HC Bombay (2026.06.08) in Runwal Constructions Registered Partnership Firm Vs Bharat Shah [2026:BHC-AS:22794, Second Appeal No.251 Of 2022 With Civil Application No. 288 of 2019] held that;-
The object and reasons of the said Act and the peculiar position of allottees as explained by the Supreme Court to the effect that 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 i.e. the weakest stakeholder with a high financial exposure clearly shows that the legislative intent to use "shall " in Section 18 of the said Act is to make the same mandatory.
Thus it is specifically held by the Supreme Court that the proviso to Section 18(1) contemplates the situation where the allottee does not intend to withdraw from the project, however, there is delay in handing over possession of the apartment. In that case, he is entitled to and must be paid interest for every month's delay till handing over the possession and it is the entire discretion of the allottee either to withdraw from the project and seek refund, interest and compensation or to continue with the project and seek interest for every month's delay in handing over possession.
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 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".
Section 18 of the RERA gives unqualified statutory right to the allottees if there is delay in handing over possession by the promoter and if the allottee does not intend to withdraw from the project, he shall be paid every month's interest for delay in handing over possession as such rate as may be prescribed.
In this context, the Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd.(supra) in paragraphs 22 and 25 has expressly observed that the allottee has an unqualified right to claim interest under Section 18(1) of the RERA Act if the promoter fails to discharge his obligation in accordance with the terms and conditions of the agreement. This unqualified right is not dependent on any contingencies or stipulations and therefore the legislature has consciously provided this right of refund as an unconditional absolute right to the allottee if the promoter fails to give possession within the stipulated time regardless of unforeseen events or stay order of the Court which is in either way not attributable to the allottee.
Thus, it is clear that the doctrine of frustration comes into play when a contract becomes impossible of performance, after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Contract Act. However, the performance of a contract is never discharged merely because it may become onerous to one of the parties. It is settled legal position that this doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances.
Excerpts of the order;
# 1. Heard Mr. Atul Damle, learned Senior Counsel, Mr. Ashish Kamat, learned Senior Counsel, Mr. Rajiv Chavan, learned Senior Counsel, Mr. Sanket Mone, learned Counsel, Mr. Rubin Vakil, learned Counsel and Mr. Ditendra Mishra, learned Counsel, appearing for the Appellants and Mr. Anjani Kumar Singh, learned Counsel appearing for the Respondents.
# 6. This Court, by Order dated 12th December 2024 framed following substantial questions of law and an additional substantial question of law was framed by Order dated 7th April 2025. The same are as under:-
SUBSTANTIAL QUESTIONS OF LAW FRAMED BY ORDER DATED 12TH DECEMBER 2024 :
1. When the Agreement for Sale between the Promoter and the Allottee makes provision for force majeure events, which have the effect of postponing the agreed date of possession, can authorities under RERA fix / provide for a date of possession while adjudicating claims under Section 18 of RERA?
2. Whether the authorities under RERA have the power to determine or rewrite or revise the date of handover of possession, in exercise of power under Section 18 of RERA?
3. Whether, in exercise of power to designate an authority as the Appellate Tribunal under the first proviso to Section 43(4) of RERA, it is necessary for the State Government to give due regard to the provisions of Section 43(3) of RERA and ensure that the composition of such alternate authority is in accordance therewith?
4. Whether in exercise of power under the first proviso to Section 43(4) of RERA, the State Government (as the delegatee of such power) can designate an authority to function as the Appellate Tribunal in a manner contrary to or ultra vires Section 43(3) of RERA?
5. Whether a single member bench of the Hon'ble Maharashtra Revenue Tribunal, exercising power under the first proviso to Section 43(4) of RERA has jurisdiction to adjudicate appeals under Section 44 of RERA?
6. Whether, in light of the second proviso to Section 43(4) of RERA, the Hon'ble Maharashtra Revenue Tribunal has jurisdiction to adjudicate appeals under Section 44 of RERA, after the constitution / establishment of the Maharashtra Real Estate Appellate Tribunal under Section 43 of RERA?
7. Whether the impugned Judgment and Order is perverse and unreasoned?
ADDITIONAL SUBSTANTIAL QUESTION OF LAW FRAMED BY ORDER DATED 7TH APRIL 2025 :
1. When agreement in the form of a booking form, gets frustrated on account of force majeure as well as due to making its performance impossible, whether such an agreement can be considered while exercising power under section 18 of RERA?
Thus, total 8 substantial questions of law were framed by this Court.
# 7. The substantial questions of law Nos. 1, 2 and 7 framed by Order dated 12th December 2024 and the substantial question of law framed by Order dated 7th April 2025 are inter alia depending on the analysis of factual aspects. The substantial questions of law Nos. 3, 4 and 5 framed by this Court by order dated 12 th December 2024 are concerning designation of the Maharashtra Revenue Tribunal by exercise of power under Section 43(4) of RERA contrary to the mandate of Section 43(3) of RERA and substantial question of law No.6 is concerning jurisdiction of Maharashtra Revenue Tribunal to adjudicate Appeal under Section 44 of the RERA after the constitution/establishment of the Maharashtra Real Estate Appellate Tribunal under Section 43 of the RERA. Therefore, this Court will take up for consideration substantial question of law No.6 first and thereafter substantial questions of law namely 3, 4 and 5 as both these set of questions of law are relating to the jurisdiction of the learned Maharashtra Revenue Tribunal to act as the learned Appellate Tribunal under RERA. Other substantial questions of law will be considered thereafter.
8. Before setting out and consideration of the rival submissions, it is required to be noted that all the parties have filed written submissions on 19th September 2025 and therefore these group of Second Appeals were adjourned to 6th October 2025 for passing orders. However, on 6 th October 2025 as the assignment was very heavy, passing of Judgment in these group of Second Appeals was reserved. While preparing draft Judgment this Court noticed certain relevant provision as more particularly set out in Order dated 5th January 2026 which was not pointed out to this Court by both the parties and therefore, for hearing the parties on the said issue the matter was again listed from time to time. Ultimately, the hearing was completed on 29 th January 2026 and the Judgment was reserved.
FIRST SUBSTANTIAL QUESTION OF LAW :
Whether, in light of the second proviso to Section 43(4) of RERA, the Maharashtra Revenue Tribunal has jurisdiction to adjudicate appeals under Section 44 of RERA, after the constitution / establishment of the Maharashtra Real Estate Appellate Tribunal under Section 43 of RERA ?
# 34. From the analysis of the above decisions of the Supreme Court concerning interpretation of statutes, the following principles can be culled out:-
i. The provisions of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not to defeat it.
ii. If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provision. The question of construction arises only in the event of an ambiguity or the plain meaning of the words used in the statute would be self-defeating.
iii. The court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute.
iv. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used.
v. The elementary principle of interpreting any word while considering a statute is to gather the sententia legis or mens of the legislature. The maxim sententia legis or mens contemplates that the essence of the law lies in the spirit, and not in its letter, the letters are just a way to express the intentions of the law makers. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to take upon itself the task of amending or altering the statutory provisions.
vi. It is necessary to cull out the legislative policy from various factors like the words in the statute, the Preamble to the Act, the Statement of Objects and Reasons, and in a given case, even the attendant circumstances. After the legislative policy is found, then the words used in the statute must be so interpreted such that it advances the purpose of the statute and does not defeat it.
vii. A statute must be construed having regard to the legislative intent. It has to be meaningful. A construction which leads to manifest absurdity must not be preferred to a construction which would fulfill the object and purport of the legislative intent.
viii. Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman's unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used.
ix. The doctrine of purposive construction may be taken recourse to for the purpose of giving full effect to statutory provisions, and the courts must state what meaning the statute should bear, rather than rendering the statute a nullity, as statutes are meant to be operative and not inept. The courts must refrain from declaring a statute to be unworkable. The rules of interpretation require that construction which carries forward the objectives of the statute, protects interest of the parties and keeps the remedy alive, should be preferred looking into the text and context of the statute. Construction given by the court must promote the object of the statute and serve the purpose for which it has been enacted and not efface its very purpose.
x. The courts strongly lean against any construction which tends to reduce a statute to futility. The provision of the statute must be so construed as to make it effective and operative.' The court must take a pragmatic view and must keep in mind the purpose for which the statute was enacted as the purpose of law itself provides good guidance to courts as they interpret the true meaning of the Act and thus legislative futility must be ruled out. The court must give effect to the purpose and object of the Act for the reason that legislature is presumed to have enacted a reasonable statute.
# 35. Thus, it is clear that the provisions of RERA are required to be interpreted in the manner the same would advance the object and purpose of RERA. As per the settled legal position, the provisions of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not defeat it. If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provision. The question of construction arises only in the event of an ambiguity or the plain meaning of the words used in the statute would be self-defeating. The court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute. Adopting this rule of construction, whenever a question of construction arises upon ambiguity or where two views are possible of a provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act.
# 71. Thus, for the above reasons there is no substance in the First Substantial Question of Law.
# 72. The Substantial Questions of Law Nos.3, 4 and 5 as framed by Order dated 12th December 2024 will be considered hereinafter. The said substantial questions of law are treated as 2nd, 3rd and 4th substantial questions of law. They are reproduced herein below for ready reference:
SECOND SUBSTANTIAL QUESTION OF LAW:
Whether, in exercise of power to designate an authority as the Appellate Tribunal under the first proviso to Section 43(4) of RERA, it is necessary for the State Government to give due regard to the provisions of Section 43(3) of RERA and ensure that the composition of such alternate authority is in accordance therewith?
THIRD SUBSTANTIAL QUESTION OF LAW:
Whether in exercise of power under the first proviso to Section 43(4) of RERA, the State Government (as the delegatee of such power) can designate an authority to function as the Appellate Tribunal in a manner contrary to or ultra vires Section 43(3) of RERA?
FOURTH SUBSTANTIAL QUESTION OF LAW:
Whether a single member bench of the Hon'ble Maharashtra Revenue Tribunal, exercising power under the first proviso to Section 43(4) of RERA has jurisdiction to adjudicate appeals under Section 44 of RERA?
# 75. As these substantial questions of law are interconnected they are decided together.
# 99. Thus, for the above reasons there is no substance in the Second, Third and Fourth Substantial Questions of Law.
# 100. Hereinafter the substantial questions of law Nos.1 and 2 as framed by Order dated 12th December 2024 will be considered. The said substantial questions of law are renumbered as substantial questions of law nos. 5 and 6. The said substantial questions of law are as follows:
FIFTH SUBSTANTIAL QUESTION OF LAW:
When the Agreement for Sale between the Promoter and the Allottee makes provision for force majeure events, which have the effect of postponing the agreed date of SA 251.2022.doc 29.12 possession, can authorities under RERA fix / provide for a date of possession while adjudicating claims under Section 18 of RERA?
SIXTH SUBSTANTIAL QUESTION OF LAW:
Whether the authorities under RERA have the power to determine or rewrite or revise the date of handover of possession, in exercise of power under Section 18 of RERA?
# 101. The impugned order of the learned Appellate Tribunal directs the Appellants to pay interest to the allottees at the rate of 10.05% effective from 1st February 2014 till handing over actual possession. As there is a force majeure clause in the agreement executed between the promoter and the allottees, it is the contention of the Appellants that as a result of the force majeure clause, effectively the agreed date of possession has been postponed and as by the impugned order the agreed dated of possession has been fixed by the learned Appellate Tribunal while adjudicating the claim under Section 18 of RERA, in effect the agreement or contract has been re- written by the learned Maharashtra Revenue Tribunal i.e. the designated Appellate Tribunal.
# 102. In view of the said contentions raised, this Court has framed the above substantial questions of law.
SUBMISSIONS OF THE APPELLANTS CONCERNING THE FIFTH AND SIXTH SUBSTANTIAL OF LAW:
# 103. The learned Counsel appearing for the Appellants have SA 251.2022.doc 29.12 raised the following contentions:
i. Reliance is placed on Section 18 of RERA and it is submitted that a bare reading of Section 18(1) demonstrates that the terms of the Agreement for Sale, inter alia, in respect of the date for handover of possession would be required to be taken into consideration while adjudicating any liability under Section 18(1) of RERA. The terms of the Agreement for Sale would axiomatically include any attendant provisions which stipulate an extension/exclusion of time for compliance of obligations thereunder. It is submitted that any adjudication under Section 18(1) dehors the terms of the Agreement for Sale or by ignoring the terms thereof or contrary thereto would be perverse and unsustainable in law. The failure or inability to give possession of a unit in accordance with the terms of the Agreement for Sale or duly completed by the date specified in the agreement for sale is the sine qua non for any liability to fasten on the Promoter.
ii. In the present case, the date specified in the Agreement for Sale executed by the Appellant and the Respondent (Clause 14@ Pg. 20 of the Compilation of Lower Court Proceedings) is 31st December 2009, subject to SA 251.2022.doc 29.12 reasonable extension of time in the event of happening of any of the contingencies specified in the same clause. Thus, while adjudicating liability under Section 18(1), the Maharashtra Real Estate Appellate Tribunal was required to consider the said Clause 14 and its effect. However, as is evident from the impugned Order, the Appellate Tribunal has failed to consider the same. Thus, the impugned Order is contrary to the very foundational premise of Section 18(1) of RERA.
iii. It is submitted that this Court in its judgment in Sanvo Resorts Private Limited & Ors. vs. Shital Nilesh Deshmukh 27 and more particularly paragraph No.18 and 19 has inter alia, held that the promoter is entitled to justify delay in completion of construction on the basis of the terms of the agreement for sale, while defending claims under Section 18(1) of RERA.
iv. It is submitted that in case the promoter fails to complete the project despite genuine efforts, the concerned authorities would look into genuine cases and mould reliefs while determining liability under Section 18 of RERA.
Thus, the element of adjudication is inherent under Section 18 of RERA. To substantiate the said contention, reliance is SA 251.2022.doc 29.12 placed on the decision of this Court in the case of Nilkamal Realtors Suburban Pvt. Ltd. & Anr. vs. Union of India & Ors.28 and more particularly on paragraph No.137 of the same.
v. It is submitted that as per the settled legal position, the Court must enforce contracts between the parties as entered into by such parties and cannot rewrite the contracts. It is a Court's duty to give effect to the terms of the bargain struck between the parties.
vi. It is submitted that the terms of the Agreement for Sale executed by the allottee and the promoter are binding on the parties and ought to be enforced by Courts/authorities. The Respondent is relying upon the same Agreement for Sale wherein the Clauses for extension of timelines has been mutually inserted for alleging delay in possession. It is not in dispute that the Respondent has acted in furtherance of the Agreement for Sale. It is not even in dispute that the Respondent has ever challenged or terminated the Clause 14 of the Agreement for Sale. That being the case, the Respondent is bound by the Clauses on extension in the possession date mutually agreed to be inserted in the Agreement for Sale. The Agreement for Sale 28 2017 SCC OnLine Bom 9302 SA 251.2022.doc 29.12 has to be given effect and interpreted as was entered into between the parties and in entirety. Neither party can pick and choose what clause of the Agreement for Sale is binding upon him and what is not. Further, it is settled law that Courts must also enforce Agreements as envisaged between the Parties, and cannot come up with different bargains for either party than what the parties themselves have contracted to in writing.
vii. To substantiate the above contentions, reliance is placed on the following decisions of the Supreme Court:
1. Venkataraman Krishnamurthy v. Lodha Crow Buildmart Pvt. Ltd.[ 2024 INSC 132]
2. Central Bank of India v. Hartford Fire Insurance Co. Ltd.[AIR 1965 SC 1288]
3. Hongkong and Shanghai Banking Corporation Ltd. v. Awaz [2024 INSC 1044]
4. Neelkamal Realtors Suburban Pvt. Ltd. vs. Union of India [2017 SCC OnLine Bom 9302]
5. Bharathi Knitting Company v. DHL Worldwide Express Courier Division of Airfreight Ltd.[(1996) 4 SCC 704]
viii. It is submitted that while enforcing provisions of RERA and determining liability thereunder, the authorities under RERA ought not to curtail the freedom of contract between the parties and contracts which have been entered into freely and voluntarily shall be enforced. In this regard, reliance is placed on the judgment of the Supreme Court in the case of Zoroastrian Co-operative Housing Society Ltd v. District Registrar, Co-operative Society (Urban) [2005) 5 SCC 632] and more particularly paragraphs nos. 27 to 30 of the same. ix. The term "on demand" in the context of the right of an Allottee to refund of amounts paid is found in the main enacting portion of Section 18(1) of RERA and the said term does not find place in the proviso to Section 18(1) of RERA. Accordingly, the Allottee's right under the proviso to Section 18(1) cannot be treated as unqualified. The absence of the words "on demand must be given due consideration in the course of interpretation. x. It is well settled that the function of a proviso is generally to create an exception to what is stated in the main enactment and further that, while interpreting a proviso, care must be taken that it is used to remove/carve out special cases from the general enactment and provide for them separately. In this regard, reliance is placed on the judgment of the Supreme Court in Shah Bhojraj Kovarji Oil Mills and Ginning Factory v. Subhashchandra Yograj Sinha [AIR 1961 SC 1596] and in particular, paragraphs 9 and 10 thereof and also the judgment of the Hon'ble Supreme Court in Sundaram Pillai (supra) and more particularly paragraphs nos. 32 and 33 of the same.
xi. The Supreme Court in Newtech (supra) was considering the import of the principal enactment in Section 18(1), which relates to the Allottee's right of refund of money and not the proviso to Section 18(1), which relates to the right of an allottee to continue in the project and seek interest. Paragraph 24 of the said judgment clearly refers to unforeseen events or stay orders of Court / Tribunal, as being factors which are to be disregarded while considering a claim for refund under Section 18(1). This is because when a party has already made up its mind to seek an exit from the Project, such party cannot be compelled to stay put in the Project, thereby making his right to refund an unconditional/unqualified right. In the present case, the delays have been occasioned on account of foreseen events, which have been set out in the Agreement for Sale executed between the Allottee and the Promoter and which ought to be taken into account while determining any SA 251.2022.doc 29.12 liability under the proviso to Section 18(1) of RERA. It may also be noted that none of the Respondents in any of the Appeals are desirous of a refund. They were admittedly already offered refunds with interest vide letters addressed by the Appellant much before they even filed any case under RERA.
xii. It is is well settled that a judgment is an authority for what is decided by and not anything further. It is also well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision. Attention of this Hon'ble Court is invited to the judgment of the Hon'ble Supreme Court in the case of Bhavnagar University vs. Palitana Sugar Mill (P) Ltd. [(2003) 2 SCC 111], and in particular, paragraph 59 thereof. It is also well settled that the judgments of the Court ought not to be read as provisions of a statute and that the observations therein must be read in the context in which they appear. The reliance is placed on the decision of the Supreme Court in the case of Haryana Financial Corporation vs. Jagdamba Oil Mills [(2002) 3 SCC 496] (paragraph 19).
xiii. It ought to be noted that what was being decided by SA 251.2022.doc 29.12 the Hon'ble Supreme Court of India in Imperia Structures Limited v/s Anil Patni [(2020) 10 SCC 78], more particularly Paragraphs 32 and 34 therein and in Newtech (supra) was not whether or not the right of an allottee under Section 18 was unconditional or not. In fact, none of the five questions framed in Newtech (supra) deal with the aforesaid issue. It is held by the Hon'ble Supreme Court in the case of Arun Kumar Aggarwal v. State of M.P. [(2014) 13 SCC 707], Para 34 therein, that a mere obiter of a Court does not have precedential value. xiv. It has also been held by the Division bench of this Court in the case of Neelkamal (supra) that:
(i) That the authority in genuine cases after considering the mitigating events encountered by the promoter has the power to mould reliefs; and (ii) That the advent of RERA does not rewrite or displace contractual understandings as regards possession entered into by parties prior to the promulgation of RERA. Therefore, even the Division Bench of this Court has laid emphasis on adjudication based on consideration of mitigating events that come under contractual clauses of Agreements entered into between the parties. xv. It is important to note that Clause 2.3 of the model form of agreement for sale, notified under the MahaRERA Rules, 2017 itself provides that possession dates can be subject to extension based on clauses providing extension in an agreement for sale, thereby confirming that even the RERA envisages situations where the developer can be allowed extension on account of reasons outside it's control. In the aforesaid circumstances, it is submitted that firstly, authorities under RERA do not have the power to fix or provide for a fresh date of possession / revise or rewrite the date of possession under Section 18 of RERA. However, the authorities under RERA are bound, by law, to adjudicate and determine the date of possession in the context of exclusion / extensions envisaged in the Contract as well as those arising out of force majeure events, contractual or legal, especially those well within the allottee's knowledge, while adjudicating liability under Section 18 of RERA.
SUBMISSIONS OF THE RESPONDENTS CONCERNING THE FIFTH AND SIXTH SUBSTANTIAL OF LAW:
104. The learned Counsel appearing for the Respondents submitted as follows:
i. The Neelkamal (supra) clearly acknowledges the extension of time to be given to the promoter. Therefore, if SA 251.2022.doc 29.12 the promoter can seek extension of time for the completion of project, which includes the date of possession and the authorities grants such extension then there cannot be any hindrance to the authorities either to fix the date of completion of project including handing over of the possession to the allottees. It is also settled that the delay and/or extension cannot be for indefinite period. In such case the MahaREAT under Section 53 of RERA is competent to grant/fix the date of completion of the project which includes the date of possession. The Supreme Court has decided that there has to be a reasonable time frame for handing over of the possession. The possession should be given in three years, irrespective of the fact that whatever the agreement says. Therefore, the question of law calling upon and referring to the agreement saying that force majeure clause can keep extending the time limit for the purpose of giving possession for unlimited period is not maintainable at all.
ii. It is the settled position of law that RERA is retroactive act and it is applicable to the ongoing projects where the Occupation Certificate has not been granted, the RERA shall be applicable and the act requires the registration of SA 251.2022.doc 29.12 project. Accordingly, the subject project has been registered also. After registration of the project, the promoter can only be absolved from the criminal liability on the extension of the date of possession, but the same cannot absolve the promoter from civil liability, which includes unconditional and unqualified interest on delayed possession.
iii. It is submitted that adjudication of claim under section 18, either for the compensation or interest on delayed possession has to be from the date of the agreement actually entered into between the promoter and the flat purchaser and default is to be considered from the agreed date of possession The RERA being retroactive act when applies to the ongoing project, where the possession has not been given, in such case, once the project is registered, the possession date/ date of completion of the project is to be given by the promoter. In that case, if any default occurs on the part of the promoter, the authorities while adjudicating the claim under section 18 has to refer to the date of possession. The section 6 of RERA grants extension of registration of the project thereby the possession date also gets extended. The section 6 of the RERA does not give automatic extension of the project completion rather there SA 251.2022.doc 29.12 is hearing to take place for the extension of project including the date/time line for giving possession. Therefore, there is no hindrance in fixing the date of possession by the Authorities while adjudicating the claim under section 18 of RERA.
iv. It is further submitted that, in the matter of Pioneer urban land and infrastructure Ltd v. union of India [(2019) 8 SCC 416], the Supreme Court has stated that the allottee of the flats are financial creditors and the money advanced by the allottee to real estate promoter is to be considered as a financial debt. The para 23 of the aforesaid judgment clearly observes that RERA being retroactive act, the registration of the project is only granted by the authority when it is satisfied that the promoter is a bona fide promoter who is likely to perform his part of the bargain satisfactory. Registration of project ensures only for a certain period and can only be extended due to force majeure or events for a maximum period of one year by the authority on being satisfied that such events have in fact taken place, which clearly shows that the authority can extend the period of the project that includes possession. In the present case, after ascertainment of the fact of the Force Majeure clause claimed by the promoter the MahaREAT was kind enough to extend the date of completion of project which includes the date possession after considering their force majeure claims. Therefore, interest on delayed possession was awarded from 1 February 2014 and accordingly the learned MahaREAT ordered the timeline for the completion of the construction only on the inquiry from the learned Counsel, when the learned Counsel informed the percentage of construction completed on that date. In that case it may be fairly concluded that the question of law as framed no. 1 & 2 hereinabove may be fairly deemed as redundant and infructuous.
v. In the matter of Neelkamal (supra), the para 128 of the aforesaid judgment clearly suggest that the delay in handing over the possession would be counted from the date, mentioned in the agreement for sale, entered into by the promoter and the flat purchasers. Which further suggest that while adjudicating claim under section 18, the delay while handing over the possession and interest for the same shall be counted from the date of agreed date of possession mentioned in the agreement. Under the provision of RERA, the promoter is given a facility to revise SA 251.2022.doc 29.12 the date of the completion of project and declare the same. The extension for the completion of project or date of possession, facility is already given to the promoter under RERA. If the promoter has been granted liberty to revise the date of completion of project that does not mean that RERA contemplates to rewrite the contract between the flat purchasers and promoter. The RERA gives opportunity to the promoter to extend the date of the completion of project and revise the date of the possession date. Hence, the same may be also exercised validly by the authorities under the law.
vi. In the matter of Pioneer Urban Land Infrastructure Limited v. Govinda Raghawan 41 the respondents rely upon paragraph nos 6 to 6.8 and paragraph no.7, which clearly shows the importance of the delay in possession of the flat and thereafter it has further discussed in para no.6.1 that a person cannot be made to wait indefinitely for the possession of the flat allotted to him. It has been further recorded in paragraph no.6.3 of the aforesaid judgment that if the promoters are writing, only one-sided agreement, then the same cannot be relied upon and cannot be enforced. Therefore, the agreement cannot be 41 (2019) 5 SCC 725 SA 251.2022.doc 29.12 one-sided, which can be required to be enforced under any law for the time being in force. The para 6.4 and 6.5 of the judgment discusses purposely that how the one-sided agreement has been made in the subject case, and Supreme Court has taken a view that one sided agreement cannot prevail upon. Supreme Court was pleased to further specify about the Constitutional guarantees to all person, promises equality before the law and equal protection of laws. The same principle applies to the equality of bargaining power irrespective of economic strength of the contracting parties. It will also apply to a situation in which weaker party is in a position to obtain goods, services or means legally, upon the terms imposed by the stronger party. So, in the given circumstances, the one-sided agreement or dominating agreement cannot be accepted, cannot be relied upon by the court of law.
vii. The learned MahaREAT in first Appeal no. 52949 of 2021, in the matter of Vinay Agrawal v. Amrita Chakraborty which has persuasive value has discussed in detail about the multiple issues on the basis of the various judgments of Hon'ble Supreme Court and this Court, which are vital to be mentioned here under. The para 14 of the judgment says SA 251.2022.doc 29.12 that respondents have absolute right to claim interest as prescribed under section 18 of the act for delaying delivery of possession of the subject flat. The para of 16 the aforesaid judgment states that the extension of registration granted by MahaRERA in the light of para No. 119, 256 of the judgment of this Court in the case of Neelkamal (supra) clarify and does not contemplate rewriting of contract between the purchaser and the promoter. Para 256 of the judgment further clarify that by giving opportunity to the promoter to prescribe fresh timeline under section 4(2)(1)(c) can not absolve of the liability under agreement for sale. Para 17, further mentions about the delivery date on MahaRERA website, which is revised without consent of the allottee. Therefore, revised project registration/ completion date mentioned on the website cannot be accepted as agreed date of delivery of possession as per Section 18 of the act. It further concludes that, party cannot take advantage of its own wrong. Para 19 of the aforesaid judgment further clarify about the applicability of Act.
viii. The direction was passed by the Hon'ble MahaREAT for completing the construction within the stipulated period, on the basis of the fact that Respondent's (appellant SA 251.2022.doc 29.12 herein) buildings were ready and constructed upto 80% and 90% in year 2018. Because in the same layout when the booking was taken in the year 2006-2007, plan was to construct 490 flats only but now the plan is to construct 1003 flats in the same layout. Therefore, the entire objective of the appellant is to remove the flat purchasers/respondents from the aforesaid project at any cost by creating the adverse circumstances.
ix. It is respectfully submitted that both questions stand concluded in favour of the Respondents. The settled legal position, as affirmed in Imperia Structures Ltd. v. Anil Patni42, categorically holds that the promoter cannot indefinitely postpone possession by relying upon force majeure clauses or contractual stipulations. The Supreme Court therein recognised that allottees are entitled to seek relief under Section 18 of the RERA, notwithstanding any contrary clauses in the agreement.
x. In Pioneer Urban Land & Infrastructure Ltd. v. Govinda Raghavan43, the Apex Court reiterated that flat purchasers cannot be compelled to wait endlessly for possession, and that one-sided clauses enabling promoters 42 (2020) 10 SCC 783 43 (2019) 5 SCC 725 SA 251.2022.doc 29.12 to unilaterally delay handover are unconscionable, opposed to public policy, and unenforceable.
xi. This Court in Neelkamal (supra), upheld the constitutionality of RERA and clarified in para 128 and para 256 that the revised project timelines declared under Section 4 cannot dilute the promoter's liability under the agreement for sale. These pronouncements, read conjointly, establish beyond cavil that the authorities under RERA possess the jurisdiction and indeed the obligation to fix a reasonable date of possession while adjudicating claims under Section 18, and that the promoter cannot evade civil liability by resorting to contractual clauses or extensions.
REASONING CONCERNING FIFTH AND SIXTH SUBSTANTIAL QUESTIONS OF LAW:
105. For considering Substantial Question of Law Nos.5 and 6, it is necessary to analyse Section 18 of RERA. The said Section is reproduced herein below for ready reference: . . . .
106. As far as the scheme under Section 18 of RERA is concerned, the same is discussed in paragraph Nos. 19 to 25 of the Newtech Promoters (supra). The said paragraphs are set out herein below :
"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, 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 SA 251.2022.doc 29.12 revocation of the registration under the Act or for any other reason, the allottee/homebuyer holds an unqualified right to seek refund of the amount with interest at such rate as may be prescribed in this behalf.
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.
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 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 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.
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, it makes the allottees entitled to claim the refund SA 251.2022.doc 29.12 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 recognise right of an allottee two distinct remedies viz. refund of the amount together with interest or interest for 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 the apartment, plot or building within the time stipulated under the terms of the agreement regardless of unforeseen events or stay orders of the court/tribunal, which is in either way not attributable to the allottee/homebuyer, 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 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."
107. Thus the Supreme Court has held that a conjoint reading of sub- sections (1), (2) and (3) of Section 18 of the RERA shows that inter alia different contingencies are spelt out therein including following :
i. The allottee can either seek refund of the amount by withdrawing from the project and in that case such a refund could be made together with interest as may be prescribed and in addition, can also claim compensation.
ii. The allottee is at liberty, to continue in the project, if he does not intend to withdraw from the project and in that case the allottee 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.
# 108. In the matter between Vinay Shravankumar Agrawal v. Bhushan Kashinath Pawaskar44 along with connected Second Appeals this Court has considered the scope of Section 18. The discussion in the said decision is relevant and the same is as under.
# 109. The object and reasons of the said Act and the peculiar position of allottees as explained by the Supreme Court to the effect that 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 i.e. the weakest stakeholder with a high financial exposure clearly shows that the legislative intent to use "shall " in Section 18 of the said Act is to make the same mandatory.
# 110. While interpreting Section 18 of the RERA, in Imperia Structures Limited Vs. Anil Patni & Anr.[(2020) 10 SCC 783], the Supreme Court has held that Section 18 is unqualified right of allottee to get refund and interest at the prescribed rate, by withdrawing from the project, if the promoter fails 44 Decision dated 24th October 2024 in Second Appeal (Stamp) No.9171 of 2023 to give possession of an apartment as per dates specified in the home buyers agreement and also entitled for compensation. It is further held that in case home buyers does not intend to withdraw from the project then he is entitled to and must be paid interest for every month's delay till the handing over of the possession. It is the absolute right of the allottee either to continue in the project or to withdraw from the project. The relevant discussion in the case of Imperia (supra) is in paragraph 25, which reads 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 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 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 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 added)
Thus it is specifically held by the Supreme Court that the proviso to Section 18(1) contemplates the situation where the allottee does not intend to withdraw from the project, however, there is delay in handing over possession of the apartment. In that case, he is entitled to and must be paid interest for every month's delay till handing over the possession and it is the entire discretion of the allottee either to withdraw from the project and seek refund, interest and compensation or to continue with the project and seek interest for every month's delay in handing over possession.
# 111. The scheme of RERA as well as the object and reasons of the RERA, the scope of the relevant provisions and the decisions in Imperia (supra) and Newtech (supra) makes it very clear that an allottee has an unqualified right to either withdraw from the project and to seek refund, interest and compensation and if the allottee does not intend to withdraw from the project, in spite of delay, then the allottee has been given unqualified right to get interest per month for delayed possession till receipt of possession. It is clear that the same is an unqualified right of allottee and there is no conditions attached for exercise of said right.
# 112. In Newtech Promoters (supra), the said para No.25 in the case of Imperia (supra) is quoted with approval in paragraph No.78. The relevant discussion is to be found in paragraph Nos.77 to 80 in Newtech Promoters (supra) which reads as under :
"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 indefeasible right of the allottee to get a return of the amount on demand if the promotor is unable to hand over possession in terms of the agreement for sale or failed to complete the project by the date specified and the justification which the promoter 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 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.
78. This Court while interpreting Section 18 of the Act, in Imperia Structures Ltd. v. Anil Patni [Imperia Structures Ltd.v. Anil Patni, 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 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 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 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 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."
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.
80. The further submission made by the 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 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 of the promoter is equally safeguarded." (Emphasis added)
# 113. In the light of above discussion about the relevant provisions of RERA as interpreted by the Supreme Court, it is necessary to consider the substantial questions of law.
# 114. As noted hereinabove, Section 18 of the RERA gives unqualified statutory right to the allottees if there is delay in handing over possession by the promoter and if the allottee does not intend to withdraw from the project, he shall be paid every month's interest for delay in handing over possession as such rate as may be prescribed. Thus, the statutory right has been created in favour of the allottees i.e. flat purchasers.
# 115. As held in Imperia (supra) and Newtech (supra), right given to the allottees by Section 18 is an unqualified right.
# 116. It is the main submission of learned Counsel appearing for the Appellants that as in Clause No. 14 of the Agreement for Sale executed between the Appellant and the Flat Purchasers in Second Appeal No.260 of 2022, there is clause regarding force majeure, the time for handing over possession stands automatically extended. For considering the said submission, it is necessary to set out said Clause No. 14 of Agreement of Sale, which reads as under :
"14. On Receipt of full and final amount as payable under this agreement by the Purchasers, the DEVELOPERS shall give possession of the said premises to the Purchaser/s on or before 31-12-2010. If the Developers fails to handover the possession of the said flat to the purchaser on the said date, the Developers shall be liable to pay the interest @ 9% (Nine) p.a. to the purchasers as provided under section 8 of MOF Act, 1963, until the possession of the said flat is handed over to the purchasers. If the DEVELOPERS unable keep the said premises ready for occupation on account of reasons beyond its control and of its agents on aforesaid date or the dates prescribed for the payment, the amounts already received by it in respect of the said premises. It is mutually agreed between the Purchaser & Developers that if the Developer is unable to hand over the possession of said flat on above mentioned stipulated date for the reason beyond the control of developers, then developers is not liable to pay any interest as provided under the MOFA. The Developers herein agree that they shall be liable on demand by the Purchaser to refund to the Purchasers the amounts already received by them in respect of the said premises.
Till the said amount is refunded by the Developers to the Purchasers there shall be subject to prior encumbrances if any, be charge on the said premises in question. It is further agreed that upon refund of the said amount as stated hereinabove, the Purchaser shall have no right, title, interest, claim, demand or dispute of any nature whatsoever either against the Developers or against the said preemies in any manner whatsoever and the developers shall be entitled to deal and dispose of the said premises to any person or party as the Developers may desire at their absolute discretion. Provided that the DEVELOPERS shall be entitled to the reasonable extension of time for keeping the said premises ready for occupation on the aforesaid date if the completion of buildings in which the said premises are to be situated is SA 251.2022.doc 29.12 delayed on account of : -
a) Non-availability of steel, cement, other buildings material, water or electricity supply
b) War, civil commotion, act of God;
c) Any notice, order, rule, notification of the Government and/or other public or competent authority court or tribunal any Quasi-judicial body or authority.
d) Delay in getting plans occupancy certificate, completion certificate and permissions from B.M.C. & other authorities.
e) Non-payment and/or delay in payment by the Purchaser/s of the balance amount of the agreed purchase price, as payable in installments on the due dated as stated hereinabove to the DEVELOPERS.
f) Force majeure circumstances or conditions or other the control of or unforeseen by the DEVELOPERS including strikes or other agitation by the workers, employees of laborers of the DEVELOPERS or other contractors or suppliers." (Emphasis added)
# 117. At this stage only, it is required to be noted that as per Clause No. 14, the date fixed for handing over possession is 31 st December 2010, whereas the learned Appellate Tribunal has directed payment of interest to the allottees at the rate of 10.05% per annum effective from 1st February, 2014 till handing over actual possession. In fact, as far as other flat purchasers are concerned the date of handing over possession is 31 st December 2008 and 31st December 2009. The said Order has not been challenged by the allottees. Thus, the extension of time granted upto 1 st February 2014 is beneficial to the Appellants.
# 118. It is required to be noted that in this case, as the Respondents have decided to continue with the project, they have got unqualified right to get interest in view of delayed possession. It is required to be noted that the Agreement for Sale in case of Samira Sultan Ali Mohammed is dated 31 st December, 2007. The agreed date of handing over possession as per Clause 14 is 31 st December, 2010. Admittedly, till 2026, possession of the flat has not been handed over. As noted earlier one of the Respondent i.e. the Allottee has paid 100% of the consideration and some of the Allottees i.e. Respondents have paid between 50% to 60% of the consideration. In any case, most of the Respondents i.e. the Allottees have paid substantial consideration towards the purchase of flats to the Appellant- Promoter about more than 15 years back. The Agreements are of the year 2006-07 and the date of handing over possession is of 2008-10 and till the year 2026 the possession of the respective flats has not been handed over to the respective Allottees. As far as the Tower C is concerned the same has been partly constructed earlier and thereafter it has been demolished and now it has again being constructed.
# 119. Thus, even after a period of almost twenty years of execution of agreement, and after lapse of about sixteen years from the agreed date of handing over possession, the possession has not been handed over.
# 122. Thus, although the date of handing over possession is from 2008-2010, the learned Appellate Tribunal, by taking into consideration several aspects, as set out in the reasons, has specified that payment of interest be granted to the Allottees with effect from 1st February, 2014. It is also required to be noted that as contended by the Respondents, when the agreements were executed with the flat purchasers in the year 2006-2007, the plan was to construct only 490 flats but now the plan is to construct 1003 flats in the same layout. Thus, in fact, the delay has not adversely affected the promoter.
# 123. Although, it is the contention of the Appellants that the circumstances namely pendency of High Court Petition and the SLP are set out in the agreement and therefore, it is specifically mentioned that there will be delay in handing over possession, it is required to be SA 251.2022.doc 29.12 noted that the Appellants have accepted 100% consideration from the Respondents in Second Appeal No. 259 of 2022, the Appellants have accepted from about five Allottees i.e. Respondents consideration of about 50%-60% and from about four Allottees i.e. Respondents consideration of 36%-41% has been accepted. All these amounts were paid about 15 years ago and till the year 2026 the possession of respective flats has not been handed over to the flat purchasers. If it is the case of the Appellants that construction could not be made for the reasons which are already set out in flat purchasers' agreement, then the Appellant should not have accepted the huge considerations.
# 124. As noted herein above, what is granted by the learned Appellate Tribunal is only interest for delayed possession. The factors on which the Appellants have relied and which are considered by the learned Appellate Tribunal in the Impugned Order and granting benefit of extension of about five years and two months/ four years and two months/ three years and two months for respective Allottees for giving interest, are in fact the factors required to be taken into consideration if allottee withdraws from the project and seeks compensation. In all these Second Appeals, the Appellants have continued with the project. As noted hereinabove, even after a delay of more than 18/17/16 years, the allottees could not get possession. The observations of the Supreme Court in Newtech (Supra) in SA 251.2022.doc 29.12 paragraph No. 12 to the effect that 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 is the single largest investment of an individual in his lifetime, the real estate 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, are squarely applicable to the present case. In the present case, the agreements were executed with flat purchasers in the year 2006-2007 wherein the date of handing over possession is 2008-2009-2010 and till 2026, the flat purchasers are not handed over possession even after paying valuable consideration.
# 125. Apart from the reasons given by the learned Appellate Tribunal, as far as Clauses of the Agreement executed between the Appellants and allottees, the same shows that one sided clauses are incorporated. The Supreme Court in the case of Pioneer Urban Land and Infrastructure Limited vs. Govindan Raghavan 46 has held in paragraph Nos. 6.7, 6.8 and 7 as under : . . .
# 126. As already discussed hereinabove, in the present case, the agreements were executed with flat purchasers in the year 2006-2007 wherein the date of handing over possession is 2008/2009/2010 and till 2026, the flat purchasers were not handed over possession even after paying valuable consideration and in these circumstances the Appellants are relying on the clauses of the agreement to deny the benefit to the Allottees of proviso to Section 18(1) of RERA of receiving interest on the amount paid by the flat purchasers due to delay in handing over possession. Thus, the above observations in the case of Pioneer Urban Land and Infrastructure Limited vs. Govindan Raghavan (supra) are squarely applicable to the present case.
# 127. In view of the facts and circumstances of this case, various decisions of the Supreme Court on which the Appellants have relied are not applicable to the present case.
# 128. The contentions of the Appellants regarding proviso to Section 18(1) of RERA are also misconceived as scheme of RERA including of Section 18 of the same has been considered by the Supreme Court in Newtech (supra) and it has been specifically held that allottee has unqualified right to get interest if there is delayed possession. The contention that in Newtech (supra), the Supreme Court was considering the prayer of the home-buyers for refund of the investments made along with interest and therefore the said decision will not apply to the present case as in the present case, the allottees are continuing with the project, is a misconceived contention, as in the Newtech (supra), the Supreme Court has considered and interpreted the scheme of RERA. Thus, various judgments cited regarding a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision will not apply to the present case.
# 129. The reliance on the judgment of Sanvo Resorts Private Limited (Supra) is totally misconceived. In fact, the observations of the said judgment in paragraph Nos. 21 clearly supports the case of the Respondents. The said paragraph No. 21 is as under :
"21. In this context, the Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd.(supra) in paragraphs 22 and 25 has expressly observed that the allottee has an unqualified right to claim interest under Section 18(1) of the RERA Act if the promoter fails to discharge his obligation in accordance with the terms and conditions of the agreement. This unqualified right is not dependent on any contingencies or stipulations and therefore the legislature has consciously provided this right of refund as an unconditional absolute right to the allottee if the promoter fails to give possession within the stipulated time regardless of unforeseen events or stay order of the Court which is in either way not attributable to the allottee."
(Emphasis added)
# 130. The reliance on the judgment of Neelkamal (supra) of this Court is also misconceived as after considering the scheme of the RERA, the Supreme Court in Newtech (supra) has held that the right to receive interest for delayed possession as per Section 18 is unqualified right of the allottee.
# 131. Thus, for the above reasons there is no substance in the Fifth and Sixth Substantial Questions of Law.
# 132. The additional substantial question of law framed by order dated 7th April, 2025 will be considered hereinafter. The said substantial question of law is numbered as seventh and the same is reproduced hereinbelow :
SEVENTH SUBSTANTIAL QUESTION OF LAW :
When agreement in the form of a booking form, gets frustrated on account of force majeure as well as due to making its performance impossible, whether such an agreement can be considered while exercising power under section 18 of RERA?
# 133. This substantial question of law is involved only in Second Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022.
# 134. The submissions in Second Appeal No. 253 of 2022 were advanced by Mr. Rajeev Chavan, learned Senior Advocate and Second Appeal No. 257 of 2022, the same were advanced by Mr. Ditendra Mishra, learned Advocate appearing for the Appellant. Mr. Anjani Kumar Singh has advanced the submissions on behalf of the Respondents.
# 135. The above substantial question of law has been framed as it is the contention of the Appellants that on 18th September, 2007, and 17th January, 2006, respectively, allottees in these two Second Appeals booked respective flats in "C" Wing however, due to certain circumstances, the agreement has frustrated as understood in law and the parties are discharged from obligations thereunder.
# 136. The factual aspects as set out by the Appellants in written submissions regarding Second Appeal No. 253 of 2022 are set out hereinbelow as according to the Appellants, the frustration of contract has taken place due to the said factual aspects.
In Second Appeal No. 257 of 2022 the total consideration is Rs.39,30,250/- whereas, the Respondent has paid on 31 st December 2006 total amount of Rs.15,12,589/-. Thus, about 40% of the consideration has been accepted by the Appellants, whereas about 39% of the consideration has been accepted by the Appellants in Second Appeal No. 253 of 2022.
REASONING REGARDING SEVENTH SUBSTANTIAL QUESTION OF LAW :-
# 139. As the contention is raised by the Appellants regarding frustration of the contract and reliance is placed on Section 56 of the Indian Contract Act, 1872, it is necessary to set out Section 56, which is as follows :
56. Agreement to do impossible act.--An agreement to do an act impossible in itself is void. Contract to do an act afterwards becoming impossible or unlawful.--A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Compensation for loss through non-performance of act known to be impossible or unlawful.-- Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.
# 140. Thus, what first part of Section 56 contemplates is that an agreement to do an act impossible in itself is void. It is not even the contention of the Appellants that by the agreement, what is agreed is to do an impossible act. Therefore the said first part of Section 56 is not relevant.
# 141. Second part of Section 56 contemplates that a contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promiser or could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. It is the contention of the Appellants that as now the said Tower C is demolished, it has become impossible to perform the agreement. Thus, it is necessary to consider whether in the facts and circumstances, it becomes impossible for the Appellants to perform the contract.
# 142. Before considering the above aspect, it is necessary to set out relevant decisions of the Supreme Court interpreting Section 56 of the Contract Act.
# 143. Mr. Chavan, learned Senior Counsel has very heavily relied on the decision of the Supreme Court in the case of Satyabrata Ghose (Supra) and more particularly on paragraph Nos. 9 to 11 and 21 of the same, which read as under :
"9. The first paragraph of the section lays down the law in the same way as in England. It speaks of SA 251.2022.doc 29.12 something which is impossible inherently or by its very nature, and no one can obviously be directed to perform such an act. The second paragraph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. The wording of this paragraph is quite general, and though the illustrations attached to it are not at all happy, they cannot derogate from the general words used in the enactment. This much is clear that the word "impossible" has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promissor finds it impossible to do the act which he promised to do.
10. Although various theories have been propounded by the Judges and jurists in England regarding the juridical basis of the doctrine of frustration, yet the essential idea upon which the doctrine is based is that of impossibility of performance of the contract; in fact impossibility and frustration are often used as interchangeable expressions. The changed circumstances, it is said, make the performance of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an impossibility. The parties shall be excused, as Lord Loreburn says [F.A. Tamplin Steamship Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd., (1916) 2 AC 397 at p. 403 (HL)] : (AC p. 406) "... if substantially the whole contract becomes impossible of performance, or in SA 251.2022.doc 29.12 other words impracticable, by some cause for which neither was responsible." (emphasis supplied) In Joseph Constantine Steamship Line Ltd. v. Imperial Smelting Corpn. Ltd. [Joseph Constantine Steamship Line Ltd. v. Imperial Smelting Corpn. Ltd., 1942 AC 154 (HL)] , Viscount Maugham observed that the "doctrine of frustration is only a special case of the discharge of contract by an impossibility of performance arising after the contract was made". Lord Porter agreed with this view and rested the doctrine on the same basis. The question was considered and discussed by a Division Bench of the Nagpur High Court in Kesari Chand v. Governor General in Council [Kesari Chand v. Governor General in Council, ILR 1949 Nag 718] and it was held that the doctrine of frustration comes into play when a contract becomes impossible of performance, after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Contract Act. We are in entire agreement with this view which is fortified by a recent pronouncement of this Court in Ganga Saran v. Firm Ram Charan Ram Gopal [Ganga Saran v. Firm Ram Charan Ram Gopal, 1951 SCC 1053 at p. 1059 : 1952 SCR 36 at p. 42] , where Fazl Ali, J., in speaking about frustration observed in his judgment as follows : (Ganga Saran case [Ganga Saran v. Firm Ram Charan Ram Gopal, 1951 SCC 1053 at p. 1059 : 1952 SCR 36 at p. 42] , SCC p. 1059, para 17) "17. It seems necessary for us to emphasise that so far as the courts in this country are concerned, they must look primarily to the law as embodied in Sections 32 and 56 of the Contract Act, 1872."
We hold, therefore, that the doctrine of frustration is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of Section 56 of the Contract Act. It would be incorrect to say SA 251.2022.doc 29.12 that Section 56 of the Contract Act applies only to cases of physical impossibility and that where this section is not applicable, recourse can be had to the principles of English law on the subject of frustration. It must be held also, that to the extent that the Contract Act deals with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions. The decisions of the English courts possess only a persuasive value and may be helpful in showing how the courts in England have decided cases under circumstances similar to those which have come before our courts.
11. It seems necessary, however, to clear up some misconception which is likely to arise because of the complexities of the English law on the subject. The law of frustration in England developed, as is well known, under the guise of reading implied terms into contracts. The court implies a term or exception and treats that as part of the contract. In Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3 B&S 826 : 122 ER 309] , Blackburn, J. first formulated the doctrine in its modern form. The court there was dealing with a case where a music hall in which one of the contracting parties had agreed to give concerts on certain specified days was accidentally burnt by fire. It was held that such a contract must be regarded "as subject to an implied condition that the parties shall be excused, in case, before breach, performance becomes impossible from perishing of the thing without default of the contractor". Again in Robinson v. Davison [Robinson v. Davison, (1871) LR 6 Exch 269] there was a contract between the plaintiff and the defendant's wife (as the agent of her husband) that she should play the piano at a concert to be given by the plaintiff on a specified day. On the day in question she was unable to perform through illness. The contract did not contain any term as to what was to be done in case of her being too ill to perform. In an action against the defendant for breach of contract, it was held that the wife's illness and SA 251.2022.doc 29.12 the consequent incapacity excused her and that the contract was in its nature not absolute but conditional upon her being well enough to perform. Bramwell, B. pointed out in course of his judgment that in holding that the illness of the defendant incapacitated her from performing the agreement the court was not really engrafting a new term upon an express contract. It was not that the obligation was absolute in the original agreement and a new condition was subsequently added to it; the whole question was whether the original contract was absolute or conditional and having regard to the terms of the bargain, it must be held to be conditional.
21. It is well-settled and not disputed before us that if and when there is frustration the dissolution of the contract occurs automatically. It does not depend, as does recission of a contract on the ground of repudiation or breach, or on the choice or election of either party. It depends on the effect of what has actually happened on the possibility of performing the contract [Denny, Mott & Dickson Ltd. v. James B. Fraser & Co. Ltd., 1944 AC 265 at p. 275 (HL)] . What happens generally in such cases and has happened here is that one party claims that the contract has been frustrated while the other party denies it. The issue has got to be decided by the court "ex post facto, on the actual circumstances of the case." (Emphasis added)
# 144. Mr. Singh, learned Counsel appearing for the Appellants relied on the decision of the Supreme Court in the case of Energy Watchdog (Supra) and more particularly on paragraph Nos. 34 to 42 and 47, which read as under :
"34. "Force majeure" is governed by the Contract Act, 1872. Insofar as it is relatable to an express or implied clause in a contract, such as the PPAs before us, it is governed by Chapter III dealing with the contingent contracts, and more particularly, Section 32 thereof. Insofar as a force majeure event occurs dehors the contract, it is dealt with by a rule of positive law under Section 56 of the Contract Act. Sections 32 and 56 are set out herein:
"32. Enforcement of contracts contingent on an event happening.--Contingent contracts to do or not to do anything if an uncertain future event happens, cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.
***
56. Agreement to do impossible act.--An agreement to do an act impossible in itself is void. Contract to do act afterwards becoming impossible or unlawful.--A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Compensation for loss through non-performance of act known to be impossible or unlawful.--Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non- performance of the promise."
35. Prior to the decision in Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3 B&S 826 : 122 ER 309 : (1861-73) All ER Rep 24] , the law in England was extremely rigid. A contract had to be performed, notwithstanding the fact that it had become impossible of performance, owing to some unforeseen event, after it was made, which was not the fault of either of the parties to the contract. This SA 251.2022.doc 29.12 rigidity of the Common law in which the absolute sanctity of contract was upheld was loosened somewhat by the decision in Taylor v. Caldwell [Taylor v. Caldwell, (1863) 3 B&S 826 : 122 ER 309 : (1861-73) All ER Rep 24] in which it was held that if some unforeseen event occurs during the performance of a contract which makes it impossible of performance, in the sense that the fundamental basis of the contract goes, it need not be further performed, as insisting upon such performance would be unjust.
36. The law in India has been laid down in the seminal decision of Satyabrata Ghose v. Mugneeram Bangur & Co. [Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310 : (1953) 2 SCC 437 : AIR 1954 SC 44]. The second paragraph of Section 56 has been adverted to, and it was stated that this is exhaustive of the law as it stands in India. What was held was that the word "impossible" has not been used in the section in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose of the parties. If an untoward event or change of circumstance totally upsets the very foundation upon which the parties entered their agreement, it can be said that the promisor finds it impossible to do the act which he had promised to do. It was further held that where the Court finds that the contract itself either impliedly or expressly contains a term, according to which performance would stand discharged under certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be dealt with under Section 32 of the Act. If, however, frustration is to take place dehors the contract, it will be governed by Section 56.
37. In Alopi Parshad & Sons Ltd. v. Union of India [Alopi Parshad & Sons Ltd. v. Union of India, (1960) 2 SCR 793 :AIR 1960 SC 588] , this Court, after setting out Section 56 of the Contract Act, held that the Act does not enable a SA 251.2022.doc 29.12 party to a contract to ignore the express covenants thereof and to claim payment of consideration, for performance of the contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an executable contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an unexpected obstacle to execution. This does not in itself get rid of the bargain they have made. It is only when a consideration of the terms of the contract, in the light of the circumstances existing when it was made, showed that they never agreed to be bound in a fundamentally different situation which had unexpectedly emerged, that the contract ceases to bind. It was further held that the performance of a contract is never discharged merely because it may become onerous to one of the parties.
38. Similarly, in Naihati Jute Mills Ltd. v. Khyaliram Jagannath [Naihati Jute Mills Ltd. v. Khyaliram Jagannath, (1968) 1 SCR 821 : AIR 1968 SC 522] , this Court went into the English law on frustration in some detail, and then cited the celebrated judgment of Satyabrata Ghose v. Mugneeram Bangur & Co. [Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310 : (1953) 2 SCC 437 : AIR 1954 SC 44]. Ultimately, this Court concluded that a contract is not frustrated merely because the circumstances in which it was made are altered. The courts have no general power to absolve a party from the performance of its part of the contract merely because its performance has become onerous on account of an unforeseen turn of events.
39. It has also been held that applying the doctrine of frustration must always be within narrow limits. In an instructive English judgment, namely, Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH [Tsakiroglou & Co. Ltd. v. Noblee Thorl GmbH, 1962 AC 93 : (1961) 2 WLR 633 : (1961) 2 All ER 179 (HL)], despite the closure of the Suez Canal, and despite the fact that the customary route for SA 251.2022.doc 29.12 shipping the goods was only through the Suez Canal, it was held that the contract of sale of groundnuts in that case was not frustrated, even though it would have to be performed by an alternative mode of performance which was much more expensive, namely, that the ship would now have to go around the Cape of Good Hope, which is three times the distance from Hamburg to Port Sudan. The freight for such journey was also double. Despite this, the House of Lords held that even though the contract had become more onerous to perform, it was not fundamentally altered. Where performance is otherwise possible, it is clear that a mere rise in freight price would not allow one of the parties to say that the contract was discharged by impossibility of performance.
40. This view of the law has been echoed in Chitty on Contracts, 31st Edn. In Para 14-151 a rise in cost or expense has been stated not to frustrate a contract. Similarly, in Treitel on Frustration and Force Majeure, 3rd Edn., the learned author has opined, at Para 12-034, that the cases provide many illustrations of the principle that a force majeure clause will not normally be construed to apply where the contract provides for an alternative mode of performance. It is clear that a more onerous method of performance by itself would not amount to a frustrating event. The same learned author also states that a mere rise in price rendering the contract more expensive to perform does not constitute frustration. (See Para 15-158.)
41. Indeed, in England, in the celebrated Sea Angel case [Edwinton Commercial Corpn. v. Tsavliris Russ (Worldwide Salvage & Towage) Ltd. (The Sea Angel), 2007 EWCA Civ 547 : (2007) 2 Lloyd's Rep 517 (CA)] , the modern approach to frustration is well put, and the same reads as under:
"111. In my judgment, the application of the doctrine of frustration requires a multi-factorial approach. Among the factors which have to be considered are the terms of the contract itself, its matrix or context, the parties' knowledge, SA 251.2022.doc 29.12 expectations, assumptions and contemplations, in particular as to risk, as at the time of the contract, at any rate so far as these can be ascribed mutually and objectively, and then the nature of the supervening event, and the parties' reasonable and objectively ascertainable calculations as to the possibilities of future performance in the new circumstances. Since the subject-matter of the doctrine of frustration is contract, and contracts are about the allocation of risk, and since the allocation and assumption of risk is not simply a matter of express or implied provision but may also depend on less easily defined matters such as "the contemplation of the parties", the application of the doctrine can often be a difficult one. In such circumstances, the test of "radically different" is important: it tells us that the doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances." (emphasis in original)
42. It is clear from the above that the doctrine of frustration cannot apply to these cases as the fundamental basis of the PPAs remains unaltered. Nowhere do the PPAs state that coal is to be procured only from Indonesia at a particular price. In fact, it is clear on a reading of the PPA as a whole that the price payable for the supply of coal is entirely for the person who sets up the power plant to bear. The fact that the fuel supply agreement has to be appended to the PPA is only to indicate that the raw material for the working of the plant is there and is in order. It is clear that an unexpected rise in the price of coal will not absolve the generating companies from performing their part of the contract for the very good SA 251.2022.doc 29.12 reason that when they submitted their bids, this was a risk they knowingly took. We are of the view that the mere fact that the bid may be non-escalable does not mean that the respondents are precluded from raising the plea of frustration, if otherwise it is available in law and can be pleaded by them. But the fact that a non-escalable tariff has been paid for, for example, in the Adani case, is a factor which may be taken into account only to show that the risk of supplying electricity at the tariff indicated was upon the generating company.
....
47. We are, therefore, of the view that neither was the fundamental basis of the contract dislodged nor was any frustrating event, except for a rise in the price of coal, excluded by Clause 12.4, pointed out. Alternative modes of performance were available, albeit at a higher price. This does not lead to the contract, as a whole, being frustrated. Consequently, we are of the view that neither Clause 12.3 nor 12.7, referable to Section 32 of the Contract Act, will apply so as to enable the grant of compensatory tariff to the respondents. Dr Singhvi, however, argued that even if Clause 12 is held inapplicable, the law laid down on frustration under Section 56 will apply so as to give the respondents the necessary relief on the ground of force majeure. Having once held that Clause 12.4 applies as a result of which rise in the price of fuel cannot be regarded as a force majeure event contractually, it is difficult to appreciate a submission that in the alternative Section 56 will apply. As has been held in particular, in Satyabrata Ghose case [Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310 : (1953) 2 SCC 437 : AIR 1954 SC 44], when a contract contains a force majeure clause which on construction by the Court is held attracted to the facts of the case, Section 56 can have no application. On this short ground, this alternative submission stands disposed of." (Emphasis added)
145. An analysis of Section 56 of Indian Contract Act as also the SA 251.2022.doc 29.12 above decisions of the Supreme Court in the cases of Satyabrata Ghose (supra) and Energy Watchdog (supra) lay down following principles :
i. Something which is impossible inherently or by its very nature, and no one can obviously be directed to perform such an act.
ii. The second paragraph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done.
iii. This much is clear that the word "impossible" has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promissor finds it impossible to do the act which he promised to do.
iv. Essential idea upon which the doctrine is based is that of impossibility of performance of the contract; in fact impossibility and frustration are often used as SA 251.2022.doc 29.12 interchangeable expressions. The changed circumstances, it is said, make the performance of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an impossibility.
v. The doctrine of frustration comes into play when a contract becomes impossible of performance, after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Contract Act.
vi. The Act does not enable a party to a contract to ignore the express covenants thereof and to claim payment of consideration, for performance of the contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an executable contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an unexpected obstacle to execution. This does not in itself get rid of the bargain they have made. It is only when a consideration of the terms of the contract, in the light of the circumstances existing when it was made, showed that they never agreed to be bound in a fundamentally different situation which SA 251.2022.doc 29.12 had unexpectedly emerged, that the contract ceases to bind.
vii. The performance of a contract is never discharged merely because it may become onerous to one of the parties.
viii. Ultimately, the Supreme Court concluded that a contract is not frustrated merely because the circumstances in which it was made are altered. The courts have no general power to absolve a party from the performance of its part of the contract merely because its performance has become onerous on account of an unforeseen turn of events.
ix. The contract had become more onerous to perform, it was not fundamentally altered. Where performance is otherwise possible, it is clear that a mere rise in freight price would not allow one of the parties to say that the contract was discharged by impossibility of performance.
x. A force majeure clause will not normally be construed to apply where the contract provides for an alternative mode of performance. It is clear that a more onerous method of performance by itself would not amount to a frustrating event.
xi. The application of the doctrine of frustration requires a multi-factorial approach. Among the factors which have to be considered are the terms of the contract itself, its matrix or context, the parties' knowledge, expectations, assumptions and contemplations, in particular as to risk, as at the time of the contract, at any rate so far as these can be ascribed mutually and objectively, and then the nature of the supervening event, and the parties' reasonable and objectively ascertainable calculations as to the possibilities of future performance in the new circumstances.
xii. The doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances.
# 146. Thus, it is clear that the doctrine of frustration comes into play when a contract becomes impossible of performance, after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and as such comes under Section 56 of the Contract Act. However, the performance of a contract is never discharged merely because it may become onerous to one of the parties. It is settled legal position that this doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances.
# 147. Thus, on the touchstone of above principles it is necessary to consider the present case.
# 148. As noted herein above the Appellants have relied on opinion dated 3rd April 2019 of Mahimtura Consultants Private Limited. The said opinion inter alia states that the measures to be employed for retrofitting will require 10 to 12 months and the balance building can only be constructed after retrofitting. It is further stated that the work of retrofitting will have to be undertaken by a specialized contractor and will require prohibitive costs. These reasons inter alia set out in said opinion dated 3rd April 2019 clearly shows that case for invocation of Section 56 of the Contract Act is not made out. As per the settled legal position the performance of a contract is never discharged merely because it may become onerous to one of the parties and that this doctrine is not to be lightly invoked; that mere incidence of expense or delay or onerousness is not sufficient; and that there has to be as it were a break in identity between the contract as provided for and contemplated and its performance in the new circumstances. It is required to be noted that the other two towers namely B1 and B2 in the same layout were constructed after retrofitting. The said towers are also situated in same circumstances. It is surprising and shocking that the Appellants has not invoked the doctrine of frustration with respect to those towers. In fact, there is substance in the contention raised on behalf of the Respondents that the said doctrine of frustration is invoked to garner more benefit and double profit and consumption of complete layout benefit under DCPR, 2034. It is significant to note that earlier only 22 floors were to be constructed and now the permission has been granted to construct 48 floors. Thus, it is very clear that the Appellant has invoked this clause of frustration just to deprive the Respondents in Second Appeal No. 253 of 2022 and Second Appeal No.257 of 2022, their statutory rights and to garner more benefit.
# 149. It is further significant to note that the Appellants have obtained permission for demolition of tower C and construction of a new tower of 48 floors from Municipal Corporation of Greater Mumbai by giving a declaration dated 19 th February 2019, inter alia stating as follows:
"9. We further state and declare that the rights of the existing/ current purchasers of Apartments/ flats/ premises in Building No.C will be safeguarded."
# 150. It is shocking to note that the Appellants obtained the permission from MCGM for demolition of Building No. C by playing fraud as false undertaking has been given stating that the Appellants would protect and safeguard the rights of the flat purchasers in Building No.C and after getting approval for construction of 48 floors and after demolishing Building No.C now the Appellants have malafidely invoked doctrine of frustration. Thus, these two Second Appeals namely Second Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022, are required to be dismissed with exemplary costs of Rs.1,00,000/- each to be paid by the Appellants to the respective Respondents.
# 151. Thus, for the above reasons there is no substance in the Seventh Substantial Question of Law.
# 152. Hereinafter, the substantial question of law no.7 framed by order dated 24th December 2024 shall be taken up for consideration. The same is now numbered as the Eighth substantial question of law.
EIGHTH SUBSTANTIAL QUESTION OF LAW :
Whether the impugned Judgment and Order is perverse and unreasoned?
# 153. At the outset it is required to be noted that while making oral submissions although the same were advanced in great detail with respect to all other substantial questions of law, neither of the parties have advanced any submissions with respect to this substantial SA 251.2022.doc 29.12 question of law. However, in the written arguments certain submissions with respect to this substantial question of law are incorporated.
REASONING CONCERNING EIGHTH SUBSTANTIAL QUESTION OF LAW:-
# 156. As already noted herein above, no oral submissions were raised with respect to this substantial question of law. In fact the written submissions of the Appellants except general contentions, do not make any reference to the particulars i.e. the point which is argued and not considered by the learned designated Appellate Tribunal.
# 157. As already noted herein above, the learned designated Appellate Tribunal has passed the impugned order by giving detailed reasons. In fact, while considering various aspects as set out in paragraph No.13 to 17, which are already set out in earlier part of this judgment, the learned designated Appellate Tribunal has granted interest to the allottees w.e.f. 1st February 2014, although the possession date as per the agreements executed with allottees were of the year 2008-2010.
# 158. It is correct that Supreme Court in various decisions has held that giving of reasons in support of conclusions and findings is an indispensable part of compliance with the principles of natural justice. However, in this particular case, detailed reasons are given by SA 251.2022.doc 29.12 the learned designated Appellate Tribunal. Apart from that, no particulars are pointed out to this Court with respect to this aspect.
# 159. Thus, there is no substance in the contentions raised by the Appellants.
# 160. Thus, for the above reasons there is no substance in the Eighth Substantial Question of Law.
FINAL ORDER:
# 161. For the above reasons, there is no substance in any of the Substantial Questions of Law raised by the Appellants.
# 162. Accordingly, all the Second Appeals are dismissed with costs.
# 163. Second Appeal No.251 of 2022, Second Appeal No.254 of 2022, Second Appeal No.255 of 2022, Second Appeal No.256 of 2022, Second Appeal No.258 of 2022, Second Appeal No.259 of 2022, Second Appeal No.260 of 2022 and Second Appeal No.261 of 2022 are dismissed with costs of Rs.10,000/- in each of the Second Appeals to be paid to the respective Respondents, within a period of four weeks from today.
# 164. Second Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022 are dismissed with a cost of Rs.1,00,000/-, to be paid to the respective Respondents, within a period of four weeks from today.
# 165. In view of the dismissal of the Second Appeals, nothing SA 251.2022.doc 29.12 survives in the Civil Applications/Interim Applications and the same are also disposed of.
# 166. After pronouncement of this judgment, Mr. Kamat, learned Senior Advocate seeks stay of this judgment and order and continuation of the interim order dated 4 th December 2018 which was operating in these Second Appeals. However, the position on record shows that the Agreement with respective Appellants, i.e., flat purchasers are of the year 2006-2007. After a period of 20 years, possession is not handed over to the flat purchasers. As far as Second Appeal No. 253 of 2022 and Second Appeal No. 257 of 2022 are concerned, this Court, on the basis of undertaking submitted by the Appellants, has recorded that the permission from the MCGM for demolition of Tower C has been obtained by misrepresenting the MCGM and by playing fraud on MCGM by representing that the flat purchasers' interest would be safeguarded and thereafter now belatedly for the first time at the stage of Second Appeal, contention is raised regarding frustration of the contract.
# 167. Accordingly, no case is made out for grant of stay of this order.
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