Allahabad High Court
Apex Dream Home Pvt. Ltd. Noida Thru. ... vs Jayant Prabhakar And Another on 8 August, 2025
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Neutral Citation No. - 2025:AHC-LKO:46304
HIGH COURT OF JUDICATURE AT ALLAHABAD
(LUCKNOW)
RERA APPEAL No.59 of 2023
Apex Dream Home Pvt. Ltd. ..... Appellant
Versus
Jayant Prabhakar & another .... Respondents
Counsel for Appellant(s):
Sri Harish Pandey, Sri Pritish Kumar & Sri Rajendra Kumar Dwivedi
Counsel for Respondent(s):
Sri Jayant Prabhakar (In Person)
HON'BLE PANKAJ BHATIA, J.
06.08.2025
1. Heard learned Counsel for the appellant and Sri Jayant Prabhakar who appeared in person.
2. The present appeal has been filed by the appellant against the judgment and order dated 29.05.2023 passed by the Real Estate Appellant Tribunal (in short "the Tribunal") in Appeal No.754 of 2021.
3. While entertaining the appeal, this Court, vide order dated 04.03.2024, had disclosed the amounts paid by the appellant to the respondent-Jayant Prabhakar in Court through demand drafts.
4. The appeal has not yet been admitted.
5. In view of the rival contentions, the only question of law that arises is:
(i) whether the directions given by the Tribunal for refund of the amount along with interest from the date of deposit till the refund of the amount is justified in view of the specific provisions contained in The Real Estate (Regulation and Development) Act, 2016 (In short "the RERA Act") being Section 18.
6. The appeal is admitted on the said issue.
7. With the consent of the parties, the present appeal is being decided finally.
8. Submission of the Counsel for the appellant is that while directing the refund of the amount deposited by the respondent i.e. Rs.62,42,000/-, directions have been issued for payment of interest from the date of deposit till the refund of the amount at the rate of MCLR + 1% per annum, which according to him is contrary to the provisions of the RERA Act. My attention has also been drawn to Section 18(1) of the RERA Act, which is quoted hereinbelow:
"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."
8. In the light of the said, it is argued that in terms of the provisions contained in the Act, the liability of payment of interest on the promoters is from the date when the allottee withdraws from the project till the payment or its realization whereas the Tribunal had erred in granting interest from the date of deposit till the actual payment/ realization.
9. The respondent, on the other hand, argues that the provisions of the RERA Act defines interest under Section 2 (za), which is quoted hereinbelow:
"(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;"
10. In the light of the said, he argues that the interest should be paid from the date of payment and not from the date when the respondent had withdraw from the project thus he prayed that the appeal deserves to be dismissed. My attention has also been drawn to Rule 9.2 of The Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018. In the light of the said, it is argued that the appeal deserves to be dismissed. The respondent places reliance on the judgment passed by the National Consumer Disputes Redressal Commission, New Delhi in the case of Shiv Kumar vs D.L.F. Universal Limited:MANU/CF/0224/2022 and in the case of Sunny Ahuja vs Raheja Developers Limited:MANU/CF/0009/2022. He also places reliance on the judgment rendered by the Hon'ble Supreme Court in the case of Kolkata West International City Pvt. Ltd vs Evasis Rudra passed in Civil Appeal No.3182 of 2019 arising out of SLP (C) No.1795 of 2017. The said judgments are of no avail, as the proceedings were initiated by the respondent under the RERA Act and all the claims were made in terms of the provisions contained the RERA Act whereas the judgments relating to the activities, which are prior to the enactment of the RERA Act, 2016.
11. Both the parties agree that the notice cancelling the agreement was served by the respondent on 03.10.2020 and thereafter, the respondent had approached the Regulator under the RERA Act for refund of the said amount.
12. It is also stated by the Counsel for the appellant that the amounts have been paid in tranches and the last amount was paid on 01.08.2023. It is further stated that on 04.03.2024, two demand drafts amounting to Rs.5,00,000/- and Rs.9,90,205/- were also paid to the respondents.
13. The RERA Act was enacted for regulation and promotion of the real estate sector and to ensure the sale of property in a efficient and transparent manner and to protect the interest of consumers in the real estate sector. The appellant is the promoter and the respondent is an allottee of a flat, which was made by the promoters. As the timeline for completion of the project was not adhered to by the appellant, the respondent served a legal notice on 03.10.2020, terminating the agreement and demanding the amount deposited by him. Subsequently, as the said amount was not paid, the respondent approached the Regulatory Authority. The Regulatory Authority allowed the application of the appellant. The matter ultimately travelled to the Tribunal and the Tribunal passed the impugned order directing the appellant to refund the amount of Rs.62,42,000/- to the complainant along with interest on the said amount from the date of deposit till the refund of the amount at the rate of MCLR + 1% per annum.
14. Considering the fact that there is no dispute that the agreement was terminated by the respondent by serving a legal notice on 03.10.2020, in terms of the mandate of Section 18(1) of the RERA Act, the appellant is bound to return the amount received by him in respect of that apartment with interest from the date of demand made by the allottee at the interest rate prescribed i.e. MCLR + 1%. There is no material on record to suggest that any termination of the agreement was done and demand was made by the allottee prior to 03.10.2020, which date is admitted by both the parties, as such, on plain interpretation of Section 18, the respondent is entitled for interest along with the refund of the amount from 03.10.2020 till the date of actual payment/ realization.
15. In view of above, the appeal is partly allowed. The judgment and order dated 29.05.2023 is modified to the extent that the appellant, herein, would be entitled to refund the amount of Rs.62,64,000/- along with interest from 03.10.2020 upto the actual payment/ realization to the respondent no.1. The amount already paid by the appellant would be deducted from the total amount to be paid and indicated hereinabove.
August 8, 2025 [Pankaj Bhatia, J.]
akverma
