associates, Ms. Pallavi Pratap, Varun K. Chopra,
M/s VKC Law Office, Ms. Rashmi Singh, Rajeev Kumar Dubey, H
928 SUPREME COURT REPORTS [2021] 9 S.C.R.

A Ashiwan Mishra, Kamlendra Mishra, Subhash Grover, Santosh Mishra,
Neemani Pant, Avinash Gautam, M. L. Lahoty, Paban K Sharma, Anchit
Sripat, Himanshu Shekhar, Anubhav, Yashwant Singh Yadav, Ms. Preeti
Yadav, Rameshwar Prasad Goyal, Arjun Singh Bhati, Sumit R. Sharma,
Aman Bhatnagar, Aman Preet Singh Rahi, A. Venayagam Balan, Ms.
Anindita Mitra, Ritesh Khatri, Uttam Datt, Ms. Sonakshi Singh, Rishi
B
Raj Sharma, Santosh Krishnan, Nipun Dwivedi, Ms. Ankita Tiwari,
Lakshay Mehta, Akshay Kumar, Krishnan Kumar, Ms. Charu Ambwani,
Ms. Mahua Kalra, Daya Krishan Sharma, Rohit Vats, Vikrant Y. S.
Narula, Shubham Rana, Sumit Mehta, Rabin Majumder, Ms. Mousumi
Roy, Joydeep Mukherjee, Ms. Akansha Srivastava, Rahul Chitnis, Sachin
C Patil, Aaditya A. Pande, Geo Joseph, Abhimanyu Tewari, Ms. Eliza Bar,
Ashray Chopra, Ankit Jaglan, Surender Kumar Rohilla, Ms. Tina Garg,
Bhagoti Singh, Vikrant Y. S. Narula, Sumit Mehta, Ajay Kumar Talesara,
Harish Pandey, Ms. Bharti Tyagi, H. S. Parihar, N. P. Singh, Dr. Kedar
Nath Tripathy, Raghunath Pathak, Sachin Awana, Advs. for the
Respondents.
D
The Judgment of the Court was delivered by
RASTOGI, J.
1. Leave granted.

E 2. The present batch of appeals are filed at the instance of
promoter/real estate developer assailing the common issues and certain
provisions of The Real Estate(Regulation and Development) Act,
2016(hereinafter being referred to as “the Act”), The Uttar Pradesh
Real Estate(Regulation and Development) Rules, 2016 (hereinafter
referred to as “the Rules”) and the functioning of the Uttar Pradesh
F Real Estate Regulatory Authority (hereinafter referred to as “the
Authority”), although being decided by separate orders by the High Court
of Allahabad, since the self-same questions are involved with the consent
are being decided by the present judgment.
3. The respondents herein are the allottees/home buyers who have
G made their substantial investment from their hard earned savings under
the belief that the promotor/real estate developer will hand over possession
of the unit in terms of home buyer’s agreement but their bonafide belief
stood shaken when the promotors failed to hand over possession of a
unit/plot/building in terms of the agreement and complaints were instituted
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 929
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

by the home buyers for refund of the investment made along with interest A
under Section 31 of the Act.
4. The impugned orders came to be passed by the single member
of the authority on the complaint instituted at the instance of the home
buyers/allottees after hearing the parties with the direction to refund the
principal amount along with interest(MCLR + 1%) as prescribed by the B
State Government under the Act. In the ordinary course of business, the
order passed by the authority is appealable under Section 43(5) of the
Act provided the statutory compliance of pre-deposit being made under
proviso to Section 43(5) before the Appellate Tribunal but the promoter/
real estate developers approached the High Court by filing a writ petition
under Articles 226 and 227 of the Constitution questioning the order C
passed by the authority holding it to be without jurisdiction as it has been
passed by a single member of the authority who according to the appellants
holds no jurisdiction to pass such orders of refund of the amount as
contemplated under Section 18 of the Act and have also challenged the
condition of pre-deposit as envisaged under proviso to Section 43(5) of D
the Act for filing of a statutory appeal and raised certain ancillary questions
for consideration in writ jurisdiction of the High Court of Allahabad.
Being aggrieved by the orders passed by the High Court dismissing their
writ petitions, the present batch of appeals have been preferred at the
instance of the promoters/real estate developers.
E
5. Before adverting to the legal submissions made before us, we
consider it appropriate to take a bird’s-eye view of the scheme of the
Act 2016 which may be apposite for proper appreciation of the
submissions made by the parties.
Object and Reasons of the Act 2016 F
6. Over the past two decades, with the growth of population and
the attraction of the people to shift towards urbanization, the demand for
housing increased manifold. Government also introduced various housing
schemes to cope with the increasing demand but the experience shows
that demands of the housing sector could not be meted out by the G
Government at its own level for various reasons to meet the requirement,
the private players entered into the real estate sector in meeting out the
rising demand of housing. Though availability of loans, both from public
and private banks, become easier, still the High rate of interest and the
EMI has posed additional financial burden on the people.
H
930 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 7. At the given time, the real estate and housing sector was largely
unregulated and the consequence was that consumers were unable to
procure complete information for enforced accountability towards builders
and developers in the absence of an effective mechanism in place.
Though, The Consumer Protection Act, 1986 was available to cater the
demand of home buyers in the real estate sector but the experience
B
shows that this mechanism was inadequate to address the needs of the
home buyers and promoters in the real estate sector.
8. At this juncture, the need for Real Estate (Regulation) Bill was
badly felt for establishing an oversight mechanism to enforce
accountability to the real estate sector and providing an adjudicating
C machinery for speedy dispute redressal mechanism and safeguarding
the investments made by the home buyers through legislation to the extent
permissible under the law.
9. The statement of object and reasons of the Act indicates that
the primal position of the regulatory authority is to regulate the real estate
D sector having jurisdiction to ensure compliance with the obligation cast
upon the promoters. The opening statement of objects and reasons which
has a material bearing on the subject reads as follows:-
“The real estate sector plays a catalytic role in fulfilling the need
and demand for housing and infrastructure in the country. While
E this sector has grown significantly in recent years, it has been
largely unregulated, with absence of professionalism and
standardisation and lack of adequate consumer protection. Though
the Consumer Protection Act, 1986 is available as a forum to the
buyers in the real estate market, the recourse is only curative and
F is not adequate to address all the concerns of buyers and promoters
in that sector. The lack of standardisation, has been a constraint
to the healthy and orderly growth of industry. Therefore, the need
to regulating the sector has been emphasised in various forums.
2. In view of the above, it becomes necessary to have a Central
G legislation, namely, the Real Estate (Regulation and Development)
Bill, 2013, in the interest of the effective consumer protection,
uniformity and standardisation of business practices and
transactions in the real estate sector. The proposed Bill provides
for the establishment of the Real estate Regulatory Authority (the
Authority) for regulation and promotion of real estate sector and
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 931
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

to ensure sale of plot, apartment or building, as the case may be, A
in an efficient and transparent manner and to protect the interest
of consumers in real estate sector and establish the Real Estate
Appellate Tribunal to hear appeals from the decisions, directions
or orders of the Authority.”
10. It was introduced with an object to ensure greater accountability B
towards consumers, to significantly reduce frauds & delays and also the
current high transaction costs, and to balance the interests of consumers
and promoters by imposing certain responsibilities on both, and to bring
transparency of the contractual conditions, set minimum standards of
accountability and a fast-track dispute resolution mechanism. It also
proposes to induct professionalism and standardization in the sector, thus C
paving the way for accelerated growth and investments in the long run.
11. Some of the relevant Statement of Objects and Reasons are
extracted as under:-
“4… D
(d) to impose liability upon the promoter to pay such compensation
to the allottees, in the manner as provided under the proposed
legislation, in case if he fails to discharge any obligations imposed
on him under the proposed legislation;
(f) the functions of the Authority shall, inter alia, include – (i) to E
render advice to the appropriate Government in matters relating
to the development of real estate sector; (ii) to publish and maintain
a website of records of all real estate projects for which registration
has been given, with such details as may be prescribed; (iii) to
ensure compliance of the obligations cast upon the promoters, the F
allotees and the real estate agents under the proposed legislation.
…
(i) to appoint an adjudicating officer by the Authority for adjudging
compensation under sections 12, 14 and 16 of the proposed
legislation. G
...”
12. The Bill provides for establishment of the authority for
regulation and promotion of real estate sector, to ensure sale of plot,
apartment or building or sale of real estate project in an efficient and
H
932 SUPREME COURT REPORTS [2021] 9 S.C.R.

A transparent manner and to protect the interest of consumers in the real
estate sector and provide the adjudicating mechanism for speedy dispute
redressal mechanism by establishing the regulatory authority and the
adjudicating officer and in hierarchy, the Appellate Tribunal for early
and prompt disposal of the complaint being instituted primarily by the
home buyers for whom this Act has been enacted by the Parliament in
B
2016.
13. To examine the matter in this perspective, consider what a
house means in India. The data shows that about more than 77% of total
assets of an average Indian household are held in real estate and it’s the
single largest investment of an individual in his lifetime. The real estate
C in India has a peculiar feature. The buyer borrows money to pay for a
house and simultaneously plays the role of a financer as building projects
collect money upfront and this puts the buyer in a very vulnerable position-
the weakest stakeholder with a high financial exposure. The amendment
to the Insolvency and Bankruptcy Code, 2018 recognised the home buyers
D as financial creditors and the present enactment is the most important
regulatory intervention in favour of the home buyers and it’s had an
impact and with passage of time, has become a yardstick of laying down
minimum standards in the market. Earlier, the real estate sector was
completely unregulated and there was no transparency in their business
profile and after the present enactment, it is open for the potential home
E buyers to check if a project is approved under the Act, 2016 that at least
gives a satisfaction to a person who is coming forward in making a
lifetime investment.
14. That apart from the project being statutorily regulated, it
attaches certain authenticity with regard to completion of the project
F and a statutory obligation upon the developer and home buyer to abide
by the terms and conditions of the home buyers agreement and statutory
compliance to the mandate of law. In addition, any project which is
approved under the Act, 2016 helps the promoter in raising funds from
banks and statistics shows that buyers express their satisfaction in
G approved projects which is beneficial not only to the home buyers but to
the promoters and real estate agents as well.
15. Chapter II of the Act relates to the registration of real estate
projects. Section 3 mandates prior registration of real estate projects
including ongoing projects with the Real Estate Regulatory Authority.
H Section 4 prescribes the ingredients of application by the promotor for
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 933
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

registration of real estate projects. In particular, the promotor is required A
to state in the application under sub-section 2(L)(c ) of Section 4, the
timelines for completion of the project. Section 5 relates to the grant of
registration by the authority and inter alia states that no application shall
be rejected unless the applicant has been given an opportunity of being
heard in the matter. As per Section 5(3) of the Act, the registration is co-
B
terminus with the completion of the project. Under Section 6, the authority
can extend registration based on the facts of each case or the occurrence
of the force majeure. Section 7 pertains to revocation of registration. As
per Section 8, the authority is under obligation to inter alia carry out the
remaining development work where there is lapse or revocation of the
registration. C
16. Chapter III lays down, ‘functions and duties of promotor’
which is relevant for the purpose of the present case. Section 11 thereof
elaborates on the functions and duties of the promoters. Under sub-
Section (4) of Section 11, several obligations have been casted upon the
promoters. Under sub-section (5) of Section 11, the promoter may cancel D
the allotment if the allottee/home buyer commits any breach of the terms
of the agreement for sale, and in such case, the aggrieved allottee has
the right to approach the authority.
17. Section 12 provides that if any default being committed by the
promoter, either in reference to the information contained in the notice, E
advertisement or prospectus or on the basis of the model apartment, plot
or building which causes any loss or damage to the allottee/home buyer
by reason of any incorrect or false statement or wants to withdraw from
the project, he shall be compensated by the promoter in the manner as
prescribed under the Act.
F
18. Section 14 relates to adherence to Sanctioned Plans & Project
specification by the promoters and Section 14(3) empowers the allottee
to receive compensation in the event where there is any structural defect.
19. Section 18(1) of the Act spells out the consequences if the
promoter fails to complete or is unable to give possession of an apartment, G
plot or building either in terms of the agreement for sale or to complete
the project by the date specified therein or on account of discontinuance
of his business as a developer either on account of suspension or
revocation of the registration under the Act or for any other reason, the
allottee/home buyer holds an unqualified right to seek refund of the amount
with interest at such rate as may be prescribed in this behalf. H
934 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 20. Section 18(2) of the Act mandates that in case, loss is caused
to allottee due to defective title of the land, on which the project is being
developed or has been developed, the promoter shall compensate the
allottee and such claim for compensation under Section 18(2) shall not
be barred by limitation provided under any law for the time being in
force.
B
21. Section 18(3) of the Act states that where the promoter fails
to discharge any other obligation under the Act or the rules or regulations
framed thereunder or in accordance with the terms and conditions of
the agreement for sale, the promoter shall be liable to pay ‘such
compensation’ to the allottees, in the manner as prescribed under the
C Act.
22. If we take a conjoint reading of sub-sections (1), (2) and (3)
of Section 18 of the Act, the different contingencies spelt out therein,
(A) the allottee can either seek refund of the amount by withdrawing
from the project; (B) such refund could be made together with interest
D as may be prescribed; (C) in addition, can also claim compensation
payable under Sections 18(2) and 18(3) of the Act; (D) the allottee has
the liberty, if he does not intend to withdraw from the project, will be
required to be paid interest by the promoter for every months’ delay in
handing over possession at such rates as may be prescribed.
E 23. Correspondingly, Section 19 of the Act spells out “Rights and
duties of allottees”. Section 19(3) makes the allottee entitled to claim
possession of the apartment, plot or building, as the case may be. Section
19(4) provides that if the promoter fails to comply or being unable to
give possession of the apartment, plot or building in terms of the agreement,
F it makes the allottees entitled to claim the refund of amount paid along
with interest and compensation in the manner prescribed under the Act.
24. Section 19(4) is almost a mirror provision to Section 18(1) of
the Act. Both these provisions recognize right of an allottee two distinct
remedies, viz, refund of the amount together with interest or interest for
G delayed handing over of possession and compensation.
25. The unqualified right of the allottee to seek refund referred
under Section 18(1)(a) and Section 19(4) of the Act is not dependent on
any contingencies or stipulations thereof. It appears that the legislature
has consciously provided this right of refund on demand as an unconditional
absolute right to the allottee, if the promoter fails to give possession of
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 935
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

the apartment, plot or building within the time stipulated under the terms A
of the agreement regardless of unforeseen events or stay orders of the
Court/Tribunal, which is in either way not attributable to the allottee/
home buyer, the promoter is under an obligation to refund the amount on
demand with interest at the rate prescribed by the State Government
including compensation in the manner provided under the Act with the
B
proviso that if the allottee does not wish to withdraw from the project, he
shall be entitled for interest for the period of delay till handing over
possession at the rate prescribed.
26. If we turn to the power of the authority, it envisages under
Section 31, the complaints can be filed either with the authority or
adjudicating officer for violation or contravention of the provisions of the C
Act or the rules and regulations framed thereunder. Such complaint can
be filed against “any promoter, allottee or real estate agent”, as the case
may be, and can be filed by “any aggrieved person”, and it has to be
read with an explanation, “person” includes an association of allottees
or any voluntary consumer association registered under any law for the D
time being in force. The form and manner in which complaint is to be
instituted has been provided under sub-section(2) of Section 31.
27. Section 32 refers to functions of the authority for promotion
of real estate sector and Sections 34 to 38 of the Act recognize different
nature of powers and functions of the authority regarding compliance of E
its regulations cast upon the promoters, allottee or the real estate agents
and to appoint one or more persons to make an inquiry into the affairs of
any promoter, allottee or the real estate agent and to pass any interim
orders, if the promoter, allottee or real estate agent is failing in discharging
of its functions under the Act, rules or regulations, and to issue directions
from time to time to the promoter, allottee or real estate agents, if F
considered necessary can impose penalty or interest if failed to carry
out its obligations.
28. At the same time, Chapter VIII of the Act talks about offences,
penalties and adjudication. Various kinds of penalties are set out in Sections
59 to 68. Each of these provisions clearly states that the penalty G
thereunder is required to be determined by the authority.
29. We are concerned with Section 71 of the Act titled ‘power to
adjudicate’ which is specific to the adjudicating officer. Sub-section(1)
of Section 71 opens with the words “for the purpose of adjudging
H
936 SUPREME COURT REPORTS [2021] 9 S.C.R.

A compensation under Sections 12, 14, 18 and 19”, the Authority has to
appoint in consultation with the appropriate Government, a judicial officer
not below the rank of the District Judge, as an adjudicating officer, to
hold inquiry in the prescribed manner after giving a person concerned a
reasonable opportunity of hearing. At the same time, sub-section (2)
casts an obligation upon the adjudicating officer that while adjudging
B
compensation under sub-section (1), the application has to be dealt with
expeditiously as possible and to be disposed of within 60 days. If there is
a delay being caused exceeding the statutory period of 60 days, in disposal
of the application, reasons are to be recorded for extension of the period.
30. Under sub-section (3) of Section 71, the adjudicating officer
C has been empowered not only to summon and enforce the attendance of
persons acquainted with the facts and circumstances of the case to give
evidence or to produce any document which may be useful and relevant
for adjudication, is supposed to take note of the various parameters as
referred to under Section 72 which still is illustrative and not exhaustive
D while adjudging the quantum of compensation payable to the person
aggrieved and interest, as the case may be.
31. After we have heard learned counsel for the parties at length,
the following questions emerges for our consideration in the present
batch of appeals are as under:-
E 1. Whether the Act 2016 is retrospective or retroactive in its
operation and what will be its legal consequence if tested on the anvil of
the Constitution of India?
2. Whether the authority has jurisdiction to direct return/refund of
the amount to the allottee under Sections 12, 14, 18 and 19 of the Act or
F the jurisdiction exclusively lies with the adjudicating officer under Section
71 of the Act?
3. Whether Section 81 of the Act authorizes the authority to
delegate its powers to a single member of the authority to hear complaints
instituted under Section 31 of the Act?
G
4. Whether the condition of pre-deposit under proviso to Section
43(5) of the Act for entertaining substantive right of appeal is sustainable
in law?
5. Whether the authority has power to issue recovery certificate
for recovery of the principal amount under Section 40(1) of the Act?
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 937
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

Question 1:- Whether the Act 2016 is retrospective or A
retroactive in its operation and what will be its legal consequence if
tested on the anvil of the Constitution of India?
32. The issue concerns the retroactive application of the provisions
of the Act 2016 particularly, with reference to the ongoing projects. If
we take note of the objects and reasons and the scheme of the Act, it B
manifests that the Parliament in its wisdom after holding extensive
deliberation on the subject thought it necessary to have a central legislation
in the paramount interest for effective consumer protection, uniformity
and standardisation of business practices and transactions in the real
estate sector, to ensure greater accountability towards consumers, to
overcome frauds and delays and also the higher transaction costs, and C
accordingly intended to balance the interests of consumers and promoters
by imposing certain duties and responsibilities on both. The deliberation
on the subject was going on since 2013 but finally the Act was enacted
in the year 2016 with effect from 25th March, 2016.
33. Under Chapter II of the Act 2016, registration of real estate D
projects became mandatory and to make the statute applicable and to
take its place under sub-Section (1) of Section 3, it was made statutory
that without registering the real estate project with a real estate regulatory
authority established under the Act, no promoter shall advertise, market,
book, sell or offer for sale, or invite persons to purchase in any manner E
a plot, apartment or building, as the case may be in any real estate project
but with the aid of proviso to Section 3(1), it was mandated that such of
the projects which are ongoing on the date of commencement of the Act
and more specifically the projects to which the completion certificate
has not been issued, such promoters shall be under obligation to make an
application to the authority for registration of the said project within a F
period of three months from the date of commencement of the Act.
With certain exemptions being granted to such of the projects covered
by sub-section (2) of Section 3 of the Act, as a consequence, all such
home buyers agreements which has been executed by the parties inter
se has to abide the legislative mandate in completion of their ongoing G
running projects.
34. The term “ongoing project” has not been so defined under the
Act while the expression “real estate project” is defined under Section
2(zn) of the Act which reads as under:-
H
938 SUPREME COURT REPORTS [2021] 9 S.C.R.

A “2(zn) “real estate project” means the development of a building
or a building consisting of apartments, or converting an existing
building or a part thereof into apartments, or the development of
land into plots or apartments, as the case may be, for the purpose
of selling all or some of the said apartments or plots or building, as
the case may be, and includes the common areas, the development
B
works, all improvements and structures thereon, and all easement,
rights and appurtenances belonging thereto;”
35. The Act is intended to comply even to the ongoing real estate
project. The expression “ongoing project” has been defined under Rule
2(h) of the Uttar Pradesh Real Estate (Regulation and Development)
C Rules, 2016 which reads as under:-
“2(h) “Ongoing project” means a project where development is
going on and for which completion certificate has not been issued
but excludes such projects which fulfil any of the following criteria
on the date of notification of these rules:
D
(i) where services have been handed over to the Local Authority
for maintenance.
(ii) where common areas and facilities have been handed over to
the Association for the Residents’ Welfare Association for
E maintenance.
(iii) where all development work have been completed and sale/
lease deeds of sixty percent of the apartment/houses/plots have
been executed.
(iv) where all development works have been completed and
F application has been filed with the competent authority for issue
of completion certificate.”
36. The expression “completion certification” has been defined
under Section 2(q) and “occupancy certificate” under Section 2(zf) of
the Act which reads as under:-
G “2(q) “completion certificate” means the completion certificate,
or such other certificate, by whatever name called, issued by the
competent authority certifying that the real estate project has been
developed according to the sanctioned plan, layout plan and
specifications, as approved by the competent authority under the
H local laws;
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 939
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

2(zf) “occupancy certificate” means the occupancy certificate, A
or such other certificate, by whatever name called, issued by the
competent authority permitting occupation of any building, as
provided under local laws, which has provision for civic
infrastructure such as water, sanitation and electricity;”
37. Looking to the scheme of Act 2016 and Section 3 in particular B
of which a detailed discussion has been made, all “ongoing projects”
that commence prior to the Act and in respect to which completion
certificate has not been issued are covered under the Act. It manifests
that the legislative intent is to make the Act applicable not only to the
projects which were yet to commence after the Act became operational
but also to bring under its fold the ongoing projects and to protect from C
its inception the inter se rights of the stake holders, including allottees/
home buyers, promoters and real estate agents while imposing certain
duties and responsibilities on each of them and to regulate, administer
and supervise the unregulated real estate sector within the fold of the
real estate authority. D
38. The emphasis of Mr. Kapil Sibal, learned senior counsel for
the appellant is that the agreement of sale was executed in the year
2010-11, i.e. much before the coming into force of the Act and the present
Act has retrospective application and registration of ongoing project under
the Act would be in contravention to the contractual rights established E
between the promoter and allottee under the agreement for sale executed
which is impermissible in law and further submits that Sections 13, 18(1),
19(4) of the Act 2016 to the extent of their retrospective application is in
violation of Articles 14, 19(1)(g) of the Constitution of India.
39. Mr. Tushar Mehta, learned Solicitor General, on the other F
hand, submits that a bare perusal of the object and reasons manifest that
the Act does not take away the substantive jurisdiction, rather it protects
the interest of homebuyers where project/possession is delayed and
further submits that the scheme of the Act has retroactive application,
which is permissible under the law. The provisions make it clear that it
operates in future, however, its operation is based upon the character G
and status which have been done earlier and the presumption against
retrospectivity in this case is ex-facie rebuttable. The literal interpretation
of the statute manifest that it has not made any distinction between the
“existing” real estate projects and “new” real estate projects as has
been defined under Section 2(zn) of the Act. H
940 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 40. Learned counsel further submits that the key word, i.e.,
“ongoing on the date of the commencement of this Act” by necessary
implication, ex-facie and without any ambiguity, means and includes those
projects which were ongoing and in cases where only issuance of
completion certificate remained pending, legislature intended that even
those projects have to be registered under the Act. Therefore, the ambit
B
of Act is to bring all projects under its fold, provided that completion
certificate has not been issued. The case of the appellant is based on
“occupancy certificate” and not of “completion certificate”. In this
context, learned counsel submits that the said proviso ought to be read
with Section 3(2)(b), which specifically excludes projects where
C completion certificate has been received prior to the commencement of
the Act. Thus, those projects under Section 3(2) need not be registered
under the Act and, therefore, the intent of the Act hinges on whether or
not a project has received a completion certificate on the date of
commencement of the Act.
D 41. The clear and unambiguous language of the statute is retroactive
in operation and by applying purposive interpretation rule of statutory
construction, only one result is possible, i.e., the legislature consciously
enacted a retroactive statute to ensure sale of plot, apartment or building,
real estate project is done in an efficient and transparent manner so that
the interest of consumers in the real estate sector is protected by all
E means and Sections 13, 18(1) and 19(4) are all beneficial provisions for
safeguarding the pecuniary interest of the consumers/allottees. In the
given circumstances, if the Act is held prospective then the adjudicatory
mechanism under Section 31 would not be available to any of the allottee
for an on-going project. Thus, it negates the contention of the promoters
F regarding the contractual terms having an overriding effect over the
retrospective applicability of the Act, even on facts of this case.
42. What the provision further emphasizes is that a promoter of a
project which is not complete/sans completion certificate shall get the
project registered under the Act but while getting the project registered,
G promoter is under an obligation to prescribe fresh timelines for getting
the remaining development work completed and from the scheme of the
Act, we do not find that the first proviso to Section 3(1) in any manner is
either violative of Articles 14 and 19(1)(g) of the Constitution of India.
The Parliament is always competent to enact any law affecting the
antecedent events under its fold within the parameters of law.
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 941
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

43. In State of Bombay (Now Maharashtra) versus Vishnu A
Ramchandra1, this Court observed that if the part of requisites for
operation of the statute were drawn from a time antecedent to its passing,
it did not make the statute retrospective so long as the action was taken
after the Act came into force.
44. To meet out different nature of exigencies, it was noticed by B
the Parliament that Pan India, large number of real estate projects where
the allottees did not get possession for years together and complaints
being filed before different forums including under the Consumer
Protection Act has failed to deliver adequate/satisfactory results to the
consumer/allottees and their life savings is locked in and sizable sections
of allottees had invested their hard-earned money, money obtained through C
loans or financial institutions with the belief that they will be able to get
a roof in the form of their apartments/flats/unit.
45. At the given time, there was no law regulating the real estate
sector, development works/obligations of promoter and allottee, it was
badly felt that such of the ongoing projects to which completion certificate D
has not been issued must be brought within the fold of the Act 2016 in
securing the interests of allottees, promoters, real estate agents in its
best possible way obviously, within the parameters of law. Merely because
enactment as prayed is made retroactive in its operation, it cannot be
said to be either violative of Articles 14 or 19(1)(g) of the Constitution of E
India. To the contrary, the Parliament indeed has the power to legislate
even retrospectively to take into its fold the pre-existing contract and
rights executed between the parties in the larger public interest.
46. The consequences for breach of such obligations under the
Act are prospective in operation and in case ongoing project, of which F
completion certificate is not obtained, are not to be covered under the
Act, there is every likelihood of classifications in respect of
underdeveloped ongoing project and the new project to be commenced.
47. The legislative power to make the law with prospective/
retrospective effect is well recognized and it would not be permissible G
for the appellants/promoters to say that they have any vested right in
dealing with the completion of the project by leaving the allottees in
lurch, in a helpless and miserable condition that at least may not be
acceptable within the four corners of law.
1
AIR 1961 SC 307 H
942 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 48. The distinction between retrospective and retroactive has been
explained by this Court in Jay Mahakali Rolling Mills Vs. Union of
India and Others2, which reads as under:-
“8. ”Retrospective” means looking backward, contemplating what
is past, having reference to a statute or things existing before the
B statute in question. Retrospective law means a law which looks
backward or contemplates the past; one, which is made to affect
acts or facts occurring, or rights occurring, before it comes into
force. Retroactive statute means a statute, which creates a new
obligation on transactions or considerations or destroys or impairs
vested rights.”
C
49. Further, this Court in Shanti Conductors Private Limited
and Another Vs. Assam State Electricity Board and Others3, held as
under:-
“67. Retroactivity in the context of the statute consists of
D application of new rule of law to an act or transaction which has
been completed before the rule was promulgated.
68. In the present case, the liability of buyer to make payment
and day from which payment and interest become payable under
Sections 3 and 4 does not relate to any event which took place
E prior to the 1993 Act, it is not even necessary for us to say that
the 1993 Act is retroactive in operation. The 1993 Act is clearly
prospective in operation and it is not necessary to term it as
retroactive in operation. We, thus, do not subscribe to the opinion
dated 31-8-2016 [Shanti Conductors (P) Ltd. v. Assam SEB,
(2016) 15 SCC 13] of one of the Hon’ble Judges holding that the
F 1993 Act is retroactive.”
50. In the recent judgment of this Court rendered in the case of
Vineeta Sharma Vs. Rakesh Sharma and Others4 wherein, this Court
has interpreted the scope of Section 6(1) of the Hindu Succession Act,
1956, the law of retroactive statute held as under:-
G
“61. The prospective statute operates from the date of its
enactment conferring new rights. The retrospective statute
operates backwards and takes away or impairs vested rights
2
2007(12) SCC 198
3
2019(19) SCC 529
4
H 2020(9) SCC 1
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 943
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

acquired under existing laws. A retroactive statute is the one that A
does not operate retrospectively. It operates in futuro. However,
its operation is based upon the character or status that arose earlier.
Characteristic or event which happened in the past or requisites
which had been drawn from antecedent events. Under the
amended Section 6, since the right is given by birth, that is, an
B
antecedent event, and the provisions operate concerning claiming
rights on and from the date of the Amendment Act.”
51. Thus, it is clear that the statute is not retrospective merely
because it affects existing rights or its retrospection because a part of
the requisites for its action is drawn from a time antecedent to its passing,
at the same time, retroactive statute means a statute which creates a C
new obligation on transactions or considerations already passed or destroys
or impairs vested rights.
52. The Parliament intended to bring within the fold of the statute
the ongoing real estate projects in its wide amplitude used the term
“converting and existing building or a part thereof into apartments” D
including every kind of developmental activity either existing or upcoming
in future under Section 3(1) of the Act, the intention of the legislature by
necessary implication and without any ambiguity is to include those
projects which were ongoing and in cases where completion certificate
has not been issued within fold of the Act. E
53. That even the terms of the agreement to sale or home buyers
agreement invariably indicates the intention of the developer that any
subsequent legislation, rules and regulations etc. issued by competent
authorities will be binding on the parties. The clauses have imposed the
applicability of subsequent legislations to be applicable and binding on F
the flat buyer/allottee and either of the parties, promoters/home buyers
or allottees, cannot shirk from their responsibilities/liabilities under the
Act and implies their challenge to the violation of the provisions of the
Act and it negates the contention advanced by the appellants regarding
contractual terms having an overriding effect to the retrospective
applicability of the Authority under the provisions of the Act which is G
completely misplaced and deserves rejection.
54. From the scheme of the Act 2016, its application is retroactive
in character and it can safely be observed that the projects already
completed or to which the completion certificate has been granted are
not under its fold and therefore, vested or accrued rights, if any, in no H
944 SUPREME COURT REPORTS [2021] 9 S.C.R.

A manner are affected. At the same time, it will apply after getting the on-
going projects and future projects registered under Section 3 to
prospectively follow the mandate of the Act 2016.
Question no. 2: Whether the authority has jurisdiction to
direct return/refund of the amount to the allottee under Sections 12,
B 14, 18 and 19 of the Act or the jurisdiction exclusively lies with the
adjudicating officer under Section 71 of the Act?
55. Before examining the question, we have to take a holistic
view of the scheme of the Act along with the rules/regulations framed
by the Authority in exercise of its powers under Sections 84 and 85 of
C the Act that postulates certain functions and duties to the promoter of
the real estate project and its entailing consequences if the promoter
fails to fulfil his obligations defined under Chapter III. Some of the
obligations are spelt out in Sections 12, 14, 18 and 19 of the Act.
56. Section 12 which falls for consideration in these petitions reads
D as follows:
“12. Where any person makes an advance or a deposit on the
basis of the information contained in the notice advertisement or
prospectus, or on the basis of any model apartment, plot or building,
at the case may be, and sustains any loss or damage by reason of
E any incorrect, false statement included therein, he shall be
compensated by the promoter in the manner as provided
under this Act:”
Provided that if the person affected by such incorrect, false
statement contained in the notice, advertisement or prospectus,
F or the model apartment, plot or building, as the case may be, intends
to withdraw from the proposed project, he shall be returned his
entire investment along with interest at such rate as may be
prescribed and the compensation in the manner provided
under this Act.”
57. Section 14 relates to adherence to sanctioned plans and project
G
specifications by the promoter. Section 14(3) empowers the allottee to
receive compensation in the event there is any structural defect or any
other defect in workmanship etc. Section 14(3) reads as under:
“(3) In case any structural defect or any other defect in
workmanship, quality or provision of services or any other
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 945
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

obligations of the promoter as per the agreement for sale relating A
to such development is brought to the notice of the promoter within
a period of five years by the allottee from the date of handing
over possession, it shall be the duty of the promoter to rectify
such defects without further charge, within thirty days, and in the
event of promoter’s failure to rectify such defects within such
B
time, the aggrieved allottees shall be entitled to receive appropriate
compensation in the manner as provided under this Act.”
58. Section 18 starts with the marginal note “Return of amount
and compensation”. The two aspects namely ‘return of amount’ and
‘compensation’ are distinctly delineated. Section 18 reads as follows:
C
18.(1) If the promoter fails to complete or is unable to give
possession of an apartment, plot or building,-
(a) in accordance with the terms of the agreement for sale or,
as the case may be, duly completed by the date specified
therein; or D
(b) due to discontinuance of his business as a developer on
account of suspension or revocation of the registration under
this Act or for any other reason,
he shall be liable on demand to the allottees, in case the
allottee wishes to withdraw from the project, without E
prejudice to any other remedy available, to return the
amount received by him in respect of that apartment, plot,
building, as the case may be, with interest at such rate as
may be prescribed in this behalf including compensation in
the manner as provided under this Act: F
Provided that where an allottee does not intend to withdraw from
the project, he shall be paid, by the promoter, interest for every
month of delay, till the handing over of the possession, at such
rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of any G
loss caused to him due to defective title of the land, on which the
project is being developed or has been developed, in the manner
as provided under this Act, and the claim for compensation under
this subsection shall not be barred by limitation provided under
any law for the time being in force.
H
946 SUPREME COURT REPORTS [2021] 9 S.C.R.

A (3) If the promoter fails to discharge any other obligations imposed
on him under this Act or the rules or regulations made thereunder
or in accordance with the terms and conditions of the agreement
for sale, he shall be liable to pay such compensation to the
allottees, in the manner as provided under this Act.
B (emphasis supplied)
59. Chapter IV deals with the rights and duties of the allottees
and in particular, Section 19(4) entitles the allottees to a refund of the
amount paid. Section 19(4) reads as follows:-
“(4) The allottee shall be entitled to claim the refund of amount
C paid along with interest at such rate as may be prescribed and
compensation in the manner as provided under this Act
from the promoter, if the promoter fails to comply or is unable to
give possession of the apartment, plot or building, as the case may
be, in accordance with the terms of agreement for sale or due to
D discontinuance of his business as a developer on account of
suspension or revocation of his registration under the provisions
of this Act or the rules or regulations made thereunder.”
60. Section 31 relates to the filing of complaints to the authority
and reads as follows:
E 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
F regulations made thereunder, against any promoter, allottee or real
estate agent, as the case may be.
Explanation—For the purpose of this sub-section “person” shall
include the association of allottees or any voluntary consumer
association registered under any law for the time being in force.
G (2) The form, manner and fees for filing complaint under sub-
section (1) shall be such as may be prescribed.
61. Section 71 relates to Power to Adjudicate vested with the
adjudicating officer while adjudging compensation which reads as follows:

H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 947
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

71. Power to adjudicate.— A
(1) For the purpose of adjudging compensation under
sections 12, 14, 18 and section 19, the Authority shall
appoint, in consultation with the appropriate Government,
one or more judicial officer as deemed necessary, who is or
has been a District Judge to be an adjudicating officer for B
holding an inquiry in the prescribed manner, after giving any person
concerned a reasonable opportunity of being heard:
Provided that any person whose complaint in respect of matters
covered under sections 12, 14, 18 and section 19 is pending before
the Consumer Disputes Redressal Forum or the Consumer C
Disputes Redressal Commission or the National Consumer
Redressal Commission, established under Section 9 of the
Consumer Protection Act, 1986 (68 of 1986), on or before the
commencement of this Act, he may, with the permission of such
Forum or Commission, as the case may be, withdraw the complaint
pending before it and file an application before the adjudicating D
officer under this Act.
(2) The application for adjudging compensation under sub-
section (1), shall be dealt with by the adjudicating officer as
expeditiously as possible and dispose of the same within a period
of sixty days from the date of receipt of the application: Provided E
that where any such application could not be disposed of within
the said period of sixty days, the adjudicating officer shall record
his reasons in writing for not disposing of the application within
that period.
(3) While holding an inquiry the adjudicating officer shall have F
power to summon and enforce the attendance of any person
acquainted with the facts and circumstances of the case to give
evidence or to produce any document which in the opinion of the
adjudicating officer, may be useful for or relevant to the subject
matter of the inquiry and if, on such inquiry, he is satisfied that the G
person has failed to comply with the provisions of any of the
sections specified in sub-section (1), he may direct to pay such
compensation or interest, as the case any be, as he thinks fit in
accordance with the provisions of any of those sections.

H
948 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 62. The broad factors to be considered while adjudging
compensation have been provided under Section 72 which reads as
under:-
“72. While adjudging the quantum of compensation or
interest, as the case may be, under section 71, the
B adjudicating officer shall have due regard to the following
factors, namely:—
(a) the amount of disproportionate gain or unfair advantage,
wherever quantifiable, made as a result of the default;
(b) the amount of loss caused as a result of the default;
C
(c) the repetitive nature of the default;
(d) such other factors which the adjudicating officer considers
necessary to the case in furtherance of justice.”
63. The Uttar Pradesh Real Estate Regulatory Authority in exercise
D of its power under Section 85 of the Act 2016 has framed its regulations
on 27th February, 2019 called as Uttar Pradesh Real Estate Regulatory
Authority(General) Regulations, 2019 (hereinafter being referred to as
“Regulations 2019”).
64. Regulations 18 to 23 deal with meetings of the authority, other
E than adjudication proceedings. Regulation 24 falls in the chapter of
“Adjudicatory Proceedings” and reads as follows:-
“24(a) For adjudication proceedings with respect to complaints
filed with the Authority, the Authority may, by order, direct that
specific matters or issues be heard and decided by a single bench
F of either the Chairperson or any Member of the Authority.
(b) The Authority, in consultation with the state government, will
appoint Adjudicating Officers on the Panel of U.P. RERA for the
purposes of adjudicating the matters of compensation admissible
under the Act.
G (c) The aggrieved persons will be required to file complaints before
the Authority online in form – M. The Claims of compensation
will also be included in form – M itself. While the Authority will
decide all the questions of breaches of the Act, Rules and
Regulations, it will refer the question relating to the adjudication
of compensation to one of the Adjudicating Officers on the Panel
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 949
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

of U.P. RERA who will then decide the matter expeditiously and A
preferably within 60 days.
(d) The Adjudicating Officers on the Panel of U.P. RERA will
hold their courts at Lucknow or Gautam Buddhnagar as decided
by the chairman. The complaints relating to the districts of NCR
will be heard at Gautam Buddhnagar whereas complaints from
B
the remaining districts of the State will be heard at Lucknow.
65. The complaint before the regulatory authority for any violation
of the Act or rules or regulations made thereunder by an aggrieved person
has to be submitted in Form (M) as per the procedure prescribed under
Rule 33(1) which the regulatory authority has to follow. At the same
time, any person who is aggrieved to claim compensation under Sections C
12, 14, 18 and 19 has to submit his compliant in Form (N) for adjudging
compensation as per the procedure provided under Section 71(3) of the
Act taking into consideration the factors indicated under Section 72 and
in the manner provided under Rule 34(1) of the Rules 2016.
66. Rules 33(1) and 34(1) of the Uttar Pradesh Real D
Estate(Regulation and Development) Rules, 2016 which is relatable to
the adjudicatory powers of the regulatory authority/adjudicating officer
reads as follows:-
“33(1) Any aggrieved person may file a complaint with the
regulatory authority for any violation under the Act or the rules
and regulations made thereunder, save as those provided to be E
adjudicated by the adjudicating officer, in Form ‘M’ which shall
be accompanied by a fee of rupees one thousand in the form of a
demand draft drawn on a nationalized bank in favour of regulatory
authority and payable at the main branch of that bank at the station
where the seat of the said regulatory authority is situated.
F
Explanation:- For the purpose of this sub-rule “person” shall include
the association of allottees or any voluntary consumer association
registered under any law or the time being in force.
34(1) Any aggrieved person may file a complaint with the
adjudicating officer for compensation under Sections 12, 14, 18
and 19 in Form N which shall be accompanied by a fee of rupees G
one thousand in the form of a demand draft drawn on a nationalized
bank in favour of regulatory authority and payable at the main
branch of that bank at the station where the rest of the said
regulatory authority is situated.”
(emphasis supplied) H
950 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 67. Rule 33(2) of the Rules 2016 delineates the procedure which
the authority has to follow in making inquiry to the allegations or violations
of the provisions of the Act, rules and regulations. At the given time,
Rule 34(2) delineates the procedure to be followed by the adjudicating
officer while adjudging quantum of compensation and interest which the
person aggrieved is entitled for under the provisions of the Act.
B
68. Mr. Kapil Sibal, learned senior counsel for the appellants
submits that both the ‘authority’ and the ‘adjudicating officer’ operate in
completely distinct spheres. The authority and the adjudicating officer
are defined under Sections 2(i) and 2(a) of the Act and are, therefore,
creature of statute and their powers and respective jurisdiction(s) are
C explicitly delineated in the statute itself.
69. The adjudicating officer under Section 71 is specifically vested
with the jurisdiction to adjudicate complaints under Sections 12,14,18 &
19 of the Act 2016. In disposing of such complaints, the adjudicating
officer alone is empowered under Section 71(3) to conduct enquiry and
D direct the payment of refund as well as compensation and interest, as
the case may be, in taking note of the broad parameters enumerated in
Section 72 and such complaints are to be statutorily disposed of within
60 days failing which the reasons are to be recorded.
70. According to the learned counsel for the appellants, proviso to
E Section 71(1), the jurisdiction to adjudicate complaints under Sections
12, 14, 18 and 19 which were earlier pending before the authority
established under the Consumer Protection Act, 1986 stands vested with
the adjudicating officer. According to him, the legislative intent is clear
and unambiguous that the complaints emanating from the bundle of rights
F which flow from Sections 12, 14, 18 and 19 including the cause of action
for refund and interest be withdrawn from the forums established under
the Consumer Protection Act and in turn be filed before and adjudicated
by the Adjudicating Officer under this Act and that being the legislative
intent, matters arising under Sections 12, 14, 18 and 19 would be examined
and adjudicated exclusively by the adjudicating officer as mandated by
G law.
71. Per contra, Ms. Madhavi Divan, learned senior counsel for
the respondents while supporting the findings recorded by the High Court
in the impugned judgment submits that the Act provides distinct remedies,
i.e., ‘return of amount/investment’ on the one hand and ‘compensation’
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 951
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

on the other, to be determined separately. According to her, the right to A
refund on demand is a statutory right, fundamentally, contextually and
conceptually distinct from the right to receive compensation. While the
right to refund emanates from the Legislature’s recognition of the fact
that homebuyers are “out of pocket” financial creditors, the right to
compensation seeks to make amends for injury or loss.
B
72. Thus, refund and compensation are two distinct rights under
the Act and cannot be conflated. The manner in which the two are to be
determined would require a different process and involve different
considerations. According to her, the determination of compensation
involves a full-fledged adjudicatory process which is more complex than
that involved in determining refund. To do so, it would tantamount to C
regressing into the very malaise that the legislature intended to liberate
the allottees-homebuyers. The result of conflating the rights and/or
relegating the allottees to the adjudicating officer would amount to a
compromise of the timeliness of the right to refund on demand. It would
also deter and daunt allottees from seeking compensation because in the D
process the remedies would be clubbed and the availability of refund
would get relatively delayed as compensation requires a more elaborate
adjudication process (even though the same is required to be completed
in 60 days). The authority to determine a claim for refund on demand
while the adjudicating officer to determine the claim for compensation.
E
73. The expression “on demand” which follows the right to “return
of amount” is indicative of the priority, immediacy and expediency which
is accorded to the right to refund. Thus, according to her, the expressions
“refund” and “return of amount” is an act of restitution, and the obligation
to restitute lies on the person or the authority that has received unjust
enrichment or unjust benefit. F
74. Learned counsel further submits that in order to give full effect
to the letter and spirit of the right to refund in the context explained
above, there can be no doubt that the determination of the right to refund
must be left to the authority whereas the adjudication for adjudging
compensation with the adjudicating officer as reflected under Section G
71 of the Act. According to the learned counsel, the authority is fully
seized with the standard agreements entered into between the promoters
and the allottees, and therefore, is best equipped to determine the extent
of delay, if any. Therefore, refund claims can most conveniently and
effectively be dealt with by the authority and interest on refund is available
H
952 SUPREME COURT REPORTS [2021] 9 S.C.R.

A at the rate prescribed by the appropriate Government. In the instant
batch of matters, the prescribed rate of interest is (MCLR + 1%), which
has been notified by the Government of Uttar Pradesh.
75. The legislature in its wisdom has made a specific provision
delineating power to be exercised by the regulatory authority/adjudicating
B officer. “Refund of the amount” and “compensation” are two distinct
components which the allottee or the person aggrieved is entitled to
claim if the promoter has not been able to hand over possession with a
nature of enquiry and mechanism provided under the Act. So far as the
claim with respect to refund of amount on demand under Sections 18(1)
and 19(4) of the Act is concerned, it vests within the jurisdiction of the
C regulatory authority. Section 71 carves out the jurisdiction of the
adjudicating officer to adjudge compensation under Sections 12, 14, 18
and 19 after holding enquiry under Section 71(3) of the Act keeping in
view the broad contours referred to under Section 72 of the Act.
76. The submission made by learned counsel for the appellants
D that the proviso under Section 71(1) empowers the adjudicating officer
to examine the complaints made under Sections 12, 14, 18 and 19 pending
before the Consumer Disputes Redressal Forum/Commission is in
different context and it was one time mechanism to provide a window to
the consumers whose composite claims are pending before the Consumer
Forum/Commission to avail the benevolent provision of the Act 2016 for
E the reason that under the Consumer Protection Act, there is no distinction
as to whether the complaint is for refund of the amount or for
compensation as defined under Section 71(1) of the Act, but after the
Act 2016 has come into force, if any person aggrieved wants to make
complaint for refund against the promotor or real estate agent other than
F compensation, it is to be lodged to the regulatory authority and for
adjudging compensation to the adjudicating officer, and the delineation
has been made to expedite the process of adjudication invoked by the
person aggrieved when a complaint has been made under Section 31 of
the Act to be adjudicated either by the authority/adjudicating officer as
per the procedure prescribed under the Act.
G
77. The further submission made by the learned counsel for the
appellants is that the return of the amount adversely impacts the promotor
and such a question can be looked into by the adjudicating officer in the
better prospective. The submission has no foundation for the reason that
the legislative intention and mandate is clear that Section 18(1) is an
H indefeasible right of the allottee to get a return of the amount on demand
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 953
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

if the promoter is unable to handover possession in terms of the agreement A
for sale or failed to complete the project by the date specified and the
justification which the promotor wants to tender as his defence as to
why the withdrawal of the amount under the scheme of the Act may not
be justified appears to be insignificant and the regulatory authority with
summary nature of scrutiny of undisputed facts may determine the refund
of the amount which the allottee has deposited, while seeking withdrawal B
from the project, with interest, that too has been prescribed under the
Act, as in the instant case, the State of Uttar Pradesh has prescribed
MCLR + 1% leaving no discretion to the authority and can also claim
compensation as per the procedure prescribed under Section 71(3) read
with Section 72 of the Act. C
78. This Court while interpreting Section 18 of the Act, in Imperia
Structures Ltd. Vs. Anil Patni and Another5 held that Section 18 confers
an unqualified right upon an allottee to get refund of the amount deposited
with the promoter and interest at the prescribed rate, if the promoter
fails to complete or is unable to give possession of an apartment as per
D
the date specified in the home buyer’s agreement in para 25 held as
under:-
“25. In terms of Section 18 of the RERA Act, if a promoter fails
to complete or is unable to give possession of an apartment duly
completed by the date specified in the agreement, the promoter
would be liable, on demand, to return the amount received by him E
in respect of that apartment if the allottee wishes to withdraw
from the Project. Such right of an allottee is specifically made
“without prejudice to any other remedy available to him”. The
right so given to the allottee is unqualified and if availed, the
money deposited by the allottee has to be refunded with interest
F
at such rate as may be prescribed. The proviso to Section 18(1)
contemplates a situation where the allottee does not intend to
withdraw from the Project. In that case he is entitled to and must
be paid interest for every month of delay till the handing over of
the possession. It is up to the allottee to proceed either under
Section 18(1) or under proviso to Section 18(1). The case of G
Himanshu Giri came under the latter category. The RERA Act
thus definitely provides a remedy to an allottee who wishes to
withdraw from the Project or claim return on his investment.”
(emphasis supplied)
5
2020(10) SCC 783 H
954 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 79. To safeguard the interests of the parties, on being decided by
the regulatory authority/adjudicating officer, it is always subject to appeal
before the Tribunal under Section 43(5) provided condition of pre-deposit
being complied with can be further challenged in appeal before the High
Court under Section 58 of the Act and, thus, the legislature has put
reasonable restriction and safeguards at all stages.
B
80. The further submission made by learned counsel for the
appellants that if the allottee has defaulted the terms of the agreement
and still refund is claimed which can be possible, to be determined by the
adjudicating officer. The submission appears to be attractive but is not
supported with legislative intent for the reason that if the allottee has
C made a default either in making instalments or made any breach of the
agreement, the promoter has a right to cancel the allotment in terms of
Section 11(5) of the Act and proviso to sub-section 5 of Section 11 enables
the allottee to approach the regulatory authority to question the termination
or cancellation of the agreement by the promotor and thus, the interest
D of the promoter is equally safeguarded.
81. The opening words of Section 71(1) of the Act make it clear
that the scope and functions of the adjudicating officer are only for
“adjudging compensation” under Sections 12, 14, 18 and 19 of the Act.
If the legislative intent was to expand the scope of the powers of the
E adjudicating officer, then the wording of Section 71(1) ought to have
been different. On the contrary, even the opening words of Section 71(2)
of the Act make it clear that an application before the adjudicating officer
is only for “adjudging compensation”. Even in Section 71(3) of the Act,
it is reiterated that the adjudicating officer may direct “to pay such
compensation or interest” as the case may be as he thinks fit, in
F accordance with provisions of Sections 12, 14, 18 and 19 of the Act.
This has to be seen together with the opening words of Section 72 of the
Act, which reads “while adjudging the quantum of compensation or
interest, as the case may be, under Section 71, the adjudicating officer
shall have due regards” to the broad parameters to be kept in mind while
G adjudging compensation to be determined under Section 71 of the Act.
82. The further submission made by the learned counsel for the
appellants that if the authority and the adjudicating officer either come
to different conclusions on the same questions or in a single complaint,
the person aggrieved is seeking manifold reliefs with one of the relief of
H compensation and payment of interest, with the timelines being provided
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 955
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

for the adjudicating officer to decide the complaint under Section 71 of A
the Act. At least, there is no provision which could be referred to expedite
the matter if filed before the regulatory authority. The submission may
not hold good for the reason that there is a complete delineation of the
jurisdiction vested with the regulatory authority and the adjudicating
officer. If there is any breach or violation of the provisions of Sections
B
12, 14, 18 and 19 of the Act by the promoter, such a complaint
straightaway has to be filed before the regulatory authority. What is
being referable to the adjudicating officer is for adjudging compensation,
as reflected under Section 71 of the Act and accordingly rules and
regulations have been framed by the authority for streamlining the
complaints which are made by the aggrieved person either on account C
of violation of the provisions of Sections 12, 14, 18 and 19 or for adjudging
compensation and there appears no question of any inconsistency being
made, in the given circumstances, either by the regulatory authority or
the adjudicating officer.
83. So far as the single complaint is filed seeking a combination of D
reliefs, it is suffice to say, that after the rules have been framed, the
aggrieved person has to file complaint in a separate format. If there is a
violation of the provisions of Sections 12, 14, 18 and 19, the person
aggrieved has to file a complaint as per form (M) or for compensation
under form (N) as referred to under Rules 33(1) and 34(1) of the Rules.
The procedure for inquiry is different in both the set of adjudication and E
as observed, there is no room for any inconsistency and the power of
adjudication being delineated, still if composite application is filed, can be
segregated at the appropriate stage.
84. So far as submission in respect of the expeditious disposal of
the application before the adjudicating officer, as referred to under sub- F
section (2) of Section 71 is concerned, it pre-supposes that the
adjudicatory mechanism provided under Section 71(3) of the Act has to
be disposed of within 60 days. It is expected by the regulatory authority
to dispose of the application expeditiously and not to restrain the mandate
of 60 days as referred to under Section 71(3) of the Act. G
85. The provisions of which a detailed reference has been made,
if we go with the literal rule of interpretation that when the words of the
statute are clear, plain and unambiguous, the Courts are bound to give
effect to that meaning regardless of its consequence. It leaves no manner
of doubt and it is always advisable to interpret the legislative wisdom in
H
956 SUPREME COURT REPORTS [2021] 9 S.C.R.

A the literary sense as being intended by the legislature and the Courts are
not supposed to embark upon an inquiry and find out a solution in
substituting the legislative wisdom which is always to be avoided.
86. From the scheme of the Act of which a detailed reference
has been made and taking note of power of adjudication delineated with
B 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 Sections
18 and 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
C 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 Sections 12, 14, 18 and 19, the adjudicating officer exclusively has
the power to determine, keeping in view the collective reading of Section
71 read with Section 72 of the Act. If the adjudication under Sections 12,
D
14, 18 and 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 Section 71 and that would be against the mandate of the Act
2016.
E Question no. 3: Whether Section 81 of the Act authorizes the
authority to delegate its powers to a single member of the authority
to hear complaints instituted under Section 31 of the Act?
87. It is the specific stand of the respondent Authority of the State
of Uttar Pradesh that the power has been delegated under Section 81 to
F the single member of the authority only for hearing complaints under
Section 31 of the Act. To meet out the exigency, the authority in its
meeting held on 14th August 2018, had earlier decided to delegate the
hearing of complaints to the benches comprising of two members each
but later looking into the volume of complaints which were filed by the
home buyers which rose to about 36,826 complaints, the authority in its
G later meeting held on 5th December, 2018 empowered the single member
to hear the complaints relating to refund of the amount filed under Section
31 of the Act.
88. Mr. Gopal Sankarnarayanan, learned counsel for the appellants
submits that if this Court comes to the conclusion that other than adjudging
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 957
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

compensation wherever provided all other elements/components including A
refund of the amount and interest etc. vests for adjudication by the
authority, in that event, such power vests with the authority constituted
under Section 21 and is not open to be delegated in exercise of power
under Section 81 of the Act to a single member of the authority and such
delegation is a complete abuse of power vested with the authority and
B
such orders passed by the single member of the authority in directing
refund of the amount with interest are wholly without jurisdiction and is
in contravention to the scheme of the Act.
89. Learned counsel further submits that the order passed by the
single member of the authority is without jurisdiction and it suffers from
coram non-judice. Section 21 of the Act clearly provides that the authority C
shall consist of a Chairperson and not less than two whole time members
to be appointed by the Government. Regulation 24(a) of the Regulations
2019 framed by the authority is in clear contravention to the parent statute
that the delegation of power can be of class, category of cases, specific
to the member of the authority but a general delegation of power to the D
single member of the authority in exercise of power under Section 81 is
not contemplated under the Act and delegation to a single member of
the authority in adjudicating the disputes under Sections 12, 14, 18 and
19 is without jurisdiction and that is the reason for which the appellants
have approached the High Court by filing a writ petition under Article
226 of the Constitution and in furtherance to this Court. E

90. Learned counsel further submits that from the plain reading
of the statute itself, the role of the authority is of a quasi-judicial body
forms its underpinning. The adjudicatory role of the authority is specifically
recognized under Sections 5, 6, 7(2), 9(3) and 31 where the authority is
supposed to hear the other side, after compliance of the principles of F
natural justice, is supposed to pass an order in accordance with law.
91. Section 31 allows the aggrieved person to file a complaint
with the authority or the adjudicating officer for any violation or breach
or contravention to the provisions of the Act or the rules and regulations
made thereunder and this being a quasi-judicial power to be exercised G
by the authority could not be delegated to a single member of the authority
under the guise of Section 81 of the Act, that apart, there are certain
provisions where authority alone holds power to initiate action or make
inquiries like Sections 35(1), 35(2), 36 or 38, the powers are exclusively
exercised by the authority and the tests for determining whether an action H
958 SUPREME COURT REPORTS [2021] 9 S.C.R.

A is quasi-judicial or not are laid down in Province of Bombay Vs.
Kushaldas S Advani and Others6 which has been consistently followed
by the Constitution Bench in its decision in Shivji Nathubhai Vs. Union
of India and Others7; Harinagar Sugar Mills Limited Vs. Shyam
Sunder Jhunjhunwala and Others8.
B 92. Learned counsel further submits that according to him, the
powers which have been exercised by the authority under Sections 12,
14, 18 and 19 of the Act have the trappings of the judicial function which
in no manner can be delegated without being expressly bestowed. Placing
reliance on two decisions of the Queen’s Bench in Barnard Vs. National
Dock Labour Board9 and Vine Vs. National Dock Labour Board10
C and taking assistance thereof, learned counsel submits that the judgments
indicated above makes it clear that the delegation of judicial power must
be express; that a provision of quorum for a quasi-judicial body is
distinguishable from the delegation of power to the exclusion of other
members of that body; and the reasons of workload cannot trump the
D legal requirement. These principles have been adopted by this Court
consistently in Bombay Municipal Corporation Vs. Dhondu Narayan
Chowdhary11; Sahni Silk Mills(P) Ltd. and Another Vs. Employees
State Insurance Corporation 12 ; Jagannath Temple Managing
Committee Vs. Siddha Math and Others13.
E 93. Learned counsel submits that it has been consistently held by
this Court that the power being quasi-judicial in nature, the presumption
is that it ought to be exercised by the authority competent and no other,
unless the law expressly or by clear implication permits it.
94. Learned counsel further submits that even by necessary
F implication, the judicial power of the authority cannot be delegated by
the multi-member authority to any of its members. If at all there are
practical considerations of workload, the Government can always
establish more than one authority in terms of the second proviso to Section
20(1).
6
1950 SCR 621
G 7
1960(2) SCR 775
8
1962(2) SCR 339
9
1953(2) QB 18
10
1956(1) QB 658
11
1965(2) SCR 929
12
1994(5) SCC 346
13
H 2015(16) SCC 542
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 959
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

95. Per contra, Mr. Devadatt Kamat, learned senior counsel for A
the respondents submits that the complaint of the appellants has been
primarily on the issue that a single member is not competent to exercise
power to hear complaints under Section 31 of the Act and the delegation
of its power by the authority invoking Section 81 is beyond jurisdiction.
96. Learned counsel submits that as a matter of fact the entire B
functioning of the authority has not been delegated to the single member.
It is only the hearing of complaints under Section 31 that the single
member of the authority has been empowered to deal with such
complaints, keeping in view the overall object of speedy disposal of such
complaints mandated under the law. According to him, it is factually
incorrect to say that the other functions of the authority like imposition C
of penalty under Section 38, revocation of registration under Section 7
or functions of the authority under Sections 32 or 33 have been delegated
to a single member of the authority.
97. Learned counsel further submits that the question is not whether
the delegation per se to a single member is bad, but the question is whether D
the power to hear complaints in reference to Sections 12,14,18 and 19
delegated to a single member is permissible under the law. It may be
noticed that the authority has been vested with several other powers
and functions under the Act, which the authority has consciously not
delegated to a single member. E
98. Learned counsel further submits that pursuant to the delegation
of power under Section 81 by the special order dated 5th December,
2018 read with Regulation 24, a single member has been authorized by
the authority to hear the matters related to refund of the amount under
Section 31 of the Act. F
99. Learned counsel further submits that almost in a pari materia
scheme, Section 29-A of the SEBI Act gives the power to delegate and
Section 19 of the SEBI Act empowers the board to delegate its power to
any member of the Board has been examined by this Court in Saurashtra
Kutch Stock Exchange Ltd. Vs. Securities and Exchange Board of
G
India and Another14. This Court has approved the power of delegation
to a single member of the respective authority and held that such
delegation is always permissible in law unless specifically prohibited and
as long as there is a legislative sanction for delegation of even judicial
14
2012(13) SCC 501 H
960 SUPREME COURT REPORTS [2021] 9 S.C.R.

A power, there is no illegality as held in Bombay Municipal
Corporation(supra); State of Uttar Pradesh Vs. Batuk Deo Pati
Tripathi and Another15Heinz India Private Limited and Another Vs.
State of Uttar Pradesh16; and taking assistance thereof, learned counsel
submits that such delegation of power to a single member of the authority
in deciding application for refund of the amount and interest under Section
B
18 of the Act is well within the jurisdiction of the authority to its delegatee
more so when the power to delegate under Section 81 has not been
questioned in either of the pending appeals before the Court.
100. Learned counsel further submits that Section 21 of the Act
relates to the composition of the authority and does not deal with minimum
C bench strength. At the given time, the legislature has consciously avoided
prescribing any minimum bench/quorum strength to hear complaints by
the authority. At the same time, the Act only prescribes a bench/quorum
only of the Appellate Tribunal under Section 43(3) of the Act and further
submits that in the absence of the minimum bench/quorum strength being
D fixed by statute, it is impermissible to treat the composition of the authority
itself as a minimum bench strength.
101. Learned counsel further submits that Sections 29 and 81 are
not in derogation to each other and operate in different fields. Section 29
is concerned with the meetings of the authority and does not envisage in
its fold the quasi-judicial functions which the Act casts upon the authority.
E The term “meetings” under Section 29 does not deal with the performance
of quasi-judicial functions which are referred to the authority under
Section 31. It can only refer to meetings on policy/regulatory issues and
invited attention to Sections 32 and 33 of the Act which are in the nature
of policy/regulatory decisions the authority is mandated under the Act. It
F can be further noticed from Section 29(3) and (4) which talks about
‘questions’ before the authority, to be disposed off within 60 days of
receiving the ‘application’ and there is no reference to any ‘complaints’
as indicated in Section 31 of the Act.
102. To examine the scheme of the Act it may be relevant to take
note of certain provisions add infra:-
G
“21. The Authority shall consist of a Chairperson and not less
than two whole time Members to be appointed by the appropriate
Government.
15
1978(2) SCC 102
16
H 2012(5) SCC 443
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 961
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

29. (1) The Authority shall meet at such places and times, and A
shall follow such rules of procedure in regard to the transaction of
business at its meetings, (including quorum at such meetings), as
may be specified by the regulations made by the Authority.
(2) If the Chairperson for any reason, is unable to attend a meeting
of the Authority, any other Member chosen by the Members B
present amongst themselves at the meeting, shall preside at the
meeting.
(3) All questions which come up before any meeting of the
Authority shall be decided by a majority of votes by the Members
present and voting, and in the event of an equality of votes, the C
Chairperson or in his absence, the person presiding shall have a
second or casting vote.
(4) The questions which come up before the Authority shall be
dealt with as expeditiously as possible and the Authority shall
dispose of the same within a period of sixty days from the date of
D
receipt of the application:
Provided that where any such application could not be disposed
of within the said period of sixty days, the Authority shall record
its reasons in writing for not disposing of the application within
that period.
E
31. (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.
F
Explanation.—For the purpose of this sub-section “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 complaint under sub-
section (1) shall be such as may be specified.
G
81. The Authority may, by general or special order in writing,
delegate to any member, officer of the Authority or any other
person subject to such conditions, if any, as may be specified in
the order, such of its powers and functions under this Act (except
the power to make regulations under section 85), as it may deem
necessary. H
962 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 103. Section 21 of the Act relates to the composition of the authority
which consists of a Chairperson and not less than two whole time
members to be appointed by the appropriate Government but
conspicuously it does not mention minimum bench strength at the same
time consciously prescribes minimum bench/quorum while constituting
the Real Estate Appellate Tribunal as reflected under Section 43(3) of
B
the Act.
104. The emphasis of the appellants was on Section 29 of the Act
which indicates the quorum of meetings of the authority. There is a
specific provision that there shall be a meeting of the authority with the
minimum quorum being prescribed, such business of the meeting of the
C authority indeed could not be delegated to a single member of the authority
in exercise of power under Section 81 of the Act.
105. The term meeting under Section 29 of the Act does not deal
with the performance of the authority in quasi-judicial matters which are
referred to under Section 31 of the Act. It only refers to meetings, policy/
D regulatory issues that the authority is mandated to discharge under the
Act. It may be noticed that Sections 32 and 33 are in the nature of
policy/regulatory directions which the authority is mandated to be
discharged indisputably have to be undertaken by the authority while
functioning as a whole body under Section 29 of the Act.
E 106. To add it further, Section 29(3) and (4) of the Act talks about
the questions before the authority which are to be disposed of within 60
days on receiving the applications. It may be noticed that there is no
reference to any complaint referred to under Section 31 of the Act. To
buttress it further, Section 29 and Section 81 of the Act are not in derogation
F to each other. To the contrary, both operate in different fields. Section
29 deals with the meetings of the authority to be held for taking policy/
regulatory decisions in the interest of the stake holders and does not
envisage in its fold quasi-judicial functions which the Act casts upon the
authority. The legislative intention as reflected from Section 29 is a
recognition of the rationale that policy matters ought to be considered
G and decided by the entire strength of the authority so that the policy
decisions reflect the acquired experience of the members and Chairman
of the authority.
107. It may be relevant to note that the authority in its meeting
held on 5th December, 2018 in exercise of its power under Section 81 of
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 963
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

the Act for disposal of complaints under Section 31 delegated its power A
to a single member of the authority. The extract of the minutes of the
meeting dated 5th December, 2018 relevant for the purpose is extracted
as under:-

B

C
Point wise decision on agenda is as under:-
Agenda point no. 1:
Regarding hearing by both the benches of Uttar Pradesh Real
Estate Regulatory Authority in the month of December 2018 and
subsequently also while working as single benches as per the D
requirement, for disposal of complaint cases at Lucknow and
Gautambudh Nagar on same dates.
Decision:
Proposal was approved by the authority.
E
..
..”
108. Pursuant to the delegation of power to the single member of
the authority, complaints filed by the allottees/home buyers for refund of
the amount and interest under Section 31 of the Act came to be decided F
by the single member of the authority after hearing the parties in
accordance with the provisions of the Act.
109. This Court, while examining the pari materia provisions of
delegation of power under Section 29A and Section 19 of the SEBI Act
which empowered the board to delegate its power to any member of the G
Board held that the board may in writing delegate its power to any member
of the board and such is valid in law as held by this Court in Saurashtra
Kutch Stock Exchange Ltd.(supra)as under:-
“6. The High Court dismissed the special civil application vide
order dated 19-11-2007 [Saurashtra Kutch Stock Exchange H
964 SUPREME COURT REPORTS [2021] 9 S.C.R.

A Ltd. v. SEBI, Special Civil Application No. 23902 of 2007, decided
on 19-11-2007 (Guj)] and considered the submission of the
appellant in the following manner:
“Section 29-A is reproduced hereunder:
‘29-A. Power to delegate.—The Central Government may,
B by order published in the Official Gazette, direct that the powers
(except the power under Section 30) exercisable by it under
any provision of this Act shall, in relation to such matters and
subject to such conditions, if any, as may be specified in the
order, be exercisable also by the Securities and Exchange Board
C of India or Reserve Bank of India constituted under Section 3
of the Reserve Bank of India Act, 1934 (2 of 1934).’
Notification dated 13-9-1994 issued by the Central Government
reads as under:
‘In exercise of powers conferred by Section 29-A of the
D Securities Contracts (Regulation) Act, 1956 (42 of 1956), the
Central Government hereby directs that the powers exercisable
by it under Section 3, sub-sections (1), (2), (3) and (4) of Section
4, Section 5, sub-section (2) of Section 7-A, Section 13, sub-
section (2) of Section 18, Section 22 and sub-section (2) of
E Section 28 of the Act shall also be exercisable by the Securities
and Exchange Board of India.’
Section 19 of the SEBI Act, 1992 reads as under:
‘19. Delegation.—The Board may, by general or special order
in writing delegate to any member, officer of the Board or any
F other person subject to such conditions, if any, as may be
specified in the order, such of its powers and functions under
this Act (except the powers under Section 29) as it may deem
necessary.’
Thus, the above Notification dated 13-9-1994 issued in exercise
G of power under Section 29-A of the SCR Act of 1956, read
with Section 19 of the SEBI Act, would mean that the Board
may in writing delegate its power to any member of the Board
and, therefore, the power exercised by the Full-Time Member
of the Board under Section 11 of the SEBI Act, 1992, or even
withdrawal or recognition under Section 5 of the SCR Act of
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 965
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

1956, cannot be said to be unjust or arbitrary or dehors the A
provisions of the statute and, therefore, the contention of Mr
Shelat that no remedy of appeal is available to the petitioner
cannot be accepted.”
9. In Para 2 of the civil appeal, the following question of law has
been framed: B
“Whether the whole-time single member of SEBI has no
jurisdiction to cancel or withdraw recognition granted to a stock
exchange on the principle that delegate cannot further delegate
its power, and whether the order under challenge is without
jurisdiction?” C
In our view, it is not necessary to go into the above question as
we find that this very question was raised by the appellant
before the High Court in extraordinary jurisdiction under Article
226 of the Constitution of India. The High Court, as noted
above, in its order dated 19-11-2007 [Saurashtra Kutch Stock D
Exchange Ltd. v. SEBI, Special Civil Application No. 23902
of 2007, decided on 19-11-2007 (Guj)] held that the withdrawal
of recognition under Section 5 of the 1956 Act by the Full-
Time Member of SEBI under Section 11 of the Securities and
Exchange Board of India Act, 1992 cannot be said to be dehors
the provisions of the Act. The special leave petition from the E
above order of the High Court came to be dismissed by this
Court on 10-3-2008 [Saurashtra Kutch Stock Exchange
Ltd. v. SEBI, SLP (C) No. 5197 of 2008, decided on 10-3-
2008 (SC)] . The same question cannot be allowed to be
reopened in the present appeal.” F
110. The express provision of delegation of power under the SEBI
Act is akin to Section 81 of the Act 2016. This Court observed that if the
power has been delegated by the competent authority under the statute,
such action, if being exercised by a single member cannot be said to be
dehors the provisions of the Act. G
111. In Heinz India Private Limited and Another (supra), the
revisional powers were conferred upon the State Agricultural Market
Board under Section 32 of the state law to examine the orders passed
by the market committee. Section 33 thereof empowered the Board to
delegate its powers to the Director. In the facts of the case, an objection
H
966 SUPREME COURT REPORTS [2021] 9 S.C.R.

A was taken to the exercise of revisional powers not by the Director himself
but by some officer lower in the hierarchy. This Court, while taking note
of the definition of ‘Director’ as provided in Section 2(h) to include “any
other officer authorized by the Director to perform all or any of his
functions under this Act” held as under:-
B “34. Now, it is true that the stakes involved in the present batch
of cases are substantial and those called upon to satisfy the
demands raised against them would like their cases to be heard
by a senior officer or a committee of officers to be nominated by
the Board. But in the absence of any data as to the number of
cases that arise for consideration involving a challenge to the
C demands raised by the Market Committee and the nature of the
disputes that generally fall for determination in such cases, it will
not be possible for this Court to step in and direct an alteration in
the mechanism that is currently in place. The power to decide the
revisions vests with the Board who also enjoys the power to
D delegate that function to the Director. So long as there is statutory
sanction for the Director to exercise the revisional power vested
in the Board, any argument that such a delegation is either
impermissible or does not serve the purpose of providing a suitable
machinery for adjudication of the disputes shall have to be rejected.”
E 112. Section 81 of the Act 2016 empowers the authority, by general
or special order in writing, to delegate its powers to any member of the
authority, subject to conditions as may be specified in the order, such of
the powers and functions under the Act. What has been excluded is the
power to make regulations under Section 85, rest of the powers exercised
by the authority can always be delegated to any of its members obviously
F for expeditious disposal of the applications/complaints including complaints
filed under Section 31 of the Act and exercise of such power by a general
and special order to its members is always permissible under the
provisions of the Act.
113. In the instant case, the authority by a special order dated 5th
G December, 2018 has delegated its power to the single member for disposal
of complaints filed under Section 31 of the Act. So far as refund of the
amount with interest is concerned, it may not be considered strictly to be
mechanical in process but the kind of inquiry which has to be undertaken
by the authority is of a summary procedure based on the indisputable
H documentary evidence, indicating the amount which the allottee/home
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 967
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

buyer had invested and interest that has been prescribed by the competent A
authority leaving no discretion with minimal nature of scrutiny of admitted
material on record is needed, if has been delegated by the authority, to
be exercised by the single member of the authority in exercise of its
power under Section 81 of the Act, which explicitly empowers the
authority to delegate under its wisdom that cannot be said to be dehors
B
the provisions of the Act.
114. What is being urged by the learned counsel for the appellants
in interpreting the scope of Section 29 of the Act is limited only to policy
matters and cannot be read in derogation to Section 81 of the Act and
the interpretation as argued by learned counsel for the promoters if to be
accepted, the very mandate of Section 81 itself will become otiose and C
nugatory.
115. It is a well-established principle of interpretation of law that
the court should read the section in literal sense and cannot rewrite it to
suit its convenience; nor does any canon of construction permit the court
to read the section in such a manner as to render it to some extent D
otiose. Section 81 of the Act positively empowers the authority to delegate
such of its powers and functions to any member by a general or a special
order with an exception to make regulations under Section 85 of the
Act. As a consequence, except the power to make regulations under
Section 85 of the Act, other powers and functions of the authority, by a E
general or special order, if delegated to a single member of the authority
is indeed within the fold of Section 81 of the Act.
116. The further submission made by learned counsel for the
promoters that Section 81 of the Act empowers even delegation to any
officer of the authority or any other person, it is true that the authority, F
by general or special order, can delegate any of its powers and functions
to be exercised by any member or officer of the authority or any other
person but we are not examining the delegation of power to any third
party. To be more specific, this Court is examining the limited question
as to whether the power under Section 81 of the Act can be delegated
by the authority to any of its member to decide the complaint under G
Section 31 of the Act. What has been urged by learned counsel for the
promoters is hypothetical which does not arise in the facts of the case.
If the delegation is made at any point of time which is in contravention to
the scheme of the Act or is not going to serve the purpose and object
H
968 SUPREME COURT REPORTS [2021] 9 S.C.R.

A with which power to delegate has been mandated under Section 81 of
the Act, it is always open for judicial review.
117. The further submission made by learned counsel for the
appellants that Section 81 of the Act permits the authority to delegate
such powers and functions to any member of the authority which are
B mainly administrative or clerical, and cannot possibly encompass any of
the core functions which are to be discharged by the authority, the judicial
functions are non-delegable, as these are the core functions of the
authority. The submission may not hold good for the reason that the
power to be exercised by the authority in deciding complaints under
Section 31 of the Act is quasi-judicial in nature which is delegable provided
C there is a provision in the statute. As already observed, Section 81 of the
Act empowers the authority to delegate its power and functions to any
of its member, by general or special order.
118. In the instant case, by exercising its power under Section 81
of the Act, the authority, by a special order dated 5th December, 2018
D has delegated its power to the single member of the authority to exercise
and decide complaints under Section 31 of the Act and that being
permissible in law, cannot be said to be de hors the mandate of the Act.
At the same time, the power to be exercised by the adjudicating officer
who has been appointed by the authority in consultation with the
E appropriate Government under Section 71 of the Act, such powers are
non-delegable to any of its members or officers in exercise of power
under Section 81 of the Act.
119. That scheme of the Act, 2016 provides an in-built mechanism
and any order passed on a complaint by the authority under Section 31 is
F appealable before the tribunal under Section 43(5) and further in appeal
to the High Court under Section 58 of the Act on one or more ground
specified under Section 100 of the Code of Civil Procedure, 1908, if any
manifest error is left by the authority either in computation or in the
amount refundable to the allottee/home buyer, is open to be considered
at the appellate stage on the complaint made by the person aggrieved.
G
120. In view of the remedial mechanism provided under the
scheme of the Act 2016, in our considered view, the power of delegation
under Section 81 of the Act by the authority to one of its member for
deciding applications/complaints under Section 31 of the Act is not only
well defined but expressly permissible and that cannot be said to be
H dehors the mandate of law.
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 969
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

Question no. 4:- Whether the condition of pre-deposit under A
proviso to Section 43(5) of the Act for entertaining substantive right
of appeal is sustainable in law?
121. Before we examine the challenge to the proviso to Section
43(5) of the Act of making pre-deposit for entertaining an appeal before
the Tribunal, it may be apposite to take note of Section 43(5) of the Act, B
2016. Section 43(5) reads as follows:-
“43. Establishment of Real Estate Appellate Tribunal-
…….
(5) Any person aggrieved by any direction or decision or order C
made by the Authority or by an adjudicating officer under this Act
may prefer an appeal before the Appellate Tribunal having
jurisdiction over the matter:
Provided that where a promoter files an appeal with the Appellate
Tribunal, it shall not be entertained, without the promoter first having D
deposited with the Appellate Tribunal at least thirty per cent of
the penalty, or such higher percentage as may be determined by
the Appellate Tribunal, or the total amount to be paid to the allottee
including interest and compensation imposed on him, if any, or
with both, as the case may be, before the said appeal is heard.
E
Explanation – For the purpose of this sub-section “person” shall
include the association of allottees or any voluntary consumer
association registered under any law for the time being in force.”
122. It may straightaway be noticed that Section 43(5) of the Act
envisages the filing of an appeal before the appellate tribunal against the
F
order of an authority or the adjudicating officer by any person aggrieved
and where the promoter intends to appeal against an order of authority
or adjudicating officer against imposition of penalty, the promoter has to
deposit at least 30 per cent of the penalty amount or such higher amount
as may be directed by the appellate tribunal. Where the appeal is against
any other order which involves the return of the amount to the allottee, G
the promoter is under obligation to deposit with the appellate tribunal the
total amount to be paid to the allottee which includes interest and
compensation imposed on him, if any, or with both, as the case may be,
before the appeal is to be instituted.
H
970 SUPREME COURT REPORTS [2021] 9 S.C.R.

A 123. The plea advanced by the learned counsel for the appellants
is that substantive right of appeal against an order of authority/adjudicating
officer cannot remain dependent on fulfilment of pre-deposit which is
otherwise onerous on the builders alone and only the builders/promoters
who are in appeal are required to make the pre-deposit to get the appeal
entertained by the Appellate Tribunal is discriminatory amongst the
B
stakeholders as defined under the provisions of the Act.
124. Learned counsel further submits that if the entire sum as has
been computed either by the Authority or adjudicating officer, is to be
deposited including 30 per cent of the penalty in the first place, the remedy
of appeal provided by one hand is being taken away by the other since
C the promoter is financially under distress and incapable to deposit the
full computed amount by the authority/adjudicating officer. The right of
appreciation of his defence at appellate stage which is made available to
him under the statute became nugatory because of the onerous mandatory
requirement of pre-deposit in entertaining the appeal only on the promoter
D who intends to prefer under Section 43(5) of the Act which according to
him is in the given facts and circumstances of this case is unconstitutional
and violative of Article 14 of the Constitution of India.
125. The submission in the first blush appears to be attractive but
is not sustainable in law for the reason that a perusal of scheme of the
E Act makes it clear that the limited rights and duties are provided on the
shoulders of the allottees under Section 19 of the Act at a given time,
several onerous duties and obligations have been imposed on the promoters
i.e. registration, duties of promoters, obligations of promoters, adherence
to sanctioned plans, insurance of real estate, payment of penalty, interest
and compensation, etc. under Chapters III and VIII of the Act 2016.
F This classification between consumers and promoters is based upon the
intelligible differentia between the rights, duties and obligations cast upon
the allottees/home buyers and the promoters and is in furtherance of the
object and purpose of the Act to protect the interest of the consumers
vis-a-viz., the promoters in the real estate sector. The promoters and
G allottees are distinctly identifiable, separate class of persons having been
differently and separately dealt with under the various provisions of the
Act.
126. Therefore, the question of discrimination in the first place
does not arise which has been alleged as they fall under distinct and
H different categories/classes.
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 971
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

127. It may further be noticed that under the present real estate A
sector which is now being regulated under the provisions of the Act
2016, the complaint for refund of the amount of payment which the
allottee/consumer has deposited with the promoter and at a later stage,
when the promoter is unable to hand over possession in breach of the
conditions of the agreement between the parties, are being instituted at
B
the instance of the consumer/allotee demanding for refund of the amount
deposited by them and after the scrutiny of facts being made based on
the contemporaneous documentary evidence on record made available
by the respective parties, the legislature in its wisdom has intended to
ensure that the money which has been computed by the authority at
least must be safeguarded if the promoter intends to prefer an appeal C
before the tribunal and in case, the appeal fails at a later stage, it becomes
difficult for the consumer/allottee to get the amount recovered which
has been determined by the authority and to avoid the consumer/allottee
to go from pillar to post for recovery of the amount that has been
determined by the authority in fact, belongs to the allottee at a later
D
stage could be saved from all the miseries which come forward against
him.
128. At the same time, it will avoid unscrupulous and uncalled for
litigation at the appellate stage and restrict the promoter if feels that
there is some manifest material irregularity being committed or his defence
has not been properly appreciated at the first stage, would prefer an E
appeal for re-appraisal of the evidence on record provided substantive
compliance of the condition of pre-deposit is made over, the rights of the
parties inter se could easily be saved for adjudication at the appellate
stage.
129. There are multiple statutes which provide a condition of pre- F
deposit of a stipulated statutory amount to be deposited before an appeal
is entertained by an appellate forum/tribunal for re-appraisal of facts
and law at the appellate stage and it has been examined by this Court as
well. Proviso to Section 18 of SARFAESI Act, 2002 of the Act which
provides pre-deposit is as follows:- G
“18. Appeal to Appellate Tribunal
…….
Provided further that no appeal shall be entertained unless the
borrower has deposited with the Appellate Tribunal fifty per cent
H
972 SUPREME COURT REPORTS [2021] 9 S.C.R.

A of the amount of debt due from him, as claimed by the secured
creditors or determined by the Debts Recovery Tribunal, whichever
is less:
Provided also that the Appellate Tribunal may, for the reasons to
be recorded in writing, reduce the amount to not less than twenty-
B five per cent. of debt referred to in the second proviso.”
130. The intention of the legislature appears to be to ensure that
the rights of the decree-holder (the successful party) is to be protected
and only genuine bona fide appeals are to be entertained. While
interpretating Section 18 of SARFAESI Act, this Court in Narayan
C Chandra Ghosh Vs. UCO Bank and Others17observed as under:-
“8. It is well-settled that when a statute confers a right of appeal,
while granting the right, the legislature can impose conditions for
the exercise of such right, so long as the conditions are not so
onerous as to amount to unreasonable restrictions, rendering the
D right almost illusory. Bearing in mind the object of the Act, the
conditions hedged in the said proviso cannot be said to be onerous.
Thus, we hold that the requirement of pre-deposit under sub-section
(1) of Section 18 of the Act is mandatory and there is no reason
whatsoever for not giving full effect to the provisions contained in
Section 18 of the Act. In that view of the matter, no court, much
E less the Appellate Tribunal, a creature of the Act itself, can refuse
to give full effect to the provisions of the statute. We have no
hesitation in holding that deposit under the second proviso to Section
18(1) of the Act being a condition precedent for preferring an
appeal under the said section, the Appellate Tribunal had erred in
F law in entertaining the appeal without directing the appellant to
comply with the said mandatory requirement.”
131. In Har Devi Asnani Vs. State of Rajasthan and Others18,
the validity of proviso to Section 65(1) of the Rajasthan Stamp Act, 1998
came up for consideration in terms of which no revision application could
G be entertained unless it was accompanied by a satisfactory proof of
payment of 50 per cent of the recoverable amount. Relying on the earlier
decisions of this Court including in Government of Andhra Pradesh
and Others Vs. P. Laxmi Devi (Smt.)19, the challenge was repelled
17
(2011) 4 SCC 548
18
(2011) 14 SCC 160
19
H (2008) 4 SCC 720
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 973
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

and the view expressed in P. Laxmi Devi(supra) was repeated in Har A
Devi Ashani(supra) wherein this Court held as under:-
“In our opinion in this situation it is always open to a party to file a
writ petition challenging the exorbitant demand made by the
registering officer under the proviso to Section 47-A alleging that
the determination made is arbitrary and/or based on extraneous B
considerations, and in that case it is always open to the High Court,
if it is satisfied that the allegation is correct, to set aside such
exorbitant demand under the proviso to Section 47-A of the Stamp
Act by declaring the demand arbitrary. It is well settled that
arbitrariness violates Article 14 of the Constitution vide Maneka
Gandhi v. Union of India [(1978) 1 SCC 248] . Hence, the party C
is not remediless in this situation.”
132. At the same time, Section 19 of the Consumer Protection
Act, 1986 prescribes a condition for pre-deposit which provides that an
appeal shall not be entertained unless 50 per cent of the amount awarded
by the State Commission or Rs. 35,000/- whichever is less is deposited D
before the National Consumer Disputes Redressal Commission
(NCDRC). This Court while placing reliance on State of Haryana Vs.
Maruti Udyog Ltd. and Others20; in Shreenath Corporation and
Others Vs. Consumer Education and Research Society and Others 21
held that such a condition is imposed to avoid frivolous appeals. E
“7. Section 19 of the Consumer Protection Act, 1986 deals with
the appeals against the order made by the State Commission in
exercise of its power conferred by sub-clause (i) of clause (a) of
Section 17 and the said section reads as follows:
“19. Appeals.—Any person aggrieved by an order made by the F
State Commission in exercise of its powers conferred by sub-
clause (i) of clause (a) of Section 17 may prefer an appeal against
such order to the National Commission within a period of thirty
days from the date of the order in such form and manner as may
be prescribed: G
Provided that the National Commission may entertain an appeal
after the expiry of the said period of thirty days if it is satisfied
that there was sufficient cause for not filing it within that period:
20
2000(7) SCC 348
21
2014(8) SCC 657 H
974 SUPREME COURT REPORTS [2021] 9 S.C.R.

A Provided further that no appeal by a person, who is required to
pay any amount in terms of an order of the State Commission,
shall be entertained by the National Commission unless the
appellant has deposited in the prescribed manner fifty per cent of
the amount or rupees thirty-five thousand, whichever is less.”
B On plain reading of the aforesaid Section 19, we find that the
second proviso to Section 19 of the Act relates to “pre-deposit”
required for an appeal to be entertained by the National
Commission.
9. The second proviso to Section 19 of the Act mandates pre-
C deposit for consideration of an appeal before the National
Commission. It requires 50% of the amount in terms of an order
of the State Commission or Rs 35,000, whichever is less for
entertainment of an appeal by the National Commission. Unless
the appellant has deposited the pre-deposit amount, the appeal
cannot be entertained by the National Commission. A pre-deposit
D condition to deposit 50% of the amount in terms of the order of
the State Commission or Rs 35,000 being condition precedent for
entertaining appeal, it has no nexus with the order of stay, as such
an order may or may not be passed by the National Commission.
The condition of pre-deposit is there to avoid frivolous appeals.”
E 133. Similarly, under Section 19 of the Micro, Small and Medium
Enterprises Development Act, 2006, any appellant, other than the supplier,
is required to make a pre-deposit of 75 per cent to maintain an appeal
against any decree, award or order made either by the Micro and Small
Enterprises Facilitation Council or by any institution or center providing
F alternate dispute resolution services to which a reference is made by the
Council. Section 19 reads as follows:-
“19. Application for setting aside decree, award or order.—
No application for setting aside any decree, award or other order
made either by the Council itself or by any institution or centre
G providing alternate dispute resolution services to which a reference
is made by the Council, shall be entertained by any court unless
the appellant (not being a supplier) has deposited with it seventy-
five per cent. of the amount in terms of the decree, award or, as
the case may be, the other order in the manner directed by such
court: Provided that pending disposal of the application to set aside
H the decree, award or order, the court shall order that such
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 975
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

percentage of the amount deposited shall be paid to the supplier, A
as it considers reasonable under the circumstances of the case,
subject to such conditions as it deems necessary to impose.”
134. Similarly, the condition of pre-deposit has been examined
recently by this Court in Tecnimont Pvt. Ltd. (Formerly Known As
Tecnimont ICB Private Limited) Vs. State of Punjab and Others 22, B
where the validity of Section 62(5) of the Punjab Value Added Tax Act,
2005 (PVAT) which imposes a condition of 25 per cent of pre-deposit
for hearing of first appeal has been upheld. Section 62(5) of the PVAT
Act reads as follows:-
“62. First Appeal C
……
(5) No appeal shall be entertained, unless such appeal is
accompanied by satisfactory proof of the prior minimum payment
of twenty-five per cent of the total amount of tax, penalty and
interest, if any. D
……..”
135. To be noticed, the intention of the instant legislation appears
to be that the promoters ought to show their bona fides by depositing the
amount so contemplated.
E
136. It is indeed the right of appeal which is a creature of the
statute, without a statutory provision, creating such a right the person
aggrieved is not entitled to file the appeal. It is neither an absolute right
nor an ingredient of natural justice, the principles of which must be
followed in all judicial and quasi- judicial litigations and it is always be
F
circumscribed with the conditions of grant. At the given time, it is open
for the legislature in its wisdom to enact a law that no appeal shall lie or
it may lie on fulfilment of pre-condition, if any, against the order passed
by the Authority in question.
137. In our considered view, the obligation cast upon the promoter
of pre-deposit under Section 43(5) of the Act, being a class in itself, and G
the promoters who are in receipt of money which is being claimed by
the home buyers/allottees for refund and determined in the first place by
the competent authority, if legislature in its wisdom intended to ensure
that money once determined by the authority be saved if appeal is to be
22
AIR 2019 SC 4489 H
976 SUPREME COURT REPORTS [2021] 9 S.C.R.

A preferred at the instance of the promoter after due compliance of pre-
deposit as envisaged under Section 43(5) of the Act, in no circumstance
can be said to be onerous as prayed for or in violation of Articles 14 or
19(1)(g) of the Constitution of India.
Question No.5:- Whether the authority has the power to issue
recovery certificates for recovery of the principal amount under
B
Section 40(1) of the Act?
138. To examine this question, it will be apposite to take note of
Section 40 that states regarding the recovery of interest or penalty or
compensation to be recovered as arrears of land revenue, and reads as
under:-
C 40. Recovery of interest or penalty or compensation and
enforcement of order, etc.—
(1) If a promoter or an allottee or a real estate agent, as the case
may be, fails to pay any interest or penalty or compensation imposed
on him, by the adjudicating officer or the Regulatory Authority or
D the Appellate Authority, as the case may be, under this Act or the
rules and regulations made thereunder, it shall be recoverable from
such promoter or allottee or real estate agent, in such manner as
may be prescribed as an arrears of land revenue.
(2) If any adjudicating officer or the Regulatory Authority or the
Appellate Tribunal, as the case may be, issues any order or directs
E any person to do any act, or refrain from doing any act, which it is
empowered to do under this Act or the rules or regulations made
thereunder, then in case of failure by any person to comply with
such order or direction, the same shall be enforced, in such manner
as may be prescribed.”
F 139. The submission of the appellants/promoters is that under
Section 40(1) of the Act only the interest or penalty imposed by the
authority can be recovered as arrears of land revenue and no recovery
certificate for the principal amount as determined by the authority can
be issued. If we examine the scheme of the Act, the power of authority
to direct the refund of the principal amount is explicit in Section 18 and
G the interest that is payable is on the principal amount in other words,
there is no interest in the absence of a principal amount being determined
by the competent authority. Further the statute as such is read to mean
that the principal sum with interest has become a composite amount
quantified upon to be recovered as arrears of land revenue under Section
40(1) of the Act.
H
M/S. NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. 977
v. STATE OF UP & ORS. ETC. [AJAY RASTOGI, J.]

140. It is settled principle of law that if the plain interpretation A
does not fulfil the mandate and object of the Act, this Court has to interpret
the law in consonance with the spirit and purpose of the statute. There is
indeed a visible inconsistency in the powers of the authority regarding
refund of the amount received by the promoter and the provision of law
in Section 18 and the text of the provision by which such refund can be
B
referred under Section 40(1). While harmonising the construction of the
scheme of the Act with the right of recovery as mandated in Section
40(1) of the Act keeping in mind the intention of the legislature to provide
for a speedy recovery of the amount invested by the allottee along with
the interest incurred thereon is self-explanatory. However, if Section
40(1) is strictly construed and it is understood to mean that only penalty C
and interest on the principal amount are recoverable as arrears of land
revenue, it would defeat the basic purpose of the Act.
141. Taking into consideration the scheme of the Act what is to
be returned to the allottee is his own life savings with interest on computed/
quantified by the authority becomes recoverable and such arrear becomes D
enforceable in law. There appears some ambiguity in Section 40(1) of
the Act that in our view, by harmonising the provision with the purpose
of the Act, is given effect to the provisions is allowed to operate rather
running either of them redundant, noticing purport of the legislature and
the above-stated principle into consideration, we make it clear that the
amount which has been determined and refundable to the allottees/home E
buyers either by the authority or the adjudicating officer in terms of the
order is recoverable within the ambit of Section 40(1) of the Act.
142. The upshot of the discussion is that we find no error in the
judgment impugned in the instant appeals. Consequently, the batch of
appeals are disposed off in the above terms. However, we make it clear F
that if any of the appellant intends to prefer appeal before the Appellate
Tribunal against the order of the authority, it may be open for him to
challenge within 30 days from today provided the appellant(s) comply
with the condition of pre-deposit as contemplated under the proviso to
Section 43(5) of the Act which may be decided by the Tribunal on its
own merits in accordance with law. No costs. G

143. Pending application(s), if any, stand disposed of.

Nidhi Jain Appeals disposed of.

H