Bombay HC Upholds MRT Orders, Holds RERA Appellate Tribunal Not Established By Appointment Of Members Alone

The Bombay High Court on Monday upheld the jurisdiction of the Maharashtra Revenue Tribunal (MRT) to hear appeals under the Real Estate (Regulation and Development) Act before the Maharashtra Real Estate Appellate Tribunal (MahaREAT) became functional.

The court ruled that the appellate tribunal could not be regarded as established merely because its chairperson and members had been appointed.

Justice Madhav J. Jamdar dismissed a batch of appeals filed by Runwal Constructions and related entities.

The appeals challenged a November 1, 2018 order passed by the President of the Maharashtra Revenue Tribunal, who was then acting as the designated appellate tribunal under RERA. The order had granted relief to homebuyers in the Runwal Infinity (Runwal Sanctuary) project at Nahur in Mumbai's Mulund area. It had also directed payment of interest to allottees for delayed possession.

The project was launched in 2005-06. Flats were booked between 2005 and 2007. Registered agreements with several homebuyers were executed in 2006 and 2007.

One of the principal questions before the Court was whether the MRT could continue to exercise appellate jurisdiction after the State government appointed the chairperson and members of MahaREAT on May 8, 2018.

Rejecting the developers' challenge, the Court noted that the State government had designated the MRT as the appellate forum under RERA until a regular appellate tribunal became operational.

The Court observed, "Thus, the above aspects show that the State of Maharashtra by notification dated 28th December 2017 designated the Maharashtra Revenue Tribunal at Brihanmumbai constituted and functioning under the Maharashtra Revenue Code to be the Appellate Tribunal to hear appeals under RERA until the establishment of Real Estate Appellate Tribunal under Section 43 of the RERA. The Government of Maharashtra appointed the Chairperson and members of the Maharashtra Real Estate Appellate Tribunal by Government Resolution dated 8th May 2018. The said Chairperson and members took oath on 24th December 2018. Thus, the Maharashtra Real Estate Appellate Tribunal started functioning with effect from 24th December 2018."

The Court held that the appointment of members did not, by itself, mean that the tribunal had come into existence.

"Thus, it is clear that the Appellate Tribunal came into existence only on 24th December 2018 on which date the Chairperson and other members took oath. The establishment of Appellate Tribunal as envisaged under Section 43 will have to be understood in this manner only," it added.

The Court further held that accepting the developers' interpretation would have resulted in pending appeals being transferred to a tribunal that was yet to become operational.

"If the contention of the Appellants are accepted then the effect will be transfer of Appeals filed under RERA being adjudicated by Maharashtra Revenue Tribunal in its capacity as Maharashtra Real Estate Appellate Tribunal to the non-existing and non-functional Maharashtra Real Estate Appellate Tribunal," the Court held.

The developers had also challenged the validity of orders passed by a single-member bench of the MRT. The High Court rejected that challenge and upheld the tribunal's exercise of appellate jurisdiction during the transitional period.

While considering the merits of the dispute, the Court noted that the designated appellate tribunal had granted interest to the allottees with effect from February 1, 2014. This was despite the possession dates under the agreements ranging from 2008 to 2010.

Finding no substance in any of the substantial questions of law raised by the developers, the Court dismissed all ten appeals.

Costs of ₹10,000 each were imposed in eight appeals. Costs of ₹1 lakh each were imposed in two appeals.

The Court also declined the developers' request for a stay of the judgment.

"After a period of 20 years, possession is not handed over to the flat purchasers," Justice Jamdar observed while refusing interim relief.

The Court noted that the agreements with the flat purchasers dated back to 2006 and 2007. Possession has still not been handed over.

For appellants (Runwal Constructions): Senior Advocates Atul Damle, Rajiv Chavan and Ashish Kamat, with Advocates Saket Mone, Rubin Vakil, Ditendra Mishra, Abhishek Puranik, Prerith Menon and Dhiraj Kanade.

For respondents (Bharat Shah & Ors.): Advocate Anjani Kumar Singh, instructed by Asmita S. Jaiswal.