Allahabad High Court
U.P. State Industrial Development ... vs Ankur Gupta on 7 October, 2025
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
HIGH COURT OF JUDICATURE AT ALLAHABAD
LUCKNOW
RERA Appeal No.37 of 2022
U.P. State Industrial Development Authority, Trans Ganga City, Unnao Thru. Senior Project Officer
. Petitioner
Versus
Ankur Gupta
.Respondent
ALONG WITH
RERA Appeal No.38 of 2022 RERA Appeal No.39 of 2022
RERA Appeal No.41 of 2022 RERA Appeal No.42 of 2022
RERA Appeal No.43 of 2022 RERA Appeal No.44 of 2022
RERA Appeal No.45 of 2022 RERA Appeal No.46 of 2022
RERA Appeal No.47 of 2022 RERA Appeal No.48 of 2022
RERA Appeal No.49 of 2022 RERA Appeal No.50 of 2022
RERA Appeal No.51 of 2022 RERA Appeal No.52 of 2022
RERA Appeal No.53 of 2022 RERA Appeal No.54 of 2022
RERA Appeal No.55 of 2022 RERA Appeal No.56 of 2022
RERA Appeal No.57 of 2022 RERA Appeal No.58 of 2022
RERA Appeal No.59 of 2022 RERA Appeal No.60 of 2022
RERA Appeal No.61 of 2022 RERA Appeal No.62 of 2022
RERA Appeal No.63 of 2022 RERA Appeal No.64 of 2022
RERA Appeal No.65 of 2022 RERA Appeal No.66 of 2022
RERA Appeal No.67 of 2022 RERA Appeal No.68 of 2022
RERA Appeal No.69 of 2022 RERA Appeal No.70 of 2022
RERA Appeal No.71 of 2022 RERA Appeal No.72 of 2022
RERA Appeal No.73 of 2022 RERA Appeal No.74 of 2022
RERA Appeal No.75 of 2022 RERA Appeal No.76 of 2022
RERA Appeal No.77 of 2022 RERA Appeal No.78 of 2022
RERA Appeal No.79 of 2022 RERA Appeal No.80 of 2022
RERA Appeal No.81 of 2022 RERA Appeal No.07 of 2025
RERA Appeal No.08 of 2025 RERA Appeal No.09 of 2025
RERA Appeal No.10 of 2025 RERA Appeal No.11 of 2025
Counsel for Petitioner(s)
:
Kartikey Dubey
Counsel for Respondent(s)
:
Abhishek Khare, Aahuti Agarwal, Deepak Dwivedi, Mohd. Murtaza Khan
Reserved: 25.08.2025
Pronounced: 07.10.2025
HON'BLE PANKAJ BHATIA, J.
J U D G M E N T
1. Heard Sri Sudeep Seth, learned Senior Advocate assisted by Sri Kartikey Dubey, learned Counsel appearing on behalf of the appellant as well as Sri Deepak Dwivedi and Mohd. Murtaza Khan, learned Counsel appearing on behalf of the respondent.
2. The present bunch of appeals has been filed challenging the order dated 31.08.2022 passed by the Uttar Pradesh Real Estate Appellant Tribunal, Lucknow (hereinafter referred to as the Appellate Tribunal), whereby the appeals were dismissed.
3. Since the facts and issues involved in all the appeals are similar, as such, all these appeals mentioned above are being decided by means of this common judgment.
4. For the sake of convenience, the RERA Appeal No.37 of 2022 is being taken as a leading case.
5. The facts as argued by the Counsel for the appellant are that the appellant had floated a project known as Trans Ganga City, Unnao and applications were invited for allotment of residential plots. The expected date of delivery of possession was indicated as December, 2016. In terms of the brochure issued by the appellant, the respondents applied for allotment of residential plots. In the said allotment letters issued to the respondents, no date of delivery was communicated in the said allotment letters. It is stated that subsequently, on account of Kisan Union agitation, the plots can be handed over to the appellants subsequently.
6. It is stated that the respondents have filed complaints before the Regulatory Authority claiming interest for delayed possession in terms of the agreement and the claim was made for grant of 14% interest. The said application was resisted and the ground taken by the appellant was that one of the reasons for delay was the farmers agitation. It is stated that on 24.12.2020, an affidavit was filed before the Appellant Tribunal under Section 4(2) of The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the RERA Act), wherein, the date of completion was shown as 31.03.2022. On 08.09.2021, the Appellate Tribunal allowed the complaints filed by the respondents and treating the expected date of possession to be December, 2016 mentioned in the brochure granted interest on the delay @ MCLR + 1% interest from December, 2016. The Appellate Tribunal took recourse to the provisions of Section 2 (za) (1). The interest was granted from the date of expected possession disclosed in the brochure i.e. December, 2016 up to the grant of OC/ CC (Occupancy Certificate/ Completion Certificate) or till the date of offer of possession, whichever is later. The period from 25.03.2020 up to 25.09.2020 was exempted from the payment of interest on the ground of force majeure. Aggrieved against the aforesaid order dated 08.09.2021, the appellants before this Court preferred an appeal before the Appellate Tribunal in which reliance was placed upon the judgment of the Honble Supreme Court in the case of Bangalore Development Authority vs Syndicate Bank, 2007 (6) SCC 711.
7. It was also argued on behalf of the appellants that the Rule 9.2 of the Uttar Pradesh Real Estate (Regulation & Development) (Agreement for Sale/Lease) Rules, 2018 (hereinafter referred to the Rules 2018) was also placed to show that there was no prescriptions of interest. It is also argued that the delay in delivery of possession has benefited the allottee, as the property has been appreciated. Along with the appeals, the interest amount was also deposited as required under Section 43(5) of the RERA Act. On 31.08.2022, the Appellate Tribunal dismissed the appeals upholding the order passed by the authority. The said impugned order dated 31.08.2022 has been challenged before this Court and the RERA appeals were admitted by this Court and the following substantial questions of law were framed:
(i) Whether the Tribunal has acted in derogation of the powers contained under Section 44 read with Section 43 (5) of the Act of 2016?
(ii) Whether the allottee is entitled to interest if the project is delayed and whether in absence of any prescription as made in Rule 15 the Clause 9.2 of the Profarma agreement to sale which has been appended in the Uttar Pradesh Reat Estate (Regulation and Development) Rules, 2018 can be adhered to especially when they are only illustrative and indicative and not binding.
8. On the basis of the points of determination as framed, the parties were heard.
9. The submission of the Counsel for the appellants are that the Section 2(za) of the RERA Act prescribes interest, Section 2 (zi) defines the word prescribed and Section 2(zp) defines the word Rules. It is also argued that in terms of the proviso to Section 3(1), in respect of the ongoing projects for which completion certificate was not issued, promoters are required make application to RERA for registration of the project in three months and an application is to be filed in terms of Section 4(2)(1)(c) giving an undertaking in respect of the date by which the project is to be completed. Reliance is also placed upon Section 18(1) of the RERA Act with emphasis of the phrase used as the case may be. It is further argued that the interest of delay as provided under Section 18 is the statutory interest prescribed under The Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 (hereinafter referred to as RERA Rules) and not the contractual rate. Since the project is ongoing project and no agreement to sale as prescribed under Section 13(2) has been entered into in between the parties as such there is no prescribed interest payable.
10. It is further argued on behalf of the appellants that the rate of interest also finds mention under Section 84(2)(i)(j) and Section 84 (2)(h) of the RERA Act. It is also argued that in terms of the powers conferred under Section 84 of the RERA Act, no rate of interest have been prescribed under Rule 15 of the RERA Rules in the State of U.P. It is also argued that the Clause 9.2 contained in the Rules 2018 cannot be borrowed as has been done by the Authority and the Appellate Tribunal.
11. The Counsel for the respondents on the other hand argue that both the authorities have considered the statutory provisions and have rightly awarded the interest as admittedly there was a delay.
Question No.(i) Whether the Tribunal has acted in derogation of the powers contained under Section 44 read with Section 43 (5) of the Act of 2016?
Answer:
12. The Question No.(i) with regard to the powers of the Appellant Tribunal under Section 44 read with Section 45 of the RERA Act, i.e. the first issue, which was extensively considered by this Court in the case of Ratan Buildtech Private Limited vs Anil Kumar (RERA Appeal No.72 of 2025), decided on 04.09.2025 (corrected vide order dated 09.09.2025) as issue no.2. This Court after analyzing the provisions of the RERA Act and the RERA Rules held as under:
26. On plain reading of the RERA Act and the mandate contained therein, what emerges is that the RERA Act was enacted to protect the allottee in the Real Estate Project and for regulating the Real Estate Sector. Various prescriptions are contained in the RERA Act, which flow essentially from Chapter III, which prescribes for functioning and duties of the promoters and Chapter IV prescribes for rights and duties of the allottee. Several other provisions are also contained in the Act with regard to the grant of interest and/or compensation in the event of any default committed by the promoters and complying with any of the stipulations contained in Chapter III, however, interest is specifically prescribed in Section 18(1), which is in two parts in respect of allottees who wish to withdraw from the project and the allottees who wish to continue with the project.
In case of allottees who wish to withdraw Interest is payable on demand at prescribed rates in accordance with the agreement of sale or the date of due completion as specified therein.
In case of allottees who wish to continue with the project Interest is payable for every month of delay, till the handing over of the possession, at such rates as may be prescribed. In the said section the date from which the interest is payable is not provided.
13. The argument raised by the present appellants was also raised in the context of the phrase as the case may be was considered and answered in the case of Ratan Buildtech Private Limited vs Anil Kumar (Supra) in the following manner:
27. An attempt was made by Sri Sudeep Kumar, learned Counsel for the appellant to argue on the foundation of the phrase as the case may be used in Section 18 of the RERA Act to argue that the said phrase would include within its ambit, the delay, which may occur on account of force majeure clause or any eventuality beyond the control of the builder/ promoter like in the present case, where the authority concerned has failed to grant completion certificate, which resulted in delay of handing over the flats in question.
28. The said argument deserves to be rejected for the simple reason that Section 18, in its plain language, prescribes for two eventualities; firstly, the grant of interest and secondly, the grant of compensation on account of there being any default on the part of the promoter. The phrase as the case may be used in the context of there being two eventualities for awarding interest prescribed under Section 18 itself. Firstly being the promoter fails to complete AND second being where Promoter is unable to give possession the phrase as the case may be in Section 18(1)(a), is to cater to these two situations. To further clarify the meaning as emerges from the plain reading of Section 18 (1) (a), if the promoter fails to complete the project interest is payable according to the agreement for sale and where the Promoter fails to give possession, interest is payable with reference to duly completed by the date specified It is to meet the said two eventualities that the phrase as the case may be is used.
31. The question no.(i) is with regard to the scope of powers of the Tribunal in granting the interest directly in exercise of its appellate powers prescribed under Section 43. Heading of Section 44 of the RERA Act describes application for settlement of disputes and appeals to appellate tribunal, thus, the said Section has two parts, firstly prescribing for an appeal against an order of an Adjudicating Officer, which can be entertained and decided within the time prescribed and in the manner as prescribed, and the second power conferred on the Tribunal as mentioned in Section 44(6) which is basically revisional powers vested in the Appellate Tribunal for examining the legality and propriety and correctness of any order or direction of the Authority or the Adjudicating Officer on its own motion or otherwise, thus, the Tribunal is vested with appellate as well as revisional powers. Although not mentioned in strict sense, it is clearly well settled that the Appellate Authority, wherever prescribed, is entitled to exercise the powers of the authority, against whose order, the appeal has been preferred at the appellate stage, more so, when no appreciation of evidence is required and only a mechanical exercise is to be performed by the Regulatory Authority. The said analogy also flows from the mandate of Order XLI Rule 24 of C.P.C., although not applicable in stricto sensu, however, the principles can be applied to hold that the authority has the power to pronounce judgment based upon the material on record, which according to the appellate court is sufficient to pronounce the judgment or finally determine the lis in the present case being award of interest.
14. The power of the Appellate Tribunal under Section 43(5) of the RERA Act was considered as raised and framed as Question No.(ii) in Ratan Buildtech Private Limited vs Anil Kumar (Supra) and answered in the following manner:
33. Coming to the Question No.(ii), as framed with regard to the power and the nature of deposit made under Section 43(5) and the power to direct the appropriation of the said amount as has been done by the Tribunal.
34. To analyse the said provision, Section 43(5) provides for a condition to be fulfilled by the appellant/ promoter as pre-deposit for the appeal to be entertained by the Tribunal. The nature and scope of predeposit as prescribed under Section 43 (5) is contained in various statutes as a condition for preferring an appeal and was considered extensively by Honble Supreme Court in the case of Harinagar Sugar Mills Ltd. vs State of Bihar and others:(2003) 11 SCC 40, wherein, Honble Supreme Court analyse the similar provisions, which are as under:
11. The main question, however, that needs to be considered is whether the amount deposited in view of Section 27-B of the Act is deposit of the liability of dues of fee assessed or not.
12. The amount in respect of which the Appellate Authority is to be satisfied that it has been so deposited, according to Section 27-B of the Act has to be in certain proportion of the amount of fee assessed and due. That is to say, the liability of the assessee is already fixed and the amount assessed is treated to be amount due to be paid, it is an ascertained amount out of dues which must be paid to the Committee. Therefore, there can hardly be any doubt about the fact that it is a part of the amount out of the total liability outstanding against the appellant which the appellant is required to pay to the party viz. the Market Committee before filing an appeal. It is not a deposit in court or with the Appellate Authority. Merely because liability in certain proportion is ensured to be in deposit before filing of an appeal, does not change the character of the deposit of a part of dues which is also specifically described to be fee assessed as due. It is not provided that the deposit is by way of security which would generally not be required to be paid to the party. Such deposits like security deposits are of different kind which are sometimes found provided for without reference to any monetary liability involved in the case e.g. in an election petition or other proceedings where some amount of security may be required to be deposited. In the present case, there is no scope to treat the amount deposited as anything else except part of the fee assessed and due. It is to be noted that the provision under Section 27-B of the Act is that the Appellate Authority is to be satisfied that the appellant has deposited with the Market Committee one-third of the fee assessed before he files an appeal. It is quite obvious that in case the appeal fails what would be required to be deposited would only be the balance of the amount of the liability, if that too is not already paid. In case the appeal succeeds, the amount paid against assessed liability which is later set aside cannot be retained and in the normal course, it is liable to be refunded, unless of course for some good reasons, it is ordered otherwise. For example, where it may amount to undue enrichment of the appellant. In the case of the appeal being unsuccessful, in the normal course, nothing more would be required to be done to the extent of deposit made. Therefore, merely, because the amount deposited may have to be refunded in case an appeal succeeds that alone does not mean that the nature of the deposit is changed or it is anything else except the amount of levy assessed and due, particularly looking to the language used and provision made under Section 27-B of the Act, where the Appellate Authority has only to be satisfied about the payment made to the Committee. Some observations relating to deposit of the tax liability while filing an appeal, though in a slightly different context, throw some light as to the nature of the deposit. In Anant Mills Co. Ltd. v. State of Gujarat [(1975) 2 SCC 175], SCC at pp. 202-03, para 40, this Court observed:
In the absence of any special reasons there appears to be no legal or constitutional impediment to the imposition of such conditions. It is permissible, for example, to prescribe a condition in criminal cases that unless a convicted person is released on bail, he must surrender to custody before his appeal against the sentence of imprisonment would be entertained. Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment of tax unless the tax had been paid. Such a provision was on the statute-book in Section 30 of the Indian Income Tax Act, 1922. The proviso to that section provided that no appeal shall lie against an order under sub-section (1) of Section 46 unless the tax had been paid. Such conditions merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the legislature to impose an accompanying liability upon a party upon whom legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfilment of that condition in case the party concerned seeks to avail of the said right is a valid piece of legislation, and we can discern no contravention of Article 14 in it.
(Emphasis supplied) It appears that imposition of a precondition of deposit of the liability before filing an appeal was challenged but it is clearly held that a party while availing of a right to appeal conferred under a statute can be required to discharge the tax liability. Such a deposit made is described as discharge of liability. Such a condition imposed, would not change the nature of the amount paid or deposited out of the amount as assessed and found due. No doubt it is true that order assessing the liability remains under challenge but such a deposit made discharges the liability of the payment of the amount assessed and found due, to the extent of deposit made, subject indeed to the decision of the appeal.
13. We have already noticed that in all the cases cited by the learned Senior Counsel Shri Shanti Bhushan on behalf of the appellant, the appeals were allowed and the amount was held to be refundable. Even in one of the cases, Voltas case [(1999) 112 ELT 34 : (1998) 76 DLT 841 (Del)] where after setting aside the order of assessment the matter was remanded, it was held that there was no good reason or any order against which the amount deposited as a precondition to file an appeal, could be retained. Fresh order was awaited. But where amount of liability has been assessed and fixed and the order exists, pre-appeal deposit will be nothing else but payment of a part of the liability assessed and discharged to the extent of the amount of liability paid, subject to the result of the appeal. We are not concerned with other kinds of cases where there may be different reasons for deposit of security or any amount of any other nature. Mere filing of the appeal does not absolve the appellant nor suspends the liability assessed during pendency of the appeal. It continues unless paid or set aside. Any payment made during that period when liability subsists shall be in discharge of that liability as fixed. As provided under Section 27-B of the Act the Appellate Authority has only to be satisfied that a given part of the fee assessed and due has been paid to the Committee before it entertains the appeal. There is no direction as such for the appellant to make any payment under Section 27-B of the Act. It is for the Appellate Authority to be satisfied that a part of the liability is in deposit with the Committee.
14. Considering the facts of the present case in the light of what has been observed by us above, we find that orders of assessment had been made. The liability had been fixed and the amount was determined. The Appellate Authority was satisfied that one-third amount of the fee assessed and due was paid to the Committee before filing of appeals. The appeals were dismissed. The revisions preferred thereafter were also dismissed. All statutory remedies stood exhausted. Writ petitions filed under Article 226 of the Constitution were pending when the order of this Court was rendered in Belsund Sugar Co. case [(1999) 9 SCC 620: AIR 1999 SC 3125]. The writ petitions were disposed of in the light of the judgment of this Court without interfering with the orders of assessment and the appellate and revisional orders. In the case of Belsund Sugar Co. [(1999) 9 SCC 620: AIR 1999 SC 3125] specific directions have been issued in exercise of powers under Article 142 of the Constitution as to in what circumstances the amount paid is to be refunded and not to be refunded. We have already quoted earlier the relevant part of the judgment in Belsund Sugar Co. case [(1999) 9 SCC 620: AIR 1999 SC 3125] according to which the judgment was prospective in effect without affecting the past transactions and the orders, but the amount of the liability of the fee which had already been paid till the date of the order was not to be refunded but the balance which remained unpaid was also not to be recovered. In this case we have already held that the amount deposited before filing of appeals was a part of the liability assessed and found due and partly in discharge thereof. It was, therefore, not liable to be refunded and the High Court has rightly held so.
35. A similar provisions came up for consideration before Honble Supreme Court in the case of Axis Bank vs SBS Organics Private Limited and another: (2016) 12 SCC 18, wherein, the prescription is contained under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) for a pre-deposit under Section 18. While preferring an appeal against any of the measures initiated under Section 13(4) of the SARFAESI Act, the Court after considering the prescriptions contained in Section 18 with regard to pre-deposit held as under:
18. Any person aggrieved by the order of DRT under Section 17 of the SARFAESI Act, is entitled to prefer an appeal along with the prescribed fee within the permitted period of 30 days. For preferring an appeal, a fee is prescribed, whereas for the Tribunal to entertain the appeal, the aggrieved person has to make a deposit of 50% of the amount of debt due from him as claimed by the secured creditors or determined by DRT, whichever is less. This amount can, at the discretion of the Tribunal, in appropriate cases, for recorded reasons, be reduced to 25% of the debt.
19. This Court, in Lakshmiratan Engg. Works Ltd. v. CST [Lakshmiratan Engg. Works Ltd. v. CST, AIR 1968 SC 488] , had the occasion to consider the meaning of the expression entertain in the context of a similar provision in the Uttar Pradesh Sales Tax Act, 1948 wherein it was held that in such context, the expression has the meaning of admitting to consideration. The relevant discussion is available at paras 9 and 10: (AIR pp. 492-93)
9. The word entertain is explained by a Division Bench [Kundan Lal v. Jagan Nath Sharma, 1962 SCC OnLine All 38: AIR 1962 All 547] of the Allahabad High Court as denoting the point of time at which an application to set aside the sale is heard by the court. The expression entertain, it is stated, does not mean the same thing as the filing of the application or admission of the application by the court. A similar view was again taken in Dhoom Chand Jain v. Chaman Lal Gupta [Dhoom Chand Jain v. Chaman Lal Gupta, 1962 SCC OnLine All 29 : AIR 1962 All 543] in which the learned Chief Justice Desai and Mr Justice Dwivedi gave the same meaning to the expression entertain. It is observed by Dwivedi, J. that the word entertain in its application bears the meaning admitting to consideration, and therefore when the court cannot refuse to take an application which is backed by deposit or security, it cannot refuse judicially to consider it. In a Single Bench decision of the same court in Bawan Ram v. Kunj Behari Lal [Bawan Ram v. Kunj Behari Lal, 1960 SCC OnLine All 87: AIR 1962 All 42] one of us (Bhargava, J.) had to consider the same rule. There the deposit had not been made within the period of limitation and the question had arisen whether the court could entertain the application or not. It was decided that the application could not be entertained because proviso (b) debarred the court from entertaining an objection unless the requirement of depositing the amount or furnishing security was complied with within the time prescribed. In that case (sic meaning) of the word entertain is not interpreted but it is held that the court cannot proceed to consider the application in the absence of deposit made within the time allowed by law. This case turned on the fact that the deposit was made out of time. In yet another case of the Allahabad High Court in Haji Rahim Bux v. Firm Sanaullah & Sons [Haji Rahim Bux v. Firm Sanaullah & Sons, 1962 SCC OnLine All 156: AIR 1963 All 320], a Division Bench consisting of Chief Justice Desai and Mr Justice S.D. Singh interpreted the words of Order 21 Rule 90, by saying that the word entertain meant not receive or accept but proceed to consider on merits or adjudicate upon.
10. In our opinion these cases have taken a correct view of the word entertain which according to dictionary also means admit to consideration. It would therefore appear that the direction to the court in the proviso to Section 9 is that the court shall not proceed to admit to consideration an appeal which is not accompanied by satisfactory proof of the payment of the admitted tax. This will be when the case is taken up by the court for the first time. In the decision on which the Assistant Commissioner relied, the learned Chief Justice (Desai, C.J.) holds that the words accompanied by showed that something tangible had to accompany the memorandum of appeal. If the memorandum of appeal had to be accompanied by satisfactory proof, it had to be in the shape of something tangible, because no intangible thing can accompany a document like the memorandum of appeal. In our opinion, making an appeal the equivalent of the memorandum of appeal is not sound. Even under Order 41 of the Code of Civil Procedure, the expression appeal and memorandum of appeal are used to denote two distinct things. In Wharton's Law Lexicon, the word appeal is defined as the judicial examination of the decision by a higher court of the decision of an inferior court. The appeal is the judicial examination; the memorandum of appeal contains the grounds on which the judicial examination is invited. For purposes of limitation and for purposes of the rules of the Court it is required that a written memorandum of appeal shall be filed. When the proviso speaks of the entertainment of the appeal, it means that the appeal such as was filed will not be admitted to consideration unless there is satisfactory proof available of the making of the deposit of admitted tax.
20. We are also conscious of the fact that such a precondition is present in several statutes while providing for statutory appeals, like the Income Tax Act, 1961, the Central Excise Act, 1944, the Consumer Protection Act, 1986, the Motor Vehicles Act, 1988, etc. However, unlike those statutes, the purpose of the SARFAESI Act is different, it is meant only for speedy recovery of the dues, and the scheme under Section 13(4) of the Act, permits the secured creditor to proceed only against the secured assets. Of course, the secured creditor is free to proceed against the guarantors and the pledged assets, notwithstanding the steps under Section 13(4) and without first exhausting the recovery as against secured assets referred to in the notice under Section 13(2). But such guarantor, if aggrieved, is not entitled to approach DRT under Section 17. That right is restricted only to persons aggrieved by steps under Section 13(4) proceeding for recovery against the secured assets.
36. Thus, Honble Supreme Court while analyzing the interest of predeposit prescribed under Section 18 held that there was no quantification of dispute in the proceedings under Section 13(4) and thus, the pre-deposit prescribed under Section 18, cannot be adjudicated dues. This aspect was further clarified by Honble Supreme Court in the case of M/s Kut Energy Pvt. Ltd. and others vs Punjab National Bank and others:(2020) 19 SCC 533, wherein, the earlier judgment of the Honble Supreme Court in the case of Axis Bank (Supra) was analysed to the following effect:
11. In the present case, the deposit of Rs 40 crores in terms of the order of the High Court on 11-10-2017 [Kut Energy (P) Ltd. v. Punjab National Bank, 2017 SCC OnLine HP 2616] was only to show the bona fides of the appellants when a revised offer was made by them. The deposit was not towards satisfaction of the debt in question and that is precisely why the High Court had directed that the deposit would be treated to be a deposit in the Registry of the High Court.
12. Going by the law laid down by this Court in Axis Bank [Axis Bank v. SBS Organics (P) Ltd., (2016) 12 SCC 18 : (2016) 4 SCC (Civ) 681] the secured creditor would be entitled to proceed only against the secured assets mentioned in the notice under Section 13(2) of the SARFAESI Act. In that case, the deposit was made to maintain an appeal before the DRAT and it was specifically held that the amount representing such deposit was neither a secured asset nor a secured debt which could be proceeded against and that the appellant before DRAT was entitled to refund of the amount so deposited. The submission that the bank had general lien over such deposit in terms of Section 171 of the Contract Act, 1872 was rejected as the money was not with the bank but with the DRAT. In the instant case also, the money was expressly to be treated to be with the Registry of the High Court.
13. On the strength of the law laid down by this Court in Axis Bank [Axis Bank v. SBS Organics (P) Ltd., (2016) 12 SCC 18: (2016) 4 SCC (Civ) 681], in our view, the appellants are entitled to withdraw the sum deposited by them in terms of said order dated 11-10-2017 [State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85: (2018) 2 SCC (Civ) 41]. Their entitlement having been established, the claim of the appellants cannot be negated by any direction that the money may continue to be in deposit with the Bank.
37. Thus in view of the Judgments referred above and on the plain interpretation of Section 43(5) read with the context in which, the appeal is prescribed under the RERA Act, it is clear that the interest and/ or compensation, awarded can be challenged before the Tribunal after making the pre-deposit as required for the entertainment of the appeal. The said amount can be appropriated towards the adjudicated amount decided by the authority or the adjudicating authority as the case may be and there is no entitlement of refund unless the appeal is allowed and the order impugned is quashed by the Tribunal. The issue is answered accordingly.
38. It is however directed that the amount so deposited before the Regulatory Authority in terms of the directions given by the Appellate Authority shall be returned to the appellant, where the amounts are found to be in excess of the interest to be awarded to the allottees. It is further clarified that any amount found to be in excess of the interest payable to the allottee shall be refunded to the appellant on his moving appropriate application.
15. The substantial question law framed as Issue No.1 has already been answered as recorded above. The same is answered on same terms and conditions as recorded in the abovesaid quoted and underlined paras 37 & 38.
Question No.(ii)
(ii) Whether the allottee is entitled to interest if the project is delayed and whether in absence of any prescription as made in Rule 15 the Clause 9.2 of the Profarma agreement to sale which has been appended in the Uttar Pradesh Reat Estate (Regulation and Development) Rules, 2018 can be adhered to especially when they are only illustrative and indicative and not binding.
Answer:
16. Coming to the Question No.(ii), the said question was also answered in the case of Ratan Buildtech Private Limited vs Anil Kumar (Supra) with regard to the quantum of interest, in the following manner:
29. It is also essential to note that the Appellate tribunal has granted interest from 01.01.2020 {expected date of completion indicated in agreement as December 2019} to 13.10.2022 {date when offer for taking possession was sent} at the rate of MCLR + 1%. The said rate appears to be drawn from the directions given by the RERA on 19.06.2018 in exercise of powers under Section 37 of the RERA Act and the Regulation 9.2(ii) of The U.P Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018 as the Rule 15 of The UP Real Estate (Regulation and Development) Rules 2016 is silent as observed above being an ex facie error by the draftsman, the same cannot be faulted with as is reasonable.
Thus Question No.(ii) is answered by holding that interest is payable in terms of mandate of Section 18 and at the rate of MCLR + 1% in terms of the directions of the Appellate Tribunal under Section 37 of the RERA Act.
17. In respect of the other arguments raised with regard to there being no date of possession prescribed in the allotment letter, the said issue was considered extensively by this Court in U.P. State Industrial Development Authority vs Jaysi Ram Dohare (RERA Appeal No.90 of 2025), decided on 11.09.2025 and a similar ground with regard to the farmers agitation was also considered in respect of the same property and in the case of the same appellant to the following effect:
13. It is an admitted case that the property could not be developed in time on account of farmer agitation, and thereafter an option was given to the respondent either to continue with the property or to seek refund of the deposited money along with 6% interest. It is already recorded above that the respondent had opted for option no.1 in September 2019. Thereafter, when he was given an option to change the property from one part of the project to another part of the project, he gave an application for refund of the amount along with 10% interest. Section 18 of the RERA Act reads as under:
"18. Return of amount and compensation.-(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building-
(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:
Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.
(2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this sub-section shall not be barred by limitation provided under any law for the time being in force.
(3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act."
14. On a plain reading of Section 18 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as "RERA Act, 2016"), it is essential for grant of interest and compensation under the said section that there should be failure on the part of the promoter to complete and hand over possession of the apartment, plot or building within the time prescribed in the terms of the agreement for sale, and on demand of the allottee, in case the allottee wishes to withdraw from the project, to return the amount received from him along with interest at such rate as may be prescribed.
15. In the present case, clearly there was a failure on the part of the promoter to complete and offer possession of the plot within the time as indicated in the brochure, even if it was on account of farmers' agitation. It is also clear that subsequently a demand was made by the allottee for refund of the amount. Thus, on a plain reading of Section 18 of the RERA Act, 2016, the respondent was entitled to refund of the amount given by him along with interest.
16. The contention of the appellant is that the respondent had initially given an undertaking to continue with the project, which would have material bearing. He further argued that the completion certificate itself was granted some time in the year 2022 and, as such, the same would also have a material bearing, since the failure on the part of the promoter was on account of factors beyond their control and thus he cannot be directed to pay the interest in terms of the prescriptions contained under Section 18 of the RERA Act. The said arguments deserve to be rejected for the sole reason that for bringing Section 18 of the RERA Act, 2016 into play, the only essential features are; (i) the promoter failed to complete or give possession of the apartment in terms of the agreement for sale, and (ii) there was a demand by the allottee for refund of the amount.
17. In the present case, there is no agreement for sale between the parties. There exists only a brochure and an application filed by the respondent, and thereafter an allotment letter issued. The payment of part of the sale consideration is also on record. In terms of there being an offer in the form of the brochure, an acceptance in the form of the allotment application filed by the respondent, and there being part payment of consideration as well as quantification of the entire sale consideration, all the trappings of a contract were in existence. Thus, even if the agreement for sale, as prescribed in the Rules, 2018, is not in existence, all the trappings of a contract would amount to an agreement to sell between the parties.
18. That being the case, no error can be found in the order of the Appellate Tribunal in granting interest from the date of deposits made by the respondent till actual realization, at an interest rate of MCLR + 1%. The said mandate is also indicated in Section 2(za) of the RERA Act, which defines 'interest'. Section 2 (za) reads as under:
"2 (za)."Interest" means the rates of interest payable by the promoter or the allottee, as the case may be.
Explanation. - For the purpose of this clause
(i) the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default;
(ii) the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid."
19. The explanation to Section 2(za) of the RERA Act is very clear, in terms of which the date from which interest is payable is indicated in Explanation II, and there being no other prescription contained in the Act prescribing the date from which interest is to be paid, there is no reason to hold otherwise.
20. With regard to the rate of interest at MCLR + 1%, although the rules framed by the State of U.P., particularly Rule 15, are silent with regard to the prescribed rate of interest, a circular has been issued by the RERA Authority in exercise of powers under Section 37 of the RERA Act, 2016 being Government Order/ Circular No.1151/Shakti Parinidhyan/2018-19 dated 19.06.2018, prescribing the rate of interest at MCLR + 1%. There being no prescribed rate of interest, the prescription issued by virtue of powers conferred under Section 37 of the RERA Act, 2016 would hold the field. Thus, with regard to the quantum of interest also, no interference is required.
18. The abovesaid findings are squarely applicable to the arguments raised by the Counsel for the appellant and thus on all the reasoning recorded above, the present appeals are liable to be dismissed.
19. All the appeals stand dismissed accordingly.
October 07, 2025 [Pankaj Bhatia, J.]
akverma