Substantial Question Of Law Essential For Appeal Under RERA Act: Allahabad High Court

Section 58 of the Real Estate (Regulation and Development) Act, 2016 permits a person aggrieved by a decision or order of the Appellate Tribunal to appeal to the High Court within sixty days, but only on the grounds specified in Section 100 of the Code of Civil Procedure, 1908, which allows a second appeal where the case involves a substantial question of law.

Justice Syed Qamar Hasan Rizvi held

“It is thus manifest that, having regard to Section 100 of the Code of Civil Procedure read with Section 58 of the Act of 2016, an appeal is entertainable when it involves a 'substantial question of law'. The existence of a substantial question of law is, therefore, the sine qua non for invoking and exercising the jurisdiction of this Court under Section 58 of the Act of 2016.”

The allottee booked Flat No. 602 in the developer's registered group housing project 'Lav Kush Apartment' in 2014 and deposited Rs. 72,30,000/- against a sale consideration of Rs. 1,15,97,000/-. Alleging persistent default in clearing dues and in furnishing stamp papers for execution of the agreement, the developer cancelled the allotment by letter dated 26.10.2019.

On the allottee's complaint, the Regulatory Authority directed refund of the deposited amount within 45 days, which was paid. Aggrieved by the refusal of delay interest, the allottee appealed to the Tribunal, which framed the issue whether an allottee is entitled to interest on his deposit where the unit has been cancelled for default.

By order dated 14.08.2025, however, the Tribunal set aside the order of the Authority, restored the complaint to its original number and directed the Authority to decide the legality and validity of the cancellation letter in terms of Section 11(5) of the Act.

Before the High Court, the developer argued that the Tribunal had granted relief neither pleaded nor prayed for, and that having confined the controversy to the single issue of interest, it ought not to have set aside the entire order of the Authority.

It was contended that the cancellation had gone unchallenged for nearly six years, that limitation was attracted through Section 29(2) of the Limitation Act, 1963 read with Section 88 of the Act of 2016, and that the unit had since been transferred to another purchaser. The allottee objected to maintainability at the threshold, submitting that the impugned order was in substance a remand which determined nothing finally.

Examining Order XLI Rule 23 of the Code of Civil Procedure as amended for the Allahabad High Court in 1957, the Court held that the amendment carves out a second and independent ground of remand, namely that the appellate court considers remand necessary in the interest of justice, available even where the suit below was decided on merits and not on a preliminary point.

The Court found that the complaint itself had raised the cancellation, and that the allottee had questioned it before the Authority as unilateral and without sufficient cause. The proviso to Section 11(5), it observed, gives an aggrieved allottee the right to approach the Authority against a cancellation that is not in accordance with the agreement for sale, is unilateral, or is without sufficient cause. Deciding whether the cancellation was legal and valid was therefore necessary before the claim for interest under Section 18 could be determined, it held.

The Court also noted that the developer, by its reply dated 05.12.2019 issued after the cancellation, had called upon the allottee to deposit the balance consideration of Rs. 43,67,000/- with charges within thirty days and to have the sale deed executed in his favour — conduct which, it held, raised a live question about the effect of the cancellation letter. It declined to express any opinion on whether that amounted to waiver or revocation, leaving the question to the Authority.

“It would not be out of place to observe that a question of fact, however strenuously contested, does not metamorphose into a substantial question of law.”

“It is trite in law that an Appellate Court do not ordinarily interfere with an order of remand, particularly where such order does not finally determine the rights of the parties or cause any grave injustice or prejudice to either of them.”

Holding that none of the grounds urged qualified as a substantial question of law, the Court declined to adjudicate the other grounds raised in the appeal and left the parties free to raise all pleas available to them before the Regulatory Authority.

Accordingly, the appeal was dismissed.

For Appellant: Romit Seth

For Respondent: Abhishek Khare, Aahuti Agarwal