The Bombay High Court has held that when a Real Estate Regulatory Authority dismisses a complaint solely on maintainability grounds without adjudicating merits, the Appellate Tribunal cannot itself decide the dispute on merits but must remand it for fresh adjudication. The Court set aside the Maharashtra Real Estate Appellate Tribunal's order which had proceeded to hear the complaint on merits after overturning MahaRERA's maintainability ruling, affirming that appellate forums cannot bypass the first-instance adjudicatory layer.
Background & Facts
The Dispute
The appellant, Keyana Estate LLP (promoter), challenged an order dated 19 March 2025 passed by the Maharashtra Real Estate Appellate Tribunal, Mumbai, in Appeal No. AT00600000214962 of 2024. The Tribunal had directed that it would proceed to decide the appeal on merits instead of remanding the proceedings to the Maharashtra Real Estate Regulatory Authority (MahaRERA) for adjudication. The underlying dispute arose from a complaint filed by the respondents, Ashok D. Karwa and another (allottees), before MahaRERA.
Key Facts
- The respondents (allottees) filed Complaint No. CC0600000094344 before MahaRERA against Keyana Estate LLP
- MahaRERA dismissed the complaint by order dated 2 April 2024 solely on the ground that the agreement between parties contained an arbitration clause, rendering the complaint not maintainable
- The complaint was dismissed on a preliminary point of maintainability without any adjudication on merits
- The allottees filed Appeal No. AT00600000214962 of 2024 before the Maharashtra Real Estate Appellate Tribunal challenging MahaRERA's order
- The Appellate Tribunal, after being satisfied that the complaint was maintainable in law notwithstanding the arbitration clause, directed that it would itself decide the appeal on merits rather than remanding the complaint to MahaRERA for adjudication
- The Appellate Tribunal's order dated 19 March 2025 was challenged in the present Second Appeal
- The Appellate Tribunal had adopted a different course in a similar matter, Smt. Sunita Singh and Anr. v. Keyana Estate LLP (Appeal No. AT0060000000214983 of 2024, decided 24 March 2025), where it remanded the complaint to MahaRERA
- In the present case, the Appellate Tribunal departed from that approach because the complainants were senior citizens
Procedural History
- 2 April 2024: MahaRERA passed order dismissing Complaint No. CC0600000094344 on maintainability grounds (arbitration clause)
- 2024: Respondents filed Appeal No. AT00600000214962 of 2024 before Maharashtra Real Estate Appellate Tribunal
- 19 March 2025: Appellate Tribunal passed impugned order holding complaint maintainable but deciding to adjudicate merits itself
- 2025: Keyana Estate LLP filed Second Appeal No. 408 of 2025 before Bombay High Court
- 21 October 2026: Bombay High Court (Justice Sandeep V. Marne) delivered judgment
The Parties' Positions
Appellant (Keyana Estate LLP): Contended that once the Appellate Tribunal found MahaRERA's maintainability ruling erroneous, the only lawful course was to remand the complaint to MahaRERA for adjudication on merits. The Appellate Tribunal cannot act as a court of first instance and adjudicate merits for the first time in appeal.
Respondents (Allottees): Relied on Nadakerappa v. Pillamma (Civil Appeal Nos. 7657 of 2017, decided 31 March 2022) where the Supreme Court held that remand cannot be ordered as a matter of course and the appellate court should decide on merits when both sides have led evidence. Argued that convenience and advanced age of complainants justified the Tribunal deciding merits directly.
Relief Sought
The appellant sought setting aside of the Appellate Tribunal's order dated 19 March 2025 and remand of the complaint to MahaRERA for adjudication on merits.
The Legal Issue
The central question was: When the Regulatory Authority dismisses a complaint on maintainability grounds without deciding merits, and the Appellate Tribunal disagrees with that maintainability ruling, can the Appellate Tribunal itself proceed to adjudicate the complaint on merits, or is it bound to remand the matter to the Regulatory Authority for first-instance adjudication?
Arguments Presented
For the Appellant
Mr. Aniket Deshmukh argued that appeal is a statutory remedy which cannot be curtailed by the Appellate Tribunal undertaking a first-time merits adjudication. The principle that an appellate court cannot bypass the trial court layer is well-established: when a suit is dismissed on a preliminary point (such as Order VII Rule 11 CPC) and the appellate court disagrees, the only course is remand for trial. The Appellate Tribunal's decision to adjudicate merits itself deprived the appellant of one statutory appeal. The judgment in Nadakerappa v. Pillamma was distinguishable because there the trial court had already decided the suit on merits after full evidence.
For the Respondents
Mr. Nilesh Gala relied on paragraph 25 of Nadakerappa v. Pillamma where the Supreme Court held that remand cannot be passed as a matter of course and the appellate court must endeavour to dispose of the case on merits when both sides have led oral and documentary evidence. Contended that the Appellate Tribunal was justified in deciding merits directly given the senior citizen status of complainants and the interest of expeditious justice.
The Court's Analysis
The Court framed the substantial question of law and answered it through a careful distinction between two procedural scenarios. The Court held that the principle in Nadakerappa applies only where the trial court has already adjudicated on merits and the appellate court is seized of the entire evidentiary record. In such cases, a routine remand for fresh adjudication would be futile.
"It is well settled principle of law that judgment is an authority for what it decides and not what can be logically deduced therefrom. Therefore, judgment in Nadakerappa (supra) cannot be interpreted to mean that even in case where the Trial Court dismisses the Suit, on preliminary point without deciding the merits of the Suit, the Appellate court is still prohibited from remanding the suit for adjudication on merits. On the contrary the law requires the Appellate Court to remand the proceedings to the Trial Court and not to venture into merits of the dispute."
The Court emphasized that appeal is a statutory remedy which cannot be curtailed by the Appellate Court/Tribunal by undertaking decision on merits for the first time. Merits must be adjudicated by the court of first instance; the appellate court can only sit in appeal over such adjudication. Any decision by the Appellate Court on merits in absence of prior adjudication by the Trial Court would vitiate the decision.
The Court rejected the argument that convenience of parties or their advanced ages could justify the Appellate Tribunal usurping the power of the first-instance adjudicator. The supervisory and corrective jurisdiction of an appellate court does not permit it to act as an originating court. The higher court cannot bypass the entire layer of judicial machinery by deciding the question for the first time in appeal.
The Court noted that the Appellate Tribunal itself had followed the correct course in Smt. Sunita Singh v. Keyana Estate LLP (decided 24 March 2025) by remanding the complaint to MahaRERA after holding it maintainable. The departure in the present case solely because complainants were senior citizens was legally impermissible.
The Verdict
The Second Appeal was allowed. The Court set aside the Appellate Tribunal's order dated 19 March 2025 in Appeal No. AT00600000214962 of 2024. Complaint No. CC0600000094344 was remanded to MahaRERA for adjudication on merits. MahaRERA was directed to decide the remanded complaint as expeditiously as possible, preferably within six weeks without seeking any extension. Parties were directed to appear before MahaRERA on 23 October 2026 with a copy of the order to apply for fixation of hearing dates. All contentions on merits were expressly kept open. No order as to costs. The Interim Application No. 9498 of 2025 was disposed of as not surviving.
What This Means For Similar Cases
Appellate Forums Cannot Act as Courts of First Instance
The judgment reinforces a fundamental principle of appellate jurisprudence: an appellate body's role is corrective, not original. When a first-instance authority (whether a court, tribunal, or regulatory body) dismisses a matter on a preliminary ground without touching merits, the appellate forum must remand for first-instance adjudication. It cannot substitute its own merits determination, regardless of expediency or party convenience. Practitioners should challenge any appellate order that adjudicates merits for the first time in such scenarios.
Nadakerappa Distinguished: Context Matters for Remand
The Supreme Court's observation in Nadakerappa that "remand cannot be passed as a matter of course" applies only where the trial court has already decided the case on merits after full evidence. It does not apply where the trial court dismissed the case on a preliminary point. Lawyers must carefully distinguish the procedural posture when citing Nadakerappa - it is not a blanket prohibition on remand. The Bombay High Court's clarification provides a clear test: has the first-instance authority adjudicated merits? If no, remand is mandatory; if yes, appellate court may decide on merits.
Senior Citizen Status Does Not Override Procedural Mandate
While the RERA Act and consumer protection jurisprudence emphasize expeditious resolution for senior citizens, this judgment makes clear that procedural integrity cannot be sacrificed for speed. The Appellate Tribunal's well-intentioned departure from its own prior practice (Sunita Singh) was corrected. Practitioners representing senior citizens should seek expedited remand with strict timelines (as the Court did here - six weeks) rather than urging the appellate forum to adjudicate merits directly.
- Actionable takeaway: In RERA appeals where the Authority dismissed on maintainability, insist on remand to the Authority with a fixed timeline for merits adjudication
- Drafting tip: When filing appeals before RERA Appellate Tribunals, include a specific prayer for remand in the event maintainability is upheld, citing this judgment
- Precedent value: This decision binds all benches of the Bombay High Court and is persuasive for other High Courts interpreting similar appellate structures under RERA
