Haryana REAT Rejects DLF Challenge To Refund Order, Holds Pre-Deposit Mandatory For Promoter Appeals

On 1 May, the Haryana Real Estate Appellate Tribunal (REAT) held that an appeal filed by promoters challenging a refund order under the Real Estate (Regulation and Development) Act, 2016 must necessarily be accompanied by the mandatory pre-deposit under Section 43(5).

The Bench comprising Justice Rajan Gupta and Technical Member Dinesh Singh Chauhan refused to entertain the appeal filed by DLF Limited against a refund order passed in favour of homebuyer Gautam Rana, holding that compliance with the statutory pre-deposit requirement is a threshold condition for maintainability. It held:

“An appeal, which is not accompanied with the pre-deposit, deserves outright dismissal. Challenge on the ground that the order is unsustainable, can only be considered if the appeal is found to be maintainable.”

DLF Limited and Gautam Rana had entered into a Builder Buyer Agreement for allotment of a residential unit. On 20 September 2023, DLF cancelled the allotment alleging breach of the agreed payment schedule by the allottee despite repeated reminders.

Gautam Rana thereafter approached the Haryana Real Estate Regulatory Authority, Gurugram. By order dated 1 August 2025, the Authority directed DLF to refund the amounts deposited by the homebuyer after deducting 10% of the sale consideration, along with interest at 10.90% from the date of termination/cancellation till actual refund. The Authority further granted 90 days for compliance.

DLF Limited challenged the said order before the Haryana Real Estate Appellate Tribunal under Section 43 of the Act, contending that the refund direction was unsustainable. Along with the appeal, it sought exemption from the mandatory pre-deposit requirement under Section 43(5), arguing that the allotment had already been cancelled due to non-compliance with the payment schedule.

On 2 April 2026, the Tribunal called for a report from the Registry to ascertain the pre-deposit amount. The Registry quantified the mandatory pre-deposit at Rs. 73,26,417. The Tribunal also noted that the Authority's order had remained operative during a delay period of 103 days, thereby sustaining the liability under challenge.

Rejecting the request for exemption, the Bench held that the Real Estate Act does not provide any scope for waiver of the statutory pre-deposit requirement for promoters. It further held that questions relating to delay or merits of the refund order could be considered only after the appeal satisfied the threshold requirement of maintainability under Section 43(5).

Relying on the Supreme Court's decision in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of UP, the Tribunal reiterated that promoters are required to deposit the entire amount payable to the allottee, including interest and compensation, before an appeal can be entertained.

Accordingly, the REAT dismissed the appeal and all accompanying applications without costs. However, it granted liberty to DLF Limited to seek revival of the appeal upon deposit of the requisite amount within one month from 1 May 2026.

Appearances for appellant (M/s DLF Limited): Advocate Vansh Vohra.