Allahabad High Court
Ratan Buildtech Pvt. Ltd. Thru. ... vs Anil Kumar on 4 September, 2025
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
AFR
Reserved: 04.08.2025
& 08.08.2025
Pronounced: 04.09.2025
HIGH COURT OF JUDICATURE AT ALLAHABAD
LUCKNOW
RERA APPEAL No. - 72 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Anil Kumar . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
CONNECTED WITH
RERA APPEAL DEFECTIVE No.18 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Devendra Singh Rawat . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
AND
RERA APPEAL DEFECTIVE No.19 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Rajesh Bajaj . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
AND
RERA APPEAL DEFECTIVE No.20 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Umesh Pal . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
AND
RERA APPEAL DEFECTIVE No.25 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Vijay Singh Jadon . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
Suryansh Narula, Anupama Bhadauria, Surabhi Rawat
AND
RERA APPEAL No. 41 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Sandeep Verma . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
AND
RERA APPEAL No. 42 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Narendra Singh Negi . Respondents
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
AND
RERA APPEAL No.43 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Dipanjan Mukhopadhyay and Ors . Respondents
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
Manish Singh, Azhar Ikram, Manish Singh
AND
RERA APPEAL No.44 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Shubhi . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
AND
RERA APPEAL No. 45 of 2025
(Old RERA Appeal Defective No.21 of 2025)
Ratan Buildtech Private Limited .. Appellant
Versus
Visnu Kumar Tiwari . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar, Twinkle Rajpal
Counsel for Respondent(s):
Anupama Bhadauria, Surabhi Rawat, Suryansh Narula
AND
RERA APPEAL No. - 70 of 2025
Radhika Bansal .. Appellant
Versus
Ratan Buildtech Private Limited . Respondent
Counsel for Petitioner(s):
Manish Singh, Azhar Ikram
Counsel for Respondent(s):
Sudeep Kumar, Mahima Pahwa
AND
RERA APPEAL No.73 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Swati Maheshwari . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh,Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.74 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Kaushik Kumar . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.75 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Alok Soni . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh,Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.76 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Radhika Bansal . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
Manish Singh, Azhar Ikram
AND
RERA APPEAL No.77 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Amar Singh Chauhan . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.78 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Shaktidhar Sahani . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh,Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.79 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Akhil Saxena . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh,Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.80 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Debangshu Sarkar & another . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh
Counsel for Respondent(s):
AND
RERA APPEAL No.81 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Nishant Dang . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.82 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Rashmita Nayak . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.83 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Satvinder Singh & another . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.84 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Ved Prakash Singh . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh, Sudeep Kumar
Counsel for Respondent(s):
AND
RERA APPEAL No.87 of 2025
Ratan Buildtech Private Limited .. Appellant
Versus
Raghavendra Singh . Respondent
Counsel for Petitioner(s):
Prashant Kumar Singh
Counsel for Respondent(s):
Awadhesh Kumar Misra, Piyush Tripathi
CORAM: HON'BLE PANKAJ BHATIA, J.
J U D G M E N T
1. Heard Sri Sudeep Kumar along with Mahima Pahwa and Sri Prashant Kumar Singh, learned Counsels appearing on behalf of the appellants and Sri Azhar Ikram along with Sri Manish Singh, learned Counsels appearing on behalf of the respondents-allottee. Sri Azhar Ikram also appears on behalf of the appellant-allottee in RERA Appeal No.70 of 2025.
2. The RERA Appeal Defective No.18; RERA Appeal Defective No.19 of 2025; RERA Appeal Defective No.20 of 2025 and RERA Appeal Defective No.25 of 2025 have been filed along with an application for condonation of delay. The cause shown are sufficient. The applications for condonation of delay are allowed. The delay in filing the appeals are condoned.
3. All the abovesaid appeals arise out of the same judgment passed by the U.P. Real Estate Appellate Tribunal, as such, are being decided by means of this common judgment.
4. For the brevity, the facts as emerge from the RERA Appeal No.72 of 2025 are that the respondent was allotted an apartment by the appellant at NOIDA under a builder buyer agreement on 22.01.2019. It is stated that on 16.09.2022, completion certificate was issued by the Greater Noida Industrial Development Authority in favour of the promoter. It is further stated that on 11.10.2022, the respondent filed a complaint for grant of interest and compensation under Form-N prescribed under The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the RERA Act) before the Adjudicating Officer, Uttar Pradesh Real Estate Regulatory Authority at Gautam Budhnagar. In the said complaint, the allegations of incorrect and false information; delay in possession and failure to discharge duties as per the Act, Rules and Regulations were made. In the said complaint, it is also stated that the possession was not provided as per the agreement and the allegation of mental harassment was also made and on these grounds, the respondent sought compensation of Rs.6,00,000/-. The said complaint/ application was resisted by the appellant by filing an objection and the objections were raised with regard to the jurisdiction to grant delay interest or compensation, which according to the appellant could be done only by the Regulatory Authority. After considering the complaint and objections filed, the compensation was awarded by the Adjudicating Authority vide order dated 10.02.2023. The said order of the Adjudicating Authority was challenged by the appellant in Appeal No.438 of 2023 before the Real Estate Appellant Tribunal (hereinafter referred to as the Tribunal) seeking quashing of the judgment dated 10.02.2023 on various grounds. It is stated that the requirement of pre-deposit under Section 43 of the RERA Act was also fulfilled at the time of filing of the appeal.
5. From the perusal of the appeal memo filed before the Tribunal, a copy whereof is on record as Annexure-5 to the RERA Appeal No.72 of 2025, what transpires is that while filing the appeal, one of the main grounds taken before the Tribunal was that the interest and compensation has been awarded by the Adjudicating Authority, whereas, the power to grant compensation for delay is vested only with the Regulatory Authority in terms of the judgment of the Honble Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd. vs State of U.P. (Civil Appeal No.6745-6749 of 2021). In paragraph 3 of the appeal filed before the Tribunal, it was stated that the grant of compensation was not justified as the same was without jurisdiction and was liable to be dismissed. In paragraph 6, it was specifically stated that the allottee had only the remedy to claim interest till the handing over of the compensation and no relief with regard to the compensation could be granted. In paragraph 8, it was specifically stated that the only remedy available to the allottee was to claim interest for the period of delay till such time the possession was offered, which authority is solely vested with Regulatory Authority and not the Adjudicating Officer. In paragraphs 13 and 14, the grant of compensation was said to be bad in law and in paragraph 23, it has been stated that in the builder buyer agreement, the expected date of offer was December, 2019 but the same was subjected to delay including COVID-19. In paragraph 29, it was specifically pleaded that the term mentioned in the builder buyer agreement was not essence of the contract and only a tentative time of completion of the project along with extension clause was provided indicating that the offer of possession was subject to incidents of force majeure which may adversely affect the delivery of possession and there was no provision for grant of any penal consequences. In paragraph 31, it was admitted that the offer of possession was sent for the first time on 13.10.2022. In paragraph 33, the jurisdiction of the Adjudicating Authority was once again challenged. In paragraph 35, a ground has been taken that in the official website of the RERA, the completion period of the project is mentioned as 30.12.2020 and further extension of one year was granted from 31.12.2019 to 30.12.2020 and the every promoters has the right and privilege to get the extension of one year as a matter of right. A claim with regard to waiver of interest for the COVID period was also pleaded. It was admitted that an application was also moved before the RERA Authority on 21.09.2021 for extension, however, no orders were passed thereupon. In short, the entire appeal was premised on the ground that no compensation or interest could have been awarded by the Adjudicating Authority.
6. The Tribunal after hearing the parties proceeded to decide the issues, vide order dated 14.05.2025, in between the parties including the question of jurisdiction as was raised by the appellant in exercise of powers vested in the Tribunal by virtue of Section 44(6) read with Section 53(1) of the RERA Act. Section 44(6) and Section 53(1) reads as under:
44. Application for settlement of disputes and appeals to Appellate Tribunal.
...
(6) The Appellate Tribunal may, for the purpose of examining the legality or propriety or correctness of any order or decision of the Authority or the adjudicating officer, on its own motion or otherwise, call for the records relevant to disposing of such appeal and make such orders as it thinks fit.
53. Powers of Tribunal.-(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice.
7. On the basis of the abovesaid powers, the Tribunal,on the basis of limited arguments raised as are reflected from order, decided the appeal vide order dated 14.05.2025 and set aside the order passed by the Adjudicating Authority however,it was decided that the respondent-allottee is entitled to delay interest only w.e.f. 01.01.2020 to 13.10.2022 at MCLR + 1% on the deposited amount except for the six months force majeure period on account of Covid-19. It was further directed that the amount so deposited as pre-deposit under Section 43(5) of the RERA Act shall be released in favour of the respondent after verifying whether any execution proceedings is pending or not and in case any execution is pending, the amount so deposited shall be remitted to the Regulatory Authority. Aggrieved by the order dated 14.05.2025, the present RERA appeal being No.70 of 2025 has been preferred by the appellant.
8. One of the respondents-allottee preferred RERA Appeal No.70 of 2025 attacking the order by arguing that the compensation could not have been refused apart from interest.
9. It is admitted in between the parties that in terms of the builder buyer agreement executed in between the appellant and the respondent on 22.01.2019, the date of delivery of possession was indicated as December, 2019. It is also admitted that the completion certificate was received on 16.09.2022 and the letter for the allotment was issued by the appellant on 13.10.2022.
10. It is argued by the Counsel for the appellant that after issuance of the completion certificate by the competent authority, the appellant issued offer of possession to the allottee on 13.10.2022 but the respondent did not come forward for execution of the lease deed. Subsequently, the lease deed was executed on 15.02.2024 in between the promoter and the allottee. It is also argued that the manner in which the interest has been awarded by the Tribunal is bad in law and further the pre-deposit for preferring the appeal could not have been directed to be released in favour of the respondent.
11. The Counsel for the appellant on the basis of the written agreement also argues that it is well settled that the Adjudicating Officer has no jurisdiction to grant interest as has been held by the Honble Supreme Court in the case of Newtech Promoters and Developers (P) Ltd. vs State of U.P.:(2021) 18 SCC 1. Interest, according to the appellant can be granted only by the Regulatory Authority and not by the Adjudicating Authority. The Counsel for the appellant further argues that the order, which records that the appellant has admitted about the delay in delivery of the possession of the apartment, is erroneous, inasmuch as, the admission on the part of the appellant was only to the effect that the apartment could not be delivered to the allottee and not any admission that they are liable to pay interest and compensation. It is further argued that it was incumbent upon the Tribunal to have conducted an inquiry before directing for payment of interest as has been done by means of the impugned judgment. It is further argued that no reasons have been recorded while granting the interest and the Tribunal has erred in directing the refund of money, which was deposited as pre-deposit under Section 43, which is primarily for the purpose of satisfying the statutory requirement of maintaining an appeal and cannot be appropriated after the decision is made. Reliance is also placed upon the provisions of Section 44(6) of the RERA Act to argue that even if the Tribunal had the power, it was incumbent upon the Tribunal to hold full-fledged inquiry before granting interest which has not been done.
12. The Counsel for the appellant further argues that although the Tribunal is vested with the power to pass such order as thinks fit, however, the grant of interest is subject to fulfilling the procedure and after framing legal issues and after analyzing the evidence. It is further argued that although the provisions of Code of Civil Procedure, 1908 would not apply, however, once the Tribunal is of the view that the Adjudicating Officer had no jurisdiction, it was incumbent to frame issues itself and then decide the same. In support of the contention, the Counsel for the appellant argues that the Honble Supreme Court while analyzing the phrase to pass orders as it thinks fit in the case of Commissioner of Income Tax, Bombay vs Walchand & Co. (P) Ltd.:1967 SCC OnLine SC 119 held as under:
It is necessary to emphasize that though the Tribunal is not a court, it is invested with judicial power to be exercised in manner similar to the exercise of power of an appellate court acting under the Code of Civil Procedure. Authority to pass such orders thereon as it thinks fit in Section 33(4) of the Income Tax Act, 1922, is not arbitrary : the expression is intended to define the jurisdiction of the Tribunal to deal with and determine questions which arise out of the subject-matter of the appeal in the light of the evidence, and consistently with the justice of the case. In the hierarchy of authorities the Appellate Tribunal is the final fact-finding body; its decisions on questions of fact are not liable to be questioned before the High Court. The nature of the jurisdiction predicates that the Tribunal will approach and decide the case in a judicial spirit and for that purpose it must indicate the disputed questions before it with evidence pro and con and record its reasons in support of the decision. The practice of recording a decision without reasons in support cannot but be severely deprecated.
13. Similarly in the case of Commissioner of Income Tax, Madras vs S. Chenniappa Mudaliar, Madurai: (1969) 1 SCC 591 held as under:
The powers, functions and duties of the Appellate Tribunal are set out in Sections 28, 33, 35, 37, 48 and 66. For our purpose reference may be made only to Sections 33 and 66. Sub-sections (1) and (2) of Section 33 give a right to the assessee and the Commissioner to appeal to the Appellate Tribunal against the order passed by the Appellate Assistant Commissioner within sixty days of the communication of his order. Under sub-section (2-A) the Tribunal can admit an appeal after the expiry of sixty days if it is satisfied that there was sufficient cause for not presenting it within that period. Sub-section (3) lays down the formalities in the matter of the filing of an appeal. Sub-section (4) is to the effect that the Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit and shall communicate any such orders to the assessee and to the Commissioner. Sub-section (5) deals with the changes to be made in the assessment as a result of the orders of the Appellate Tribunal. Sub-section (6) makes the orders of the Tribunal on appeal final, the only saving being with reference to the provisions of Section 66. Under that section the assessee or the Commissioner can require the Appellate Tribunal to refer to the High Court any question of law arising out of the order of the Appellate Tribunal and if the Tribunal refuses to state the case on the ground that no question of law arises the assessee or the Commissioner can, within the prescribed period, apply to the High Court and the High Court can direct the Appellate Tribunal to state the case and make a reference. It is unnecessary to refer to all the provisions of Section 66 except to notice the power of the High Court to decide the question of law which decision has to be implemented by the Appellate Tribunal.
7. The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of Section 33(4) and in particular the use of the word thereon that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear. As observed in Hukumchand Mills Ltd. v. CIT, [(1967) 63 ITR 232 : 1966 SCC OnLine SC 171] the word thereon in Section 33(4) restricts the jurisdiction of the Tribunal to the subject-matter of the appeal and the words pass such orders as the Tribunal thinks fit include all the powers (except possibly the power of enhancement) which are conferred upon the Appellate Assistant Commissioner by Section 31 of the Act. The provisions contained in Section 66 about making a reference on questions of law to the High Court will be rendered nugatory if any such power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default without making any order thereon in accordance with Section 33(4). ...
14. It is further argued that as far as the grant of interest is concerned, Section 18 of RERA Act read with Rule 33 of The Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 (hereinafter referred to as RERA Rules) are relevant. The said Section and Rule are quoted in subsequent paragraph.
15. The Counsel for the appellant further argues that the phrase as the case may be used in Section 18 (1)(a) should be interpreted to hold that grant of interest is not a mechanical exercise rather it is dependent on various factors as prescribed under Section 72, which mandates for inquiry to be conducted by the Regulatory Authority and in absence of such exercise, the impugned order passed by the Tribunal granting interest for delayed period is wholly impermissible. The phrase as the case may be come up for consideration before Honble Supreme Court in the case of Subramaniam Shanmugham vs M.L. Rajendran: (1987) 4 SCC 215. In para 3 of the said judgment, Honble Supreme Court held as under:
3. Justice Morris in Bluston & Bramley Ltd. v. Leigh [(1950) 2 All ER 29, 35] explained that the phrase as the case may be meant in the events that have happened. Our attention was also drawn to the expression as the case may be as appearing in the Words and Phrases, Permanent Edn. 4 page 596. The meaning of the expression as the case may be is what the expression says, i.e., as the situation may be, in other words in case there are separate and distinct units then concept of need will apply accordingly. Where, however, there is no such separate and distinct unit, it has no significance. There is no magic in that expression. The expression as the case may be has been properly construed in the judgment mentioned hereinbefore.
16. The Counsel for the appellant argues that the phrase as the case may be in the present case ought to have been considered keeping in view the obligations of the promoters restricting the transfer without issuance of completion certificate which cannot be attributed to the appellant. Reliance is also placed upon the judgment in the case of Mahindra & Mahindra Financial Services Limited vs State of U.P.: 2019 SCC OnLine All 5336.
17. It is further argued by the Counsel for the appellant that for preferring an appeal, there is a prescription for deposit of the amount so that the appeal can be entertained. He argues that for interpreting the word entertained, the same has to be read as admitting to consideration and is not in a nature of the security and thus could not have been released in favour of the allottee as has been done by the impugned order.
18. The Counsel for the respondent, on the other hand, argues that the appeal has been filed against an order of compromise ,wherein, the facts were admitted as recorded by the Tribunal and the grant of interest according to him is a mechanical exercise in view of the prescriptions contained in Section 18(1)(a) which does not require any further exercise and thus argument of the Promoter to that effect deserves to be rejected. He places reliance upon the judgment of this Court dated 18.11.2023 passed in RERA Appeal No.67 of 2023 (U.P. Avas Evam Vikas Parishad, Lucknow vs Dhruv Kumar Chaturvedi) as well as on the judgment dated 08.10.2020 passed in Writ-C No.13904 of 2020 (Vibhor Vaibhav Infrahomes Pvt. Ltd. vs Union of India & Ors.
19. This Court, vide order dated 28.04.2025, had admitted RERA Appeal(s) No.41, 42, 43, 44 of 2025 and the RERA Appeal Defective No.21 of 2025, now renumbered as RERA Appeal No.45 of 2025, on the following questions of law:
(i). Whether the Appellate Tribunal was justified in granting delayed interest for a period which is mentioned in its impugned order dated 17.2.2025 para 18(ii) without making any determination and without recording any reasons in respect thereof?
(ii). Whether the Appellate Tribunal was justified in making a direction as contained in para 18 (iii) of the impugned order without considering the fact that the deposit made in terms of Section 43 (5) of the Act of 2016 is primarily for the purposes of satisfying the statutory requirement of maintaining the appeal and in such circumstances, whether the pre deposit so made can be appropriated after the decision is made in favour of the respondent for whom there are separate provisions for execution in the Act and in this light whether the execution can be by passed by taking recourse to issuing such a direction?
20. In the light of the arguments raised by the respective parties, while admitting the other appeals, two additional issues were framed, which are as under:
(iii). Whether, an appeal would lie against the grant of interest under Section 18(1) of the RERA Act, granted on the basis of admission in between the parties?
(iv). Whether, grant of interest requires any adjudication or can be granted automatically as per Section 18(1) of the RERA Act?
21. In the light of the submissions as recorded above and the points determined, it is essential to note the scheme of the RERA Act. The Act in question was enacted for regulation and promotion of the real estate sector and for providing a mechanism for dispute redressal. Chapter III of the said RERA Act prescribes for functions and duties of promoter; Chapter IV provides for rights and duties of allottees; Chapter V prescribes for establishment of a Regulatory Authority and functions thereof and Chapter VI prescribes for establishing an Appellate Tribunal and the powers of the said Appellate Tribunal. In terms of the powers conferred by the said RERA Act, the Rule 2016 known as The Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 has been enacted, which prescribes the manner, in which, the rate of interest is payable by the promoters as prescribed under Chapter V. The manner of exercise of the Regulatory Authority is prescribed in Chapter VI and the manner, in which, the Appellate Tribunal decides the appeals is prescribed under Chapter VII. Thus from the object of the Act it is clear that it is a socio beneficial legislation ,one of the objects being to protect the home buyers who do not possess the bargaining powers while entering into contracts with promoters which are generally one sided.
22. Before adverting to decide the points, it is essential to note Sections 2(za), 18, 19, 40, 43 of the RERA Act, which reads as below:
2 (za). (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;
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.
19. Rights and duties of allottees.-(1) The allottee shall be entitled to obtain the information relating to sanctioned plans, layout plans along with the specifications, approved by the competent authority and such other information as provided in this Act or the rules and regulations made thereunder or the agreement for sale signed with the promoter.
(2) The allottee shall be entitled to know stage-wise time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities and services as agreed to between the promoter and the allottee in accordance with the terms and conditions of the agreement for sale.
(3) The allottee shall be entitled to claim the possession of apartment, plot or building, as the case may be, and the association of allottees shall be entitled to claim the possession of the common areas, as per the declaration given by the promoter under sub-clause (C) of clause (1) of sub-section (2) of Section 4.
(4) The allottee shall be entitled to claim the refund of amount paid along with interest at such rate as may be prescribed and compensation in the manner as provided under this Act, from the promoter, if the promoter fails to comply or is unable to give possession of the apartment, plot or building, as the case may be, in accordance with the terms of agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of his registration under the provisions of this Act or the rules or regulations made thereunder.
(5) The allottee shall be entitled to have the necessary documents and plans, including that of common areas, after handing over the physical possession of the apartment or plot or building as the case may be, by the promoter.
(6) Every allottee, who has entered into an agreement for sale to take an apartment, plot or building as the case may be, under Section 13, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any.
(7) The allottee shall be liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any amount or charges to be paid under sub-section (6).
(8) The obligations of the allottee under sub-section (6) and the liability towards interest under sub-section (7) may be reduced when mutually agreed to between the promoter and such allottee.
(9) Every allottee of the apartment, plot or building as the case may be, shall participate towards the formation of an association or society or cooperative society of the allottees, or a federation of the same.
(10) Every allottee shall take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or building, as the case may be.
(11) Every allottee shall participate towards registration of the conveyance deed of the apartment, plot or building, as the case may be, as provided under sub-section (1) of Section 17 of this Act.
40. Recovery of interest or penalty or compensation and enforcement of order. etc. (1) If a promoter or an allottee or a real estate agent, as the case may be, fails to pay any interest or penalty or compensation imposed on him, by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder, it shall be recoverable from such promoter or allottee or real estate agent, in such manner as may be prescribed as an arrears of land revenue.
(2) If any adjudicating officer or the Regulatory Authority or the Appellate Tribunal, as the case may be, issues any order or directs any person to do any act, or refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder, then in case of failure by any person to comply with order or direction, the same shall be enforced, in such manner as may be prescribed.
43. Establishment of Real Estate Appellate Tribunal.-(1) The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Appellate Tribunal to be known as the (name of the State/Union territory) Real Estate Appellate Tribunal.
(2) The appropriate Government may, if it deems necessary, establish one or more benches of the Appellate Tribunal, for various jurisdictions, in the State or Union territory, as the case may be.
(3) Every bench of the Appellate Tribunal shall consist of at least one Judicial Member and one Administrative or Technical Member.
(4) The appropriate Government of two or more states or Union territories may, if it deems fit, establish one single Appellate Tribunal:
Provided that, until the establishment of an Appellate Tribunal under this section, the appropriate Government shall designate, by order, any Appellate Tribunal Functioning under any law for the time being in force, to be the Appellate Tribunal to hear appeals under the Act:
Provided further that after the Appellate Tribunal under this section is established, all matters pending with the Appellate Tribunal designated to hear appeals, shall stand transferred to the Appellate Tribunal so established and shall be heard from the stage such appeal is transferred.
(5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:
Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal at least thirty per cent. of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard.
Explanation. For the purpose of this sub-section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.
23. Similarly, it is essential to reproduce Rules 15, 16 and 33 of the Rules 2016 to decide the issues, which are as under:
15. Rate of interest payable by the promoter and the allottee. - The Authority shall maintain a back-up, in digital form, of the contents of its website in terms of this rule, and ensure that such back-up is updated on the last day of each month.
16. Timelines for refund. - Any refund of moneys along with the applicable interest and compensation, if any, payable by the promoter in terms of the Act or the rules and regulations made thereunder, shall be payable by the promoter to the allottee within forty-five days from the date on which such refund along with applicable interest and compensation, if any, becomes due.
33. Manner of filing a complaint with the regulatory authority and the manner of holding an inquiry by the regulatory authority.-(1) Any aggrieved person may file a complaint with the regulatory authority for any violation under the Act or the rules and regulations made thereunder, save as those provided to be adjudicated by the adjudicating officer, in Form M which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank in favour of regulatory authority and payable at the main branch of that bank at the station where the seat of the said regulatory authority is situated.
Explanation. For the purpose of this sub-rule "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.
(2) The regulatory authority shall for the purposes of deciding any complaint as specified under sub-rule (1), follow summary procedure for inquiry in the following manner:
(a) Upon receipt of the complaint the regulatory authority shall issue a notice along with particulars of the alleged contravention and the relevant documents to the respondent;
(b) The notice shall specify a date and time for further hearing;
(c) On the date so fixed, the regulatory authority shall explain to the respondent about the contravention alleged to have been committed in relation to any of the provisions of the Act or the rules and regulations made thereunder and if the respondent:
(i) pleads guilty, the regulatory authority shall record the plea, and pass such orders including imposition of penalty as it thinks fit in accordance with the provisions of the Act or the rules and regulations, made thereunder;
(ii) does not plead guilty and contests the complaint the regulatory authority shall demand an explanation from the respondent;
(d) In case the regulatory authority is satisfied on the basis of the submissions made that the complaint does not require any further inquiry it may dismiss the complaint;
(e) In case the regulatory authority is satisfied on the basis of the submissions made that the there is need for further hearing into the complaint it may order production of documents or other evidence on a date and time fixed by it;
(f) The regulatory authority shall have the power to carry out an inquiry into the complaint on the basis of documents and submissions;
(g) On the date so fixed, the regulatory authority upon consideration of the evidence produced before it and other records and submissions is satisfied that:
(i) the respondent is in contravention of the provisions of the Act or the rules and regulations made thereunder it shall pass such orders including imposition of penalty as it thinks fit in accordance with the provisions of the Act or the rules and regulations made thereunder;
(ii) the respondent is not in contravention of the provisions of the Act or the rules and regulations made thereunder the regulatory authority may, by order in writing, dismiss the complaint, with reasons to be recorded in writing.
(h) If any person fails, neglects or refuses to appear, or present himself as required before the regulatory authority, the regulatory authority shall have the power to proceed with the inquiry in the absence of such person or persons after recording the reasons for doing so.
24. On the basis of the statutory prescriptions of the RERA Act and the Rules framed therein and quoted hereinabove, it is essential to note the error committed by the Draftsmen in Rule 15 of the RERA Rules, which appears to be as a result of slipshod and a careless mistake of the Draftsmen. Let a copy of this order be sent to Secretary, Law, Government of U.P. for taking steps for rectification of the error in drafting Rule 15.
Questions No.(i) & (iv):
(i). Whether the Appellate Tribunal was justified in granting delayed interest for a period which is mentioned in its impugned order dated 17.2.2025, para 18(ii), without making any determination and without recording any reasons in respect thereof.
&
(iv). Whether, grant of interest requires any adjudication or can be granted automatically as per Section 18(1) of the RERA Act?
Answers:
25. Since both the questions are correlated to each other, as such, the same are being decided together.
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.
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.
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.
30. In the present case, admittedly, there was no dispute with regard to the date prescribed in the agreement to sale for completion of the project that was 31.12.2019 and even as per the admission, as recorded in paragraph 13 of the impugned judgment, the offer of possession was made on 05.11.2022, which fact was also admitted by the learned Counsel for the appellant during the course of the hearing before the Tribunal, thus, the normal consequence of the agreement on the three dates would result in automatic award of interest in terms of the mandate of Section 18(1)(a) and was rightly awarded by the Tribunal, thus, the Question No.(iv) is decided against the appellant.
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.
32. In view thereof, the questions are decided against the appellant by holding that the Tribunal has rightly exercised its power in granting delayed interest.
Question No.(ii):
Whether the Appellate Tribunal was justified in making a direction as contained in para 18 (iii) of the impugned order without considering the fact that the deposit made in terms of Section 43 (5) of the Act of 2016 is primarily for the purposes of satisfying the statutory requirement of maintaining the appeal and in such circumstances, whether the pre deposit so made can be appropriated after the decision is made in favour of the respondent for whom there are separate provisions for execution in the Act and in this light whether the execution can be bye passed by taking recourse to issuing such a direction?.
Answer:
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 pre-deposit 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 theSarfaesiAct, 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, inLakshmiratan 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 pre-deposit 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 inAxis Bank[Axis Bankv.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 theSarfaesiAct. 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 inAxis Bank[Axis Bankv.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 Travancorev.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.
Question No.(iii)
(iii). Whether, an appeal would lie against the grant of interest under Section 18(1) of the RERA Act, granted on the basis of admission in between the parties?
Answer:
39. Coming to Question No.(iii), from the mandate of Section 58, which prescribes for remedy of appeal before the High Court, it is essential to note that appeal can be filed on any one or more of the grounds specified under Section 100 of C.P.C. It is also essential to note Section 58 of the RERA Act, which reads as below:
(1) Any person aggrieved by any decision or order of the Appellate Tribunal, may, file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908 (5 of 1908):
Provided that the High Court may entertain the appeal after the expiry of the said period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.
Explanation.The expression "High Court" means the High Court of a State or Union territory where the real estate project is situated.
(2) No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties.
40. It is also essential to notice the provision of Section 100 of C.P.C., which reads as under:
100. Second appeal.--(1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law.
(2) An appeal may lie under this section from an appellate decree passed ex parte.
(3) In an appeal under this section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal.
(4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question.
(5) The appeal shall be heard on the question so formulated and the respondent shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:
Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law, not formulated by it, if it is satisfied that the case involves such question.
41. Thus, on plain reading of Section 58 of the RERA Act and Section 100 of C.P.C., it is clear that an appeal would lie only against a decree passed in appeal in any court when only substantial questions of law are involved.
42. From the submissions as recorded in the appellate order, against which, the present RERA Appeals have been filed, it is clearly recorded that there was no dispute with regard to the date of delivering of possession and the offer of possession and the only ground taken with regard to the grant of interest is contained in paragraph 8 to the effect that where the allottee has taken possession without protest and thus he is not liable to any interest for the delay in terms of Section 18(1) of the Act, there being no other submission made before the Tribunal, it is not open for the appellant to canvas new issue as was tried to be done. On both the said admission with regard to non-entitlement of interest under Section 18(1) merely because the allottee has taken the possession without protest and there being no dispute with regard to the date of possession of the project and the date of offer of possession, no appeal could be preferred before this Court in excess of what was argued before the Tribunal and thus, to that extent, the appeal would not even lie on any issue beyond what was argued before the Tribunal. Even if the submission of the Counsel for the appellant that the appellate court was wrong in recording that there was admission with regard to delay in delivery of possession and the admission was confined only to that effect that apartment could not be delivered to the allottee and there was no admission to liability to pay interest,would not alter the final out come as it is already held that the statutory interest is essentially a mathematical exercise and does not require any adjudicatory exercise.. Thus, Question No.(iii) is also answered accordingly.
43. In view of all the reasons recorded above, all the appeals filed by Promoter deserve to be dismissed and are accordingly dismissed. The Appeal preferred by the Allottee also deserves to be dismissed as no arguments were advanced for payment of compensation before the Tribunal and thus will not give rise to any substantial question of Law arising from the impugned judgment.
44. Senior Registrar of this Court is directed to send a copy of this order to the Secretary, Law, Government of U.P. for information and compliance.
August 04, 2025 [Pankaj Bhatia, J.]
akverma