RERA Tribunal Has Appellate & Revision Powers; Interest Payable Only After Pre-Deposit U/S 43(5): Allahabad High Court

Recently, while entertaining a set of appeals regarding the Real Estate (Regulation and Development) Act, 2016, the Lucknow Bench of the Allahabad High Court held that under Section 43(5) of the RERA Act, the Appellate Tribunal could award interest or compensation only after mandatory pre-deposit is made for entertaining such appeal.Further, it held that the RERA Appellate Tribunal has both appellate and revisional powers for examining the legality and propriety and correctness of any order or direction of the Authority or the Adjudicating Officer. The Appellant had launched a residential plot scheme adjacent to the Agra-Noida Expressway in 2009. In the same year, a farmer's agitation took place against the proposed acquisitions. The result being that the concerned allotments were not subject to the land acquisition proceedings. On 20.11.2009, the allottee was granted a plot based on the aforementioned conditions. Subsequently, to address the above dispute, the Government issued an order dated 29.08.2014. By means of the said order, a proposition was made to recover compensation of 64.7% from the allottees to be paid above and beyond the land price, in order to dissuade the land-owners from litigation. However, litigation followed, leading to the work not being completed on time. Thus, the allottee filed a complaint before RERA seeking possession and payment of interest on delay.The appellant objected and stated that post development of the land, Occupation Certificates would be granted, additional compensation for the farmers would be considered and the plots would be subsequently allotted. The Developers also provided them with an option to withdraw from the project and receive their deposited amounts at an interest rate of 6%. The complaints were allowed by an order passed by the Regulatory Authority by order dated 21.12.2021. The appellants appealed the same before the UP real Estate Appellate Tribunal and deposited the requisite amount for the appeal. The appellants contended that once various incentives had been offered to the allottees, it was not open to them to claim statutory benefits for delay of interest under the RERA Act. However, The Tribunal passed an order in the favour of the allottees modifying the rate of interest to be paid to the allottees to the rate of MCLR +1% per annum. IT was held that this was to be paid after expiry of four years from the date of allotment letter. Alternatively, the appellant was to deposit 75% of the total premium of the allotted plot of the allottees, whichever was later, till the obtainment of the Occupation Certificate. In answering whether the Appellate Tribunal was justified in granting interest for the delay period at the rate of MCLR + 1% , the Court relied on U.P. State Industrial Development Authority v. Jyasi Ram Dohare where on a reading of Section 2(za), the Allahabad High Court held that the Tribunal was well within its rights in calculating interest from the date of the deposit. Further, it was held that the rate of interest fixed at MCLR + 1% was justified given Circular No. 1151/Shakti Paridnidhyan dated 19.06.2018.With regard to whether the Appellate Authority was justified in directing that the amounts depositor in pursuance to the mandatory prescriptions contained under Section 43(5) of the RERA Act, 2016 would be appropriated or had to be returned to the appellant after the decision of the appeal, Justice Pankaj Bhatia relied on the judgement in Ratan Buildtech Private Limited v. Anil Kumar. In the said case, the Allahabad High Court held that on a reading of Section 43(5) of the RERA Act, it would be clear that interest or awarded can be challenged by making the requisite deposit before the Tribunal. It was held that the amount can also be appropriated towards the adjudicated amount decided by the authority. “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,” held the Court in Ratan Buildtech. Regarding the issue of jurisdiction that was framed in another connected set of appeals, the Court once again relied on Ratan Buildtech to hold that as per Section 44 and 45 of the RERA Act, the Appellate Authority is entitled to exercise the powers of the authority against whom the appeal has been preferred. It was held that this would find greater merit in cases where no appreciation of evidence is required and only a mechanical exercise was to be performed. Finding no errors in the impugned order passed by the Tribunal, the Court allowed the appeals. Case Title: Yamuna Expressway Industrial Development Authority, Greater Noida, Gautambudh Nagar through its Authorized Representative v. Raj Kumar Goyal [RERA Appeal No.124 of 2023]Appearances: Prashant Chandra, Senior Advocate assisted by Prashant Kumar Singh and Anshuman Singh, Counsel...

RERA Tribunal Has Appellate & Revision Powers; Interest Payable Only After Pre-Deposit U/S 43(5): Allahabad High Court

Upasna Agrawal

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