Introduction:

In Yamuna Expressway Industrial Development Authority v. Raj Kumar Goyal (RERA Appeal No.124 of 2023), the Lucknow Bench of the Allahabad High Court examined a series of critical questions arising under the Real Estate (Regulation and Development) Act, 2016, particularly relating to the scope of the Appellate Tribunal’s powers, the requirement of mandatory pre-deposit under Section 43(5), and the legality of awarding interest at the rate of MCLR +1% for delayed possession. The dispute stemmed from a residential plot scheme launched in 2009 adjacent to the Agra-Noida Expressway, which became embroiled in land acquisition protests, government-imposed compensation obligations, and subsequent litigation. The allottees, facing long delays, approached RERA seeking possession and statutory interest, while the developer insisted that the delay was due to external circumstances and that allottees had been offered options, including a refund with 6% interest. After the Regulatory Authority allowed the complaints and the Tribunal modified the interest rate in favour of the allottees, the developer carried the matter to the High Court. Justice Pankaj Bhatia addressed key issues including whether the Tribunal could award interest without pre-deposit, whether deposits made under Section 43(5) could be appropriated, and whether the Tribunal possessed both appellate and revisional jurisdiction in such matters.

Arguments:

The appellant contended that the delays were unavoidable and arose from farmers’ agitation against the acquisition process, which triggered a 2014 government order requiring the recovery of 64.7% additional compensation from allottees to prevent protracted litigation. The appellant maintained that the project could not proceed until land issues were fully resolved, Occupation Certificates issued, and the revised compensation structure settled. It argued that the allottees were given an option to withdraw and receive their deposits back with 6% interest, which they declined. The appellant insisted that once special incentives had been offered, the allottees could not subsequently claim statutory interest for delay under the RERA Act. Additionally, the appellant argued that the Appellate Tribunal lacked authority to direct interest in the absence of a mandatory pre-deposit under Section 43(5), and that the amount deposited for filing the appeal could not be appropriated toward the liability. The appellant further contended that the Tribunal had exceeded its jurisdiction by passing orders akin to revisional scrutiny, asserting that the RERA framework contemplated an appellate jurisdiction only, not revisional powers.

The respondents (allottees), on the other hand, emphasized that the appellant had failed to deliver possession for several years despite having accepted full or substantial payments. They argued that RERA was enacted to ensure accountability, timely completion, and compensation for delays, regardless of the developer’s internal challenges. The allottees submitted that interest was their statutory right under Section 18 of the RERA Act, and that external disputes or acquisition issues could not be a defense for prolonged delay. They further relied on the Allahabad High Court’s earlier ruling in U.P. State Industrial Development Authority v. Jyasi Ram Dohare, which validated the Tribunal’s authority to calculate interest from the date of deposit. According to the respondents, the Tribunal was empowered under Sections 44 and 45 not only to hear appeals but also to examine the legality, propriety, and correctness of orders, thus exercising revisional-like powers when necessary. They also relied on Ratan Buildtech Pvt. Ltd. v. Anil Kumar, which held that deposits made under Section 43(5) could be appropriated toward the adjudicated amount unless the appeal was allowed in full. Hence, they argued that the Tribunal’s decision to calculate interest at MCLR +1% and to treat the deposit as liable for adjustment was fully justified and consistent with statutory mandate.

Judgment:

The High Court began by interpreting Section 43(5) of the RERA Act, which mandates that no appeal by a promoter shall be entertained unless the promoter first deposits the entire amount awarded by the Regulatory Authority or at least 30% of the penalty, whichever is higher. The Court held that this requirement is mandatory and acts as a condition precedent to the Tribunal assuming jurisdiction to consider an appeal. This, it observed, reflects the legislative objective of preventing frivolous appeals and ensuring that homebuyers are not deprived of relief due to prolonged litigation. Once pre-deposit is made, the Tribunal is fully empowered to modify, confirm, or set aside the Authority’s order, including awarding interest or compensation.

Relying on Ratan Buildtech, the Court clarified that the deposit made under Section 43(5) is not automatically refundable upon the disposal of the appeal. Instead, it can be appropriated toward the adjudicated liability determined by the Tribunal unless the appeal succeeds and the impugned order is quashed. This interpretation, according to the High Court, aligns with the object of RERA, which prioritizes the protection of homebuyers and discourages non-compliance by promoters. Thus, the appellant’s contention that the deposit could not be appropriated was rejected.

Addressing the issue of whether the Appellate Tribunal had exceeded its jurisdiction in awarding interest at MCLR +1%, the Court relied heavily on Jyasi Ram Dohare to conclude that the Tribunal was within its authority. Section 2(za) of RERA defines “interest” in a flexible manner, and the circular dated 19.06.2018 prescribing MCLR +1% supported the Tribunal’s determination. The Court emphasized that the Tribunal’s power extended to examining the “legality, propriety, and correctness” of the Authority’s orders—words that indicate a broader jurisdiction akin to revisional jurisdiction. The High Court observed that Section 44 confers a wide appellate power, enabling the Tribunal to re-evaluate conclusions and apply statutory standards consistent with the Act’s objectives. Similarly, Section 45 authorizes the Tribunal to exercise the same powers as the Authority, thereby giving it competence to modify interest rates and issue clarificatory directions where no new evidence was required. Thus, the Tribunal’s decision to award interest at MCLR +1% after the expiry of four years from the allotment letter or the deposit of 75% premium—whichever was later—was upheld as legally sound.

Furthermore, the Court observed that the appellant’s failure to deliver possession despite accepting substantial payments and offering inadequate alternatives justified the Tribunal’s intervention. The prolonged delay, despite repeated assurances, constituted a breach of the statutory obligation to provide timely possession. The Court underscored that RERA was enacted to reverse a historical imbalance where developers frequently delayed projects without adequate recompense to allottees. Therefore, strict enforcement of statutory interest, mandatory pre-deposit, and appellate oversight is essential to realize the Act’s objectives.

Ultimately, the High Court found no error in the impugned order of the Appellate Tribunal. It affirmed the Tribunal’s authority to award interest, to appropriate deposit amounts, and to exercise broad powers while examining the legality and propriety of decisions. The appeals were dismissed, and the Tribunal’s directions were upheld in full.